Under the policy, the NPA can hold a corporation to account for multi-jurisdictional criminal transgressions outside of the formal criminal justice system, at pre-trial stage. It provides for companies to come clean about corruption and pay appropriate restitution in exchange for avoiding criminal prosecution. For the state, the process allows savings on cost, time and resources attributable to fighting drawn-out corruption cases.
The ADR policy sets out guiding principles that need to be applied when the state is considering a resolution through ADR.
The first principle relates to legality and rationality and provides that the primary aim of decisions to resolve corruption through ADR is to uphold the rule of law by promoting corporate accountability for corruption offenses, and that decisions must be within the legal authority conferred upon the NPA. Decisions must align with objectively justifiable public interest considerations, as articulated in the prosecution policy and policy directives.
The second principle relates to public interest. It further provides that, as guardians of the public interest, NPA decisions should be based on the specific facts of each case, informed by public interest factors.
The third principle confirms that the NPA must apply guided discretion in when and how it applies the corporate ADR procedure. Specific factors that should be used to guide the discretion are listed as part of the third principle. These essentially operate as conditions that businesses should look to fulfil if they want their case to be considered under the corporate ADR procedure.
For example, businesses should disclose wrongdoing and proactively remediate, such as by compensating victims; cooperate fully with ongoing and future investigations, asset forfeiture proceedings, and individual or other implicated company prosecutions; and show willingness and capacity to implement and monitor effective compliance programs. Businesses should also look to be able to evidence that there is no pervasive wrongdoing within the company. The NPA will also consider whether there is a likelihood that conviction could result in significant adverse collateral effects on the company’s employees, shareholders, creditors or the economy.
In addition to the factors listed as part of the third principle, the criteria to be considered are dealt with in more detail elsewhere in the policy. Whilst the criteria largely overlap, added criteria include the nature, seriousness, and complexity of unlawful activities, past misconduct of the company, and existence of an effective compliance programme.
The fourth principle relates to transparency and provides for corporate ADR decisions to be documented in writing and summaries to be made publicly available on the website of the NPA. This is to ensure transparency and accountability.
James said: “The publication of the corporate ADR is an excellent development that helps provide policy certainty for companies that want to self-report. We previously advocated for deferred prosecutions agreements to be provided for in South Africa. This policy essentially achieves a similar outcome albeit through a different mechanism.”
“The policy only applies to companies and does not give corrupt individuals a way out. It is clear that any ADR settlement will not preclude the state from taking action against the individuals involved – that includes the employees of the company and third party recipients of bribes. For the state, corporate ADR provides an expedited route to recover money from companies involved in wrongdoing while not precluding them from going after the bad actors that perpetrated the crime. It should place the state in a better position to prosecute individuals, as the cooperation that companies have to provide to benefit from corporate ADR will include disclosing evidence that the state can then use against individuals,” he said.
Simaan led the team at Pinsent Masons that acted as South African counsel for ABB in the negotiation of the first of its kind corporate ADR agreement with the NPA that laid the ground for the policy to be developed and formalised. The team were recognised for their work at an award ceremony run by Global Investigations Review in Washington DC in the US, in November 2023.