Prevention of Corruption Bill: deliberations

Meeting report

JUSTICE AND CONSTITUTIONAL DEVELOPMENT PORTFOLIO COMMITTEE
17 September 2002
PREVENTION OF CORRUPTION BILL: DELIBERATIONS

Chairperson: Adv J H De Lange (ANC)

Documents handed out:
Prevention of Corruption Bill (as at 12 September)

SUMMARY
The Committee considered Clauses 1 to 10. No agreement could be reached on the definition of "corruptly". The definition of "ratification" was also widely discussed, particularly with regard to including the definition of "reward" within it. The Committee grappled with drawing and defining the line between an innocent transaction and a corrupt transaction.

MINUTES
Preamble
The Chair asked Mr Nel what had been done to the preamble.

Mr Nel responded that at the original meeting he had been asked to include a sentence on what was actually being done with corruption, i.e. that it was being unbundled.

Definitions
Mr Nel explained that he was proposing to the deletion of the existing definition of "agent" which had been based on the 1958 Act. There had been a lot of criticism of the definition in the South African Law Reports, especially with regard to the inclusion of the word "includes". He had come up with two options for a new definition. The first option was a definition as contained in the law of agency - as requested by the Committee - especially the first part, and moved away from reference to being employed. The second option was based on US legislation and was short and seemed to include everything.

The Chair asked for comment and Dr Delport (DP) indicated that he supported the second option.

Mr Nel continued that he had had no direction with regard to "associate". Footnotes 4 and 5 indicated where in the Bill the definition had been referred. The definition of "corruptly" also included any privileged relationship on the recommendation of the SAPS. They had also wanted the inclusion of a new Clause regarding the disclosure of information. Sub (b) included a sporting event - based on Mr de Costa's recommendation.

The Chair noted that employment relationship had been removed.

Mr Nel continued that he had taken out "or against the spirit of" and had included any conduct. Mr De Costa had proposed deleting "any employment relationship" but he felt that it should stay.

The Chair asked if Mr Nel wanted to keep the word "corruptly".

Mr Nel responded that he did. England and Scotland were moving away from a definition of "corruptly" but there were indications that the cases were in "disarray" because of it. He felt that including "corruptly" without a definition was not going to work.

The Chair asked what the effect of not putting in "corruptly" would be.

Mr Nel replied that it would be difficult as innocent people would be hit and genuine offenders would not. In 1992 the South African Law Commission had decided not to include it but a Parliamentary Committee had decided that it should be included. His opinion was that it should be defined.

The Chair asked what the definition in case law was.

Mr Nel responded that there was no definition in case law. The courts had only referred to improper transactions.

The Chair questioned what the opinion of the House of Lords had been.

Mr Nel replied that they had referred to it as purposely doing an act which the law forbids as tending to corrupt, and had been criticised for it. US legislation was interesting as it had two interpretations of "corruptly".

Dr Delport said that the problem with the definition was that one could not define an adverb in terms of a noun. It deals with intent but was being defined in terms of unlawfulness instead of intent.

Mr Nel said that in South Africa, the definition had nothing to do with intent and was in line with US legislation, which places the emphasis on improper conduct.

Dr Delport said that he had not meant intention in the narrow sense - it had to do with male fides and achieving a certain result with a certain object. It was the aim which makes it corrupt.

Mr Nel said that in US legislation it was the manner in which he acted that was important.

The Chair felt that if "corruptly" was not included it would create problems because no one would know what it means, and if it were included it seemed that it would have the same effect.

Mr Nel felt that if it were left out the innocent person would be effected as innocent actions would fall under the provision if the word "corruptly" were to be left out.

The Chair felt that if one were induced subjectively to work better or not it would still amount to corruption. If someone worked better because he was promised something extra it would be corrupt, as he would be deviating from his normal course of action.

Mr Nel responded that even an estate agent who was promised a bonus if he sold four houses would fall under the Clause and questioned if that was the intention.

Mr Magwanishe (ANC) said that he had been about to raise the same point.

Mr Landers (ANC) said that he had always assumed that the courts would know when an act was corrupt or not. He was not speaking for or against a definition of corruptly, but it would have to be the role of State to prove intent.

The Chair asked what the elements of the crime were. If "corruptly" were not included the courts would not read the unlawfulness. The obvious answer was that a crime always includes unlawfulness. There was no unlawfulness involved in selling a house and for that reason he did not think that innocent people would be caught. This still did not mean that "corruptly" was necessary although it circumscribes the unlawfulness. Unlawfulness was always an element of a crime so he did not know if the definition would take it any further. It does circumscribe the unlawfulness part of certain rules and regulations and so he thought that to circumscribe "inducement" would take it even further.

Mr Nel stated that he had been unable to find a country that had not included a definition of "corruptly". He could also not find a piece of legislation that defined "inducement".

The Chair said that he wanted to capture "inducement" to mean unlawfulness.

Mr Nel responded that the inducement element was to cause something to happen, and was the intention.

The Chair said that one could be induced to do or not to do something. The inducement caused one to make that decision but it was the illegality that caused one to act wrongly.

Mr Mzizi (IFP) said that he had also looked at "corruptly" and "inducement" and found that "corruptly" was suitable. He understood it to mean the manner in which a person did something.

Ms Chohan-Kota (ANC) thought that given the way in which the definitions were set out, both "corruptly" and "inducement" would be needed and both needed to have an element of unlawfulness attached to it. There were two elements to the crime -if someone corruptly accepts a gift, that in itself should be a crime, regardless of whether the action was carried out. Likewise, if someone were inducing someone to accept a bribe corruptly, that should also be a crime.

The Chair asked if that would not fall under offer or induce.

Ms Chohan-Kota replied that it would not because it has the word "or". The point should be that it needs to be captured at both ends of the crime and that was what made it so difficult. However, using the word "corruptly" as it was the adverb that goes before words like "accepts" or "offers" could do this.

The Chair still questioned how this would go further than unlawfulness, as there needed to be an element of unlawfulness.

Mr Landers suggested inserting the word "unlawful". He could see where the difficulty lay: everyone knew what corruption was, but it was difficult to explain.

The Chair felt that the problem was that the definition was "corruptly" actually defined "unlawfulness" and not "corruptly", while Mr Nel wanted a particular kind of unlawfulness.

Dr Delport said that the act is designed to bring about an unjustified result, so the bonus that civil servants receive is not a bribe.

The Chair thought that that was something to look at. He went through the elements of the crime - corruptly referred to the unlawfulness. Inducement referred to the mens rea and the giving and accepting was the actus reus.

Mr Nel said that what was significant from the US legislation was that they bring it in terms of the constitutionality of the provision, in that it is vague.

The Chair asked if he was saying that where specific offences were being created, for MP's for example, the word "corruptly" would not be needed.

Mr Nel said that he would prefer to have it, but some countries do not use it.

The Chair said that he could understand why it was needed in general offences and not specific offences. Another definition would have to be worked on as the current definition dealt only with unlawfulness. Dr Delports' suggestions and US legislation would have to be considered to come up the unlawful doing of something that amounts to corruption.

Mr Nel, moving on to "dealing" said that there was no real problem with the definition. He agreed with the proposals made by Mr De Costa.
Gambling had been split from the sporting definition. The definition of "gratification" now included "whether in cash or otherwise". The Chair had suggested credit but he had found a definition where the word "otherwise" had been used. Residential or holiday accommodation was also now included. There had been a proposal for non-valuable consideration but not reference to it could be found in our law and he did not think that it would make sense.

The Chair said that it had been Mr De Costa who had made the submission. He suggested making it refer to any consideration. He questioned what non-valuable consideration was - to him it sounded like nothing.

Ms Camerer (NNP) felt that if the word "corruptly" were not used, the Bill would capture business dealings as well.

Dr Delport said that he was more convinced that it was something like an act designed to achieve something.

The Chair agreed with Dr Delport, and said that it was designed to achieve contravention of any law.

Dr Delport said that it was not the contravention of any law but it was rather an unjustified result.

The Chair felt that although it may not be contravening the law and may amount to simply doing what the job with be, in most cases it would be contravening the law. Conduct would be either in terms of contravening the law or achieving a result.

Dr Delport felt that it would be to achieve a pre-designed result.

Ms Camerer explained about "junkets" that formed part of business practice where businessmen and their wives were flown off, for example, to board meetings in the Caribbean or wine estates in France, which were considered to be a "perk"'. She was afraid that these type of business trips would be labelled as corruption.

The Chair argued that if government officials were allowed to do the same it would be labelled as corruption. It was not a problem if it came out of someone's own pocket, but if company money were used to pay for it, it would be corrupt.

Ms Camerer said that often government officials were introduced at these meetings.

The Chair said that they were not per se corrupt, but if someone were introduced in order to do something, then it could be corrupt.

Mr Landers questioned why it was fine for the public sector to do it and not government.

Adv Masuta (ANC) said that the process that one would have to apply to test this is if the gratification was being applied corruptly. If the practice is there, was it contravening any law, and if not, then it was not unlawful. If it did, then the practice of taking people on holiday would be unlawful.

The Chair said that if the intention was to "sweeten people up", then it was not corrupt and that was fine as long as it was declared, but the gratification must be broad and wide and other the other things narrowed.
He did not understand the concept of non-valuable, so he thought it should be left out. He noted that in subclause (i) another word could be found for "pretend". He suggested that (e) be moved to the end as a general catchall as (j) was a specific catchall. He questioned how (j) could be part of the definition of "gratification" if it included the same word.

Mr Nel said that he would look at it and come back on that regard.

The Chair said that it was unacceptable to include "gratification" in its own definition.

Moving on to "inducement", the Chair said that the original intention had been to make the definition a combination of gratification and corruptly. He inquired as to what had been done.

Mr Nel replied that he had found a definition not in legislation but in a university's code of conduct.

Ms Camerer thought that the word coerce, included in the definition, was the opposite of induce so she did not think that it should be there as it was a contradiction in terms.

Mr Nel said that his feeling was that there should not be a definition of "inducement".

The Chair thought that after the discussion that had been had that morning, the definition as it stood would be wrong. He asked that it be "kept on ice".

Ms Camerer said that she did not think that "assist" should form part of the definition either, but that what was lacking was the illegal or improper purpose.

Mr Nel did not agree.

Ms Camerer said that it had to deal with changing a person's mind and did not see how assisting a person could change their mind.

Mr Nel replied that corruption did not necessarily mean changing a person's mind - he could be quite happy to do whatever it is.

The Chair did not think that the matter should be given too much attention.

Mr Nel moved on to the definition of "listed company", mentioned in Clause 14B, and recommended looked at the definition when that Clause was reached.
The definition of "Minister" had been deleted because no reference was made in the Bill to the Minister. Provision had previously been made for regulations but that had been dropped, making the definition unnecessary.

Adv Masuta (ANC) inquired as to the effect of leaving out the definition.

Mr Nel explained that if Parliament did not expressly assign a Minister to a Bill, the Minister introducing the Bill, by convention, became the relevant