SA has fallen behind international trends in not having a defined policy or legislative framework for the conduct of non-trial resolution of foreign bribery cases. It is something that is common practice among the signatories of the OECD Anti-Bribery Convention, which came into force in 1999.
A study by the Organisation for Economic Co-operation and Development (OECD) found that about 80% of the 890 foreign bribery cases successfully concluded by signatories to the convention over the 20 years since 1999, were concluded through non-trial resolutions with the biggest users of this mechanism being Germany, the UK and the US.
The lack of a framework for non-trial resolutions is something the National Prosecuting Authority (NPA) wants to correct. The head of the NPA’s Investigative Directorate (ID), Hermione Cronje, noted in a recent briefing to parliament’s justice committee that there were at least three cases that could beneficially be settled through a non-trial resolution, a mechanism that was used to settle the case of construction company ABB’s irregular contract with Eskom for work done on the Kusile power station. She added that there were a number of international corporations that were interested in conducting non-trial resolution agreements with the ID about corruption at state-owned enterprises.
While the dispute with ABB was settled in this way — ABB agreed to pay about R1.6bn in December 2020 — the lack of a framework that provides guidance to the NPA on a whole range of matters related to the way these non-trial resolutions are conducted means, for one thing, that there is no certainty and transparency for the alleged offenders entering into the process. The absence of such a framework also meant that the ID could not exact a fine on ABB in addition to the restitution claim.
A framework would, among other things, designate the authority that can enter into these types of agreements, delineate the discretion available to the prosecutor and determine the types of offences that can be resolved in this manner, the type of sanctions, the maximum sentences that can be imposed and the role of the courts in validating the agreement.
The mechanism has advantages for both the prosecutors and the alleged offender. Foreign bribery cases are notoriously complex and difficult to prosecute in court and require enormous amounts of time, financial resources and professional expertise such as forensic accountants, which the NPA sorely lacks. They are often multi-jurisdictional, which adds to the complexity of a trial.
For the alleged offenders, a settlement outside the courts offers the potential of a reduced sentence, further enhanced if they are rewarded for good behaviour such as self reporting and co-operation; an escape from a conviction, which could bar them from government contracts; and avoidance of exposure to bad publicity and the reputational damage that a drawn-out trial could bring.
However, the OECD cautions in its study on non-trial resolutions that no matter how strong the incentive might seem for the alleged offender, it will be ineffective unless the alternative is a strong likelihood of a trial and conviction. There will be little incentive, it notes, if the bribery has taken place in a system that is generally unable to bring cases to conclusion.
In the SA context, the speedy resolution of corruption and foreign bribery cases is of especial importance given our history of widespread corruption during the state capture years, which resulted in the estimated loss of hundreds of billions of rand, a lot of which left the country. The ID, which was set up to deal with high-profile corruption cases has not scratched the surface of these corruption cases. Achieving a speedy resolution would hasten the return of money to the financially weak state-owned enterprises that were fleeced.
Of course non-trial resolutions have their critics who argue, for example, that the process offers companies more lenient treatment than a court might dish out and question its ability to fairly and effectively deliver justice. There are also concerns about transparency. These are matters that can be considered when the NPA — in possible collaboration with the government — draws up a framework for the process.
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