There has been limited if any progress in South Africa’s attempts to curb foreign bribery over the past two years. This suggests that it remains relatively easy for South African companies to engage in corruption when conducting business outside the country’s borders, notes Corruption Watch.
According to Exporting Corruption 2020: Assessing Enforcement of the OECD Anti-Bribery Convention, a report released today by Transparency International, active enforcement against foreign bribery has significantly decreased on a global scale since 2018. The OECD convention requires signatory countries, of which South Africa is one, to criminalise bribery of foreign public officials and introduce related measures to curb such activities. The report rates countries according to these criteria, ranking them in four categories: ‘Active’, ‘Moderate’, ‘Limited’, and ‘Little or No’ enforcement.
Only four out of 47 countries, which make up 16.5% of global exports, actively enforced legislation against foreign bribery, compared to seven countries and 27% of global exports in 2018. In the 2020 report, nine countries of those surveyed, representing 20.2% of global exports, exercised moderate enforcement, while 15 countries, representing 9.6% of global exports, demonstrated limited enforcement. A staggering 19 countries, 36.5% of global exports, showed little or no enforcement at all. South Africa once again falls in the ‘limited’ group, indicating that there has been no change since the previous 2018 report.
One of the criteria in ranking countries is the progress made in terms of investigations. From 2016 to 2019, South Africa opened 14 investigations, but only commenced one case, and did not conclude any cases with sanctions. The report references the investigation into MTN’s dealings in Iran and Turkey, which has been dragging on since 2012.
“As a country, South Africa has not done well when it comes to transparency of enforcement information,” says Karam Singh, head of legal and investigations at Corruption Watch. “This translates into a dragging of its heels in releasing data on mutual legal assistance, which is only made available under freedom of information requests, but should be published as a matter of course. Sadly, we have a long way to go in meeting the standards of enforcement that the OECD Convention envisages,” he adds.
Of the greatest concern is the fact that there is still no central register of beneficial ownership information in South Africa. In 2016 after the much-vaunted UK Anti-Corruption Conference, South Africa issued a vague statement that touched broadly on its anti-corruption efforts and never narrowed the focus to anything as specific as beneficial ownership.
The move to create a beneficial ownership register is long overdue in South Africa, which, as a G20 member, is committed to implementing the High-Level Principles on Beneficial Ownership Transparency, adopted in 2014. It should be said, however, that the G20 itself has failed to implement its own resolution at the required pace.
The Transparency International report calls on all signatory countries, as well as the other major exporters, to take decisive steps in enforcing against foreign bribery. For South Africa, the recommendations include:
- Systematically publish enforcement data on foreign bribery, as well as on MLA requests made and received by South African authorities
- Create a publicly accessible register for beneficial ownership information
- Approve legislation providing for deferred prosecution agreements, as an important tool in foreign bribery enforcement
- Increase institutional capacity to detect, investigate and prosecute foreign bribery
- Increase available sanctions for legal persons convicted of foreign bribery
- Strengthen whistle-blower protection
- Dedicate adequate resources to anti-corruption enforcement agencies.
For a full list of recommendations, download and read the report.
It is crucial to enforce the OECD Anti-bribery Convention around the world, as this will help to reduce opportunities for businesses in wealthy countries to export corruption to poorer countries, where its effects are so much more acute.
As stated in the OECD Convention preamble: “…Bribery is a widespread phenomenon in international business transactions, including trade and investment, which raises serious moral and political concerns, undermines good governance and economic development, and distorts international competitive conditions.”
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About Transparency International
Through chapters in more than 100 countries and an international secretariat in Berlin, Transparency International has been leading the fight against corruption for the last 27 years.
About Exporting Corruption
Since 2005, the Exporting Corruption series by Transparency International places countries into four categories of foreign bribery enforcement according to the number of investigations and cases the authorities open and conclude with sanctions over a four-year period. Different weights are assigned according to the stages of enforcement and the significance of cases. Countries’ share of world exports also factors into their placement.