Social justice and compliance - anti-corruption unpacked

Rui Lopes, managing director, Lopes Attorneys

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 can’t 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 anti-corruption compliance programme is fast becoming the norm, and so it should be, especially in light of 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 don’t occur or are eradicated as much as possible. 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 don’t implement policies fully in practice. And many employees are not even aware that the policy even 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 conduct an assessment of 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 adhered to at all times.

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 it 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.

The current climate

We are noticing 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, a number of prosecutions are likely to arise.

We have also noted an uptake in the quantity of cases being heard by the specialised commercial crimes courts. 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.