GUIDE TO THE PREVENTION AND COMBATING OF CORRUPT ACTIVITIES ACT
No. 12 of 2004

Contents

The Crimes Created by the Act

1. Introduction

The Prevention and Combating of Corrupt Activities Act creates various crimes of corruption in both the public and private sectors. Some of these crimes:

❉ Apply to members of both the public and private sector.
❉ Deal with the relationship between the public sector and members of the private sector.
❉ Deal with the relationship between members of the private sector.
❉ Cover things related to corrupt activities – like destroying evidence of corruption.

Remember, relationships between people and between businesses in the private sector also create possibilities for corruption.

2. Crimes That Apply to Everyone

a. The general crime of corruption

The general crime of corruption applies to everyone in the private and public sector. It covers both of the following situations:

1. An employee in the private or public sector offers to use their position to help someone else get what they want in return for money or a favour. In this case:
❉ The employee is guilty of corruption.
❉ If the other person accepts the offer, they will also be guilty of corruption.

2. Someone offers an employee in the private or public sector money or a favour to help them to get something that they want. In this case:
❉ The person making the offer is guilty of corruption.
❉ If the employee accepts the offer, they will also be guilty of corruption.

b. Crimes involving contracts

A contract is an agreement between two parties (such as an agreement between a department and private supplier or between two businesses).

The Act makes it a crime for anyone to offer or accept money or favours:
❉ To influence who gets a contract.
❉ To dishonestly fix the price or other money dealt with in the contract.

EXAMPLE

A company needs to contract someone to service its vehicles. Tshepo’s Car Works hears about this. They tell Ms Naidoo (who works for the company) that they will pay her R5 000 if she can convince her boss to give them the contract. They promise her another R5 000 if she can convince her boss to make sure that the contract is for at least R150 000. Both of these offers amount to corruption. If Ms Naidoo agrees to either of them, she will also be guilty.

c. Receiving or offering an unauthorised gratification

This is where employees in either the public or private sectors offer or agree to use their position to illegally give someone a benefit that they are not entitled to.

3. Crimes that deal with the relationship between the private and public sector

a. Crimes involving any public official

❉ If anyone in the private sector offers a public official money or a favour to give them a benefit (including information or material that they have), they will be guilty of corruption.
❉ If the public official agrees, they will both be guilty of corruption.
❉ If any public official offers to do, or does, something for anyone else in the private sector in return for money or a favour, the public official will be guilty of corruption.
❉ If the person or business accepts the offer, they will both be guilty of corruption.

EXAMPLE

Mr Sibiya has applied for a job with ABC International. He wants to know who the other applicants are so that he can find out information to use against them. He offers Ms Bernadie, who works for ABC International, R500 if she will give him the names of the people who have applied for the job. He is guilty of the crime of 'offering an unauthorised benefit'. If Ms Bernadie agrees, she will be guilty of the crime of 'receiving an unauthorised benefit'.

b. Crimes involving members of legislative bodies

A legislative body is a body set up to pass laws.

They are:
❉ Parliament
❉ Provincial legislatures
❉ Municipal Councils

Because their decisions can affect certain businesses, some businesses illegally try to get members of these bodies to decide in their favour. While there is nothing wrong with honestly lobbying for a legislative body to decide in your favour, it is a crime to offer or accept money or favours to do so.

EXAMPLE

Hole-in-One Golf Company wants to build a golf course next to the sea. However, the land is home to a rare type of bird that will be endangered if the golf course is built.

In fact, a conservation group has been lobbying the provincial government for some time to have the land declared a nature reserve.

They have held demonstrations and have prepared a list of signatures of people who want the land declared a nature reserve. These actions are all legal. The provincial legislature is to vote on the issue in the next six weeks. The Hole-in-One Golf Company secretly meets with members of the legislature and offers them free membership if they vote against the nature reserve. The Hole-in-One Golf Company is guilty of corruption – and any members who agree will also be guilty.

c. Crimes involving judges, magistrates & witnesses

❉ It is a crime for anyone to offer a magistrate or judge money or favours to decide a case in a particular way.
❉ It is a crime for a magistrate or judge to ask for or accept money or favours to decide a case in one side’s favour.
❉ It is a crime to offer a witness in a case a benefit to get them to testify in your favour.


