South Africa anti-corruption charter ‘first step’ towards meaningful change

Such a charter could, in the words of the Zondo Commission, be a “symbolic and substantive” gesture, marking “the turning of the page” and ushering in a new era for South African civil society.

No single issue has dominated the national discourse in South Africa over the past 10 years as much as corruption. The presidency of Jacob Zuma from 2009 to 2018 brought with it scandal after scandal and the public all but lost faith that things would change. The Zondo Commission has spent four years trying to understand what went wrong and how Zuma and others captured the state.

Adopting a national charter against corruption, as recommended by the Commission, will not fundamentally change the law in South Africa. Corruption is illegal and the means already exist to hold wrongdoers accountable. However, the symbolic impact of such a charter could be immeasurable provided that the nature and purpose of the commitment is properly understood and there is meaningful belief in what it symbolises.

What has Zondo recommended?

Justice Raymond Zondo has recognised the negative impact of state capture on the trust that the public places in government, political parties and the business sector. He believes that the first step in restoring the broken trust is for “all sections of society” to agree and explicitly support the elimination of corruption in the public sector, particularly in relation to public sector procurement.

Exactly what would be stated in the national charter against corruption envisaged by Zondo is not clear from the recommendations. He does, however, recommend that it should contain a ‘code of conduct’ which sets out the ethical standards that are expected of persons involved in public sector procurement, and recommends that the charter is developed by the government in consultation with the business sector.

Zondo has recommended a layered approach to how the charter would apply in practice. At the first level, key persons – including institutions, individuals and legal persons – should sign the charter to symbolise their commitment to upholding its principles. The persons listed include, amongst others, the president, cabinet members, state-owned entities, political parties and listed companies. For these groups, the implication is that the signing would be a social contract and symbolic stand against corruption, as opposed to being of direct legal effect.

Similarly, all procurement officers in the public sector should sign a commitment to observe and uphold the national charter when they are appointed. This seems to be different to the general symbolic commitment referred to above, and the apparent intention is for compliance with the charter to form part of the employment conditions for these officers. Failure to comply could have employment consequences for the individuals concerned, including being disciplined and possibly fired.

Thirdly, Zondo has recommended that all persons – both individuals and legal persons – that tender for public sector contracts should be required to sign a commitment to observe and uphold the national charter when bidding for such work. On the face of it the intention is to legally bind bidders to the principles of the charter. If this is the case, a failure to uphold the principles in a tender process could have direct legal consequences such as disqualification from a tender, the termination of a contract (if discovered after the award) and possible blacklisting from future public sector procurement.

Finally, Zondo has doubled down and recommended that the charter, and the code of conduct included in the charter, should be given legal status through an Act of parliament. Should this recommendation be implemented, the legal status of the charter and possible consequences for failing to comply are not clear.

What relevant anti-corruption provisions and practices are currently in place in South Africa?

South Africa does not currently have a national charter against corruption, nor does it have a single applicable code of conduct. There are, however, relevant laws and practices in place that touch on similar elements.

The primary anti-corruption legislation of South Africa is contained in the 2004 Prevention and Combatting of Corrupt Activities Act (PRECCA). PRECCA criminalises actions that constitute corruption if done in South Africa. The law applies indiscriminately to any person or legal person in South Africa and may also apply to actions performed outside of the country in certain circumstances. In other words, as the law stands anyone that engages in corruption in South Africa can be held to account regardless of whether they opt-in or agree to a charter or code of conduct.

In addition, a number of codes of conduct apply to public officials. For example, employees of the state that fall within the ambit of the 1994 Public Service Act are required to comply with the 2016 Public Service Regulations. Part 1 of these regulations contains a code of conduct that applies to these employees. Similarly, cabinet members fall under the 1998 Executive Members’ Ethics Act and are subject to the Executive Ethics Code published under that act. The South African parliament has also adopted the Code of Ethical Conduct and Disclosure of Members’ Interests for Assembly and Permanent Council Members, which covers politicians who are members of parliament. Certain national and provincial departments and legislatures have also adopted their own codes of conduct.

Many public and private sector institutions and companies have their own codes of conduct. Some of these institutions and companies require third parties that they do business with to agree to comply with the codes. A prominent example is Eskom, South Africa’s public electricity utility. Eskom has a so-called ‘integrity pact’ (20-page / 5.49MB PDF) published on its website, which prescribes the “ethical conduct” that Eskom expects from its suppliers. The document applies to Eskom and “all its suppliers”.

Given the above, whilst South Africa does not have a centralised national charter at this stage, relevant aspects of what Zondo has recommended are already in place – albeit in a disparate and inconsistent set of laws and discretionary practices.

Should South Africa adopt a national charter against corruption?

As we have seen, adopting a national charter against corruption will not fundamentally change the law in South Africa. Furthermore, adding another code of conduct may create confusion and duplication for public officials and servants, who are already subject to codes of conduct.

Whilst the national charter could have direct legal implications for public sector procurement officers and persons that bid for public sector work, the nature of its legal status is not clear from what has been recommended. In particularly, Zondo has not provided a clear indication of whether the intention is for the charter to apply to everyone in South Africa or only those that are required to – or elect to – commit to upholding its principles. He has also not provided a clear indication of what the consequences will be if someone does not comply, including whether this would amount to a crime or some lesser form of legal breach.

Notwithstanding the above, it is difficult to disagree with Zondo that there is a need to turn the page. South Africa is at a watershed moment where there can be a collective decision and commitment for things to change. The substantive legal impact will be limited. Perhaps the most important changes that we anticipate could arise for companies are:

• Whilst we read the recommended signing by listed companies as something that is primarily symbolic, it may be that the Johannesburg Stock Exchange imposes its own rules linked to complying with the national charter that can result in some form of sanction against listed companies that do not comply.
• For companies that bid for public sector work, the legal implications of committing to comply with the national charter will need to be carefully considered. Whilst the details of what this compliance looks like remains to be determined, there is a high likelihood that companies will need to tighten up their practices to ensure that they comply with another layer of added legal obligations to avoid adverse consequences.

Legal impact aside, the symbolic impact of the proposed national charter could be immeasurable if done properly. Sometimes symbolic steps give rise to more meaningful change than implementing new laws. The nation clearly wants to see meaningful change and perhaps the first step is a collective agreement to stop corruption and do things differently.