One of the institutions hollowed out by former president Jacob Zuma at the height of state capture was the National Prosecuting Authority (NPA). Shamila Batohi, head of the authority, recently admitted the difficulties encountered in prosecuting state capture cases. This unfortunate period in SA’s democracy saw government officials collude with companies to loot the state.
Batohi has pointed out that the Zondo report on state capture “did not give ... a blueprint for prosecutions” and “raised expectations unreasonably” that prosecutions would “follow quickly”.
As we have seen with the disastrous prosecution of Gupta-linked Nulane Investments, the NPA lacks capacity and resources to prosecute complex crimes. The private sector has offered its assistance. This is what makes the recent directives issued by the prosecuting authority all the more important.
Under the directives, corporations implicated in corrupt activities in SA will now have the option to settle matters with law enforcement agencies via alternative dispute resolution mechanisms. This approach enables them to bypass criminal charges, a first for the country. The long-awaited corporate alternative resolution directive (C-ADR) guides prosecutors on what to consider when engaging companies looking to escape criminal charges.
The NPA has put forward principles that will guide its decision on whether to prosecute or use C-ADR in relation to groups suspected of corruption.
The NPA said one of the principles would be on the legality and rationality of its decisions, and decisions would be made within the confines of the law. The public interest would be considered and the parameters include whether the company timeously and voluntarily makes effective disclosure of evidence and information relating to the alleged unlawful activities.
Other jurisdictions have similar mechanisms. The NPA move, while welcome, carries its own risk which must be addressed.
The mechanism will protect innocent employees from suffering unnecessarily from the actions of a few people in their organisation who engage in corrupt activities. But justice must still be served. Individuals found with their hands in the cookie jar must face the full wrath of the law. The NPA will also need to revisit its policy on receiving donations or other assistance from the private sector as this will put it in a compromising situation.
With this directive, the NPA and companies must be at arm’s length so as to enable the prosecuting authority to do its work without fear or favour as the constitution demands.
The adage “crime does not pay” must hold true. Every cent illegally obtained in the commission of the crime must be returned to the victims.
The NPA must also not relent in its pursuit to beef up its internal capacity to tackle complex commercial crimes. It took six years to bring charges against the masterminds behind the collapse of Steinhoff, and this is a blight on the rule of law.
The success of the defunct Scorpions showed that the state is capable of tackling graft and other crimes if it is well capacitated. The National Treasury must fund the NPA adequately to allow its rebuilding process to be successful.
The C-ADR must also enjoy the support of all South Africans. To achieve this, the process must be totally transparent. It is not comforting that the directive now provides for a summary of agreements with companies to be published on its website to “ensure transparency and accountability”. This does not go far enough. For the public to have confidence, the agreements must be revealed in full. This is the only way the process itself is not corrupted. SA has not had a shortage of self-serving prosecutors who have taken decisions to achieve nefarious ends.
Companies must also take the opportunity presented to them by the C-ADR to contribute to the entrenchment of the rule of law in SA. It is in everybody’s interests.
We have seen through the likes of Steinhoff and Tongaat Hulett what consequences selfish business practices can visit on investors and employees. It is encouraging that the C-ADR does not give rogue directors, executives and employees carte blanche to avoid criminal accountability.
The NPA said the information and evidence gathered through the process might be used to investigate and prosecute directors and other individuals in the company. Engagements with a company “are on the record and with prejudice”.
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