Sally’s Car Hire pays Valley View Cars for five cars. Valley View Cars never deliver the cars. Sally’s Car Hire sues Valley View Cars for its money back. The owner of Valley View Cars offers the magistrate hearing the case a case of whisky to decide in their favour. Valley View Cars are guilty of corruption – and if the magistrate accepts the offer, both parties will be guilty.

d. Contracts between the public and private sectors

As we have already seen, the Act makes it a crime to use corruption to get a contract or to influence the price of the contract. The Act also makes it a crime for someone in the private sector who has a contract with government (or who is trying to get one):

❉ To do anything dishonest to promote the election of anyone to Parliament, a Provincial Legislature or a Municipal Council; or
❉ To influence the result of such an election.

e. Crimes related to tenders

Whenever government spends a large amount of money for goods and services, it must go through a 'tender' process. During a tender, people and companies tell government in advance what they will do and what it will cost by submitting documents called 'tenders'. The government then chooses from amongst these tenders.

EXAMPLE

Ms Viljoen’s company has a contract with a Municipal Council to collect rubbish on their behalf. The contract is near its end and municipal elections are just around the corner. Ms Viljoen tells a Councillor that she will make sure that he is elected if he agrees to help her get a new contract with her company after the election.

NOTE

The tender process has many rules that have to be followed. Anyone responsible for working with tenders must make sure they have a proper and complete understanding of all of these rules.

Because a lot of money is involved, there is obviously a risk of corruption during tenders.

For example:
❉ Businesses might pay to find out what other companies have quoted.
❉ A person on the panel that decides who gets the tender may offer to vote for a certain business if that business pays them a fee.
❉ Some businesses make mistakes in their tender documents. When they realise this, they might want to withdraw the tender. However, this is illegal – once a tender is submitted, it may not be withdrawn. To deal with these problems, the Act makes it a crime to offer or accept money or favours:
❉ To award the tender to anyone.
❉ For anyone to try to influence the award of the tender to another company or person – for example, by submitting a tender that makes the other company or person's tender look better or cheaper.
❉ To withdraw a tender once it has been made.

4. Crimes that apply only to the private sector

Doing business in foreign countries

The Act recognises that South African businesses may try to corrupt officials of foreign governments – for example, to get them to grant the business a licence or contract that it is not entitled to. To prevent this, the Act makes any attempt to unduly influence a foreign official a crime. Even though the official is in a foreign country, the South African person or business that corrupts (or tries to corrupt) them will be prosecuted and sentenced in South Africa.

Vuka Wena Coffee Company imports coffee from the Republic of Lubomba. It has to pay duties and taxes to the Lubomban government. To save money, it offers to pay an official in the Lubomban government R2000 a month if they allow the coffee to leave the country without the duties and taxes having to be paid. The Vuka Wena Coffee Company is guilty of corruption.

5. Crimes that apply only to the public sector

The Act creates at least one crime that only a government employee can commit:

Being a member of a public body & getting or holding a private interest in a contract with that body.

Some members of public bodies own, are closely linked to or are members of businesses that provide goods or services that government needs. They then use their positions to assist these businesses to get work from the public body that employs them. In other cases, they might buy shares in or join companies that already have work with government. The Act makes both of these situations crimes.



Mr Pityana is the Mayor of a big Municipal Council. He also owns a local restaurant. Mr Pityana uses his power to make sure that the restaurant gets a contract with his Municipal Council to make food for their canteen.

WHAT IS A PUBLIC BODY?

The Act defines public bodies as:

❉ Every government department - at national, provincial and local levels.
❉ Any other institution when it is performing a duty or function in terms of the Constitution or other written laws – like the Human Rights Commission and Office of the Public Protector.

However, this crime does not apply to:

❉ People who own shares in companies that have been listed on the Johannesburg Securities Exchange when these companies do business with government.

❉ Government employees whose contracts of employment do not say that they may not hold an interest in a private company that does business with government.

❉ A government employee who gets the contract through a fair tender process – as long as their contract does not say that they may not hold an interest in a private company that does business with government.

NOTE

It is possible that someone has an interest in a business and simply does not know that it is doing business with the public body that they work for. Although this might be a defence if they are charged, the Act does say that people who should know a fact and who do nothing to find out whether it is true will be regarded as having known about the fact.

6. Other Crimes

We have looked at the most common crimes in the relationship between the private sector and the public sector, and in the way private companies do business with each other.

The Act creates many other crimes though. For example, it is a crime:
❉ For people charged with a crime to offer money or favours to the police or prosecutor to drop the case.
❉ To interfere with an investigation into corruption.
❉ To assist someone involved in corruption – either during the act itself, or afterwards.


Mr Mhlongo is being investigated for corruption. He wipes out all of the information on his computer so that no trace of the corrupt activity remains. Although it might be difficult to prove the corruption, Mr Mhlongo can still be found guilty of the crime of 'interfering with an investigation'.