The latest anti-corruption survey from law firm ENSafrica is out – this year 88 organisations, including ENS corporate clients, across Africa participated.
In the latest ENSafrica survey, South Africa is named as one of eight corruption hotspots on the continent, based on the experiences of respondents. Image: ENSafrica.
The survey, said ENSafrica in a statement, is designed to “gauge perceptions regarding an organisation’s anti-corruption compliance commitment to observing local and global requirements, and to see how these compliance processes compare to generally accepted anti-corruption compliance best practice”. It was conducted on an anonymous basis, enabling companies to respond freely without fear of falling foul of legislation (if they had engaged in corrupt activities).
Established over a century ago, ENS (Edward Nathan Sonnenbergs) has 13 offices in seven countries across the continent, with over 620 attorneys specialising in the fields of law, tax, forensics and IP.
Its 2015 anti-corruption survey reveals that although the levels of corruption are perceived to higher than they were in previous years, South Africa has made progress in enacting legislation, as well as raising awareness of the need for anti-bribery compliance in organisations.
Nevertheless, said Steven Powell, the head of forensics at ENS, South Africa is perceived to be one of the eight most corrupt countries on the continent. The other seven are Angola, the DRC, Ghana, Kenya, Mozambique, Nigeria and Uganda.
“This is based on the fact that many of the respondents have encountered bribe requests, solicitations for payment when applying for permits, rights, etc. in these regions,” he said, speaking to talk show host Redi Tlhabi.
Although the survey was spread over companies representing a broad spectrum of industries, the results were not filtered accordingly, said Powell, but in future editions ENS would consider giving details of the levels of bribery in each sector. “The mining industry, however, is one sector where bribery is particularly prevalent.”
Visit the report page for more detailed information.
Key findings
The survey found that companies which have anti-bribery compliance programmes and training for staff in place, which have commitment from the top ranks, and which conduct due diligence on business partners, reported fewer incidents of bribery in contrast with those who do not.
Other key findings include:
- 24% of organisations have experienced an incident of bribery and/or corruption in the past 24 months – an increase of 4% since 2013, with 5% experiencing five or more incidents within the last 24 months;
- just over 90% of organisations surveyed have a policy prohibiting bribes, 52% have an established anti-bribery compliance programme and 43% have conducted a detailed anti-bribery risk assessment of their bribery risks;
- 68% of those surveyed believe that third-party business partners pose the greatest source of bribery risk to their organisations;
- 17% of organisations feel they are highly exposed to bribery in Africa (a drop of 33% compared to 2013), with 71% believing they are moderately exposed to bribery and corruption in Africa;
- Just 36% of organisations surveyed
- are confident that they have proportionate procedures to mitigate bribery risks; or
- believe they are well prepared to respond to the threat of an anti-bribery regulatory investigation;
- 62% of organisations now conduct due diligence screening on third parties, an increase of 22% from 2013;
- Only 40% of organisations have a dedicated anti-bribery training programme for their employees and 15% provide anti-bribery training to their business partners;
- 82% of respondents have a dedicated whistleblower or ethics facility for employees to report incidents of bribery, with 52% of incidents having been reported in this way, as opposed to email and verbal reports to management.
The successful companies have strong commitment from senior management to the anti-corruption programme. Furthermore, top management should be seen to be above reproach on an individual level. This gives other employees the courage to resist getting caught up in corruption.
“The message that we are giving to all our clients,” said Powell, “is that you have to say no. When you go into a new territory and you get a bribe request, as soon as you say yes it’s the start of the slippery slide and the request will be repeated every time. We try to convey the message that you can use your compliance and anti-corruption programmes and policies as protection when you are asked for a bribe.”
Companies have to ensure that they are not soft targets for bribe solicitation, by telling corrupt officials up front that there is no easy access to cash and that policies in any case don’t permit the practice. The official can’t openly complain, and he will move to the next target.
Awareness of the need for compliance could be better
“Our survey exposed that there is greater awareness of anti-corruption compliance, and it’s become important for companies to root out corrupt individuals in their own organisation,” said Powell. This is partly driven by fear of the rigorous enforcement by the US of its Foreign Corrupt Practices Act and to a lesser degree, the UK’s Bribery Act.
“The US has imposed penalties of around $5-billion in the last five years alone. These efforts have been emulated, and the cumulative efforts make companies fearful of breaking the law. The world is becoming a tougher place for corrupt parties to operate in.”
But while many companies are taking steps to curb and eliminate corruption, Powell, said, there are equally many who are not aware that they have legal responsibilities to do so.
“South Africa has adopted the OECD recommendations into our Companies Act, and there’s an obligation on companies to monitor their progress and standing with regard to the implementation of these recommendations – but if you ask corporates in South Africa to respond, a large proportion of them are not even aware that the OECD recommendations exist.”
This lack of enforcement is one area where South Africa is lacking, said Powell, and the OECD has pointed this out in several reports. Eradicating the culture of impunity by complying with anti-corruption legislation, enforcing it to the letter, and imposing sanctions on transgressors should not be a choice.
“If you make it difficult for companies to bribe – most of these bribes are private sector paying government officials – if you eradicate the ability of the private company to pay the bribe, then you start addressing public corruption at the same time.”
