2 years ago

Opportunity Issue 97

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Opportunity, endorsed by the South African Chamber of Commerce and Industry (SACCI), is the mouthpiece for business in Southern Africa. The aim of the publication is to inform potential investors both nationally and internationally of the most relevant business news: trade, investment, financial, market-related information for each business sector, as well as to inform of the latest developments in business legislation from both the public and private sector. In this issue, SACCI’s call is for everyone to work towards the common purpose of getting our economy on a sound footing again.

GOVERNANCE Anti-corrup

GOVERNANCE Anti-corrup tion unpacked Rui Lopes, Managing Director at Lopes Attorneys, discusses the importance of justice for all, and how societal justice and anti-corruption are interlinked. Iam a firm believer that anti-corruption compliance and social justice are synonymous with one another. And when we address the crimes of bribery and corruption, we must ask: do bribery and corruption speak to the collective welfare of the state and, in turn, make an impact on social justice? Modern states around the world are required to gear their societies to advance the health and welfare of their citizens. Welfare touches on a broad spectrum of personal and public aspects of life. There can be no doubt that acts of bribery and corruption in a state, regardless of whether these offences happen in the public or private sector, are detrimental and have a domino effect on public welfare and social justice. States punish the offences of bribery and corruption because they are subversive to the democratic principles of public administration. And in the private sector, this has a considerable impact on the free-market economy. Anti-corruption compliance – an absolute necessity The importance of anti-corruption compliance cannot be stressed enough. Companies are required to ensure that they have a robust and properly thought-out anti-corruption compliance programme that prevents bribery and corruption by employees at all levels. Organisations need to know that implementing an effective anticorruption compliance programme is fast becoming the norm, and so it should be, especially considering the scathing revelations coming out at the State Capture Commission of Inquiry. Compliance policies ensure that businesses are protected and are viewed as more transparent and trustworthy. And it can cut legal expenses for the company in the long run when instances of corruption and/or bribery do not occur or are eradicated as much as possible. 46 |

GOVERNANCE Ethical and transparent practices also help employee motivation and satisfaction. Ignorance should not be bliss Having a robust anti-corruption compliance policy is not quite enough. Too often, companies do not implement policies fully in practice. And many employees are not even aware that the policy exists. Companies must ensure that their employees are aware of the policy and the mechanisms for reporting and investigating that are available to them in the workplace. Companies are also required to provide training around bribery and corruption so that employees are able to identify it in their day-to-day dealings. Without these measures in place, the policy has no value. Where does the anti-corruption compliance policy begin? The first step is ensuring that an anti-corruption compliance policy is properly drafted. This takes some mental work on the part of the company. The company needs to scrutinise their business from the top down and ensure that every level of their company and every aspect of their business is covered. This means undertaking risk evaluations and unpacking the structural organisation of the company. In doing this, the company needs to examine the third parties they engage with and whether there are contracts governing these relationships, the quantity of cash payments and the level of public sector involvement the company has. Once a policy is drafted and adopted, the company should assess whether any other documents would need to speak to the policy. These include instructions, ethics codes and the like. And the company should ensure that internal reporting lines and investigation procedures for any contraventions of the policy are firmly in place and are always adhered to. Policies should be implemented from the top down, as employees should ideally see that leadership and management are abiding by the policies they have implemented. And they should be strictly enforced. The adoption of a Social and Ethics Committee (where it is not obligatory to be created as per the provisions of the Companies Act) should also seriously be considered to ensure oversight and compliance with policy. Additionally, the company could consider establishing a whistle-blower hotline so that employees are able to report contraventions. In these cases, the company should put adequate measures and policies into effect for whistle-blower incidents to assure the employee that they can remain anonymous and to safeguard the integrity of the entire process. _____ __ ___ __ _ _ _ _ _ _ _ __ States punish the offences of bribery and corruption because they are subversive to the democratic principles of public administration ___ __ _____ __ _ _ _ _ _ _ _ _ _ The current climate Recently, there has been a marked increase in bribery and corruption, money laundering and cybercrimes, which, in most instances, seem to be an indication of the current economic climate. In South Africa, the spotlight is currently on State Capture, and the instances of bribery and corruption within the public sector. These are extremely far-reaching and involve several private sector players as well. What we will likely see coming from this is that once the State Capture Commission of Inquiry has finalised testimony, several prosecutions are likely to arise. An uptake in the quantity of cases being heard by the specialised commercial crimes courts has been noted. The latest report issued by the Financial Intelligence Centre notes an alarming increase in money laundering in South Africa. Companies are required to take active steps to curb this and should not be caught off guard, as the repercussions are potentially catastrophic. Social justice has many dimensions, particularly in an economic downturn, where incidents of bribery and corruption are on the rise. Now, more than ever, firm anti-bribery and corruption policies are needed in the bigger picture. ___ __ Rui Lopes, Managing Director at Lopes Attorneys | 47

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