Johannesburg - South African companies operating in the UK could find themselves in trouble if they don’t comply with the country’s new Bribery Act. The law, which came into force on July 1 last year, is also drawing attention locally as it contains important lessons that could help South Africa in its fight against corruption.
The Gordon Institute of Business Science and the British High Commission in Pretoria recently hosted a discussion on the act in Illovo.
The UK’s new robust approach to bribery has far-reaching implications for South African businesses with operations in the UK, including their sub-contractors, suppliers, joint ventures, employees, subsidiaries, branches and agents.
However, the new law is also a chance for companies to ensure that they have formal and active processes in place to deal with acts of corruption such as bribery.
Some of the key areas under scrutiny are kickbacks, facilitation payments, gifts and entertainment.
Speaking at the event, Roderick Macauley, criminal law adviser to the UK Ministry of Justice, explained that there had been no other law like this in the UK. “The Bribery Act in itself won’t change the world, but it forms part of a growing consensus that will eventually tip the balance in favour of those who wish to pursue their business objectives ethically.”
He said the Bribery Act was widely regarded as cutting-edge legislation, which encouraged a culture of bribery prevention.
“This is not about creating paper compliance,” he said, adding that bribery was a global problem and bad for business because it damaged economies and destabilised international markets.
Section 7 of the act is what makes the legislation stand out, as it deals with the failure of a commercial company to prevent bribery.
According to the act, companies are required to set up a policy to prevent bribery. To help them achieve this, the government has published guiding principles as part of the act.
Matthew Woodford, a partner at UK-based law firm Browne Jacobson LLP, said that although the guidelines weren’t legally binding, it was a good place to start.
He encouraged companies to ensure that adequate procedures were in place, and to keep detailed records of their policy’s implementation, application and revision, in the event of legal action.
Professor Deon Rossouw, chief executive of the Ethics Institute of SA, said laws were not always that effective at promoting responsible behaviour, but what the Bribery Act set out to do was place an emphasis on being proactive and building an ethical culture in business that would make bribery less likely to occur.
“What the Bribery Act introduces is not new, it is an interesting reconfiguration,” Rossouw said.
He said South Africa had elements of the act in place, but under many laws and regulations, such as the Companies Act, the Prevention and Combating of Corrupt Activities Act and the King III report on corporate governance.
“What I like about the UK act is that there is consolidation,” he said.
He believed that putting a stop to corruption in business started with support from top management.
“The King III report speaks to this need and the role of top leadership to instil a culture of ethical behaviour in a company.”
David Lewis, executive director of Corruption Watch, said South Africa had a strong statutory legislative framework to combat corruption, but enforcement was lacking.
“There is a high level of corporate tolerance and complicity to corruption,” Lewis said, adding that despite good laws, contrary legislation such as the secrecy bill would trump the Promotion of Access to Information Act.
The goal of Corruption Watch is to encourage and enable public participation in combating corruption, and also hold accountable those who control public resources.
“Corruption in all its manifestations is an offence against the public.
“The economic costs of corruption are huge,” he said, adding that those worst affected were people dependent on public resources in health, transport and security. - www.corruptionwatch.org.za