This blog is co-authored by Eric Geldenhuys, candidate attorney.

Corporate fraud and corruption continue to plague businesses in South Africa, leading to significant annual revenue losses and other detrimental impacts. As the landscape of corporate crime evolves, so too do the methods for uncovering it. Increasingly, companies are turning to private investigators to assist with internal investigations into fraud, corruption, and employee misconduct. But what are the legal boundaries for using private investigators in this context?

In this blog, we discuss the requirement for private investigators to be registered with the appropriate regulatory body, and to utilise lawful methods to provide their services.

Regulatory regime – PSIRA

The Private Security Industry Regulation Act, 2001 (PSIRA) regulates the private security industry in South Africa, ensuring professionalism, accountability, and compliance with the law to protect the public and national interest.
A private investigator is defined in PSIRA as a person who, for remuneration, “in a private capacity and for the benefit of another person, investigates the identity, actions, character, background or property of another person, without the consent of such a person…”. This classification requires their registration with the Private Security Industry Regulatory Authority as a security service provider, the requirement extending to both individuals and the employing entities. Importantly, the definition excludes auditors, accountants, attorneys, advocates, and forensic scientists acting within their professional scope, as well as internal investigators conducting reasonable investigations into employee misconduct or safeguarding business interests.

The use of an unregistered private investigator constitutes an offence and will expose the contracting company to legal risks. Companies engaging private investigators must therefore verify that the private investigator (the individual and if they are so employed by a firm, that entity, too) are appropriately registered.

Regulatory regime – The Code of Conduct

Private investigators are bound by the obligations contained in the Code of Conduct for security service providers (as prescribed by PSIRA). Their obligations are twofold: (1) general obligations applicable to all security service providers, and (2) specific obligations tailored to private investigators.

As a security service provider, a private investigator must, as an overarching responsibility, act lawfully and respect the rights enshrined in the Bill of Rights. Specific obligations on private investigators include that they may not:
advise, assist or incite a client to commit unlawful acts;

  • use corrupt, illegal, or unlawful methods, threats, or misrepresentation to gather information;
  • possess or use a monitoring device or any other equipment for the purposes of surveillance, counter-surveillance or any other aspect of an investigation where such possession or use is in conflict with any legal provision or any provision of the code or constitutes an unlawful act against any person;
  • possess, carry or use any document to provide a false or incorrect indication of their identity, unless they are able to show that it is essential to conduct a lawful, mandated investigation and is otherwise not in conflict with any legal provision;
  • promise or give any consideration to a person to obtain information where that person would contravene the law; and
  • undertake investigations except with a proper written mandate from the client, detailing the scope and terms of the investigation.

A useful tool – if utilised correctly

For companies, the onus is clear: before engaging a private investigator, ensure they are properly registered with PSIRA and check that their methods comply with the law and the Code of Conduct.  Any information obtained must be gathered lawfully, and the investigator’s conduct must uphold the ethical standards.

Private investigators can be invaluable allies in rooting out corporate wrongdoing, but their use is tightly regulated.  Companies must tread carefully, ensuring full compliance with PSIRA and the Code of Conduct.  In the fight against corporate crime, the right investigator – operating within the law – can make all the difference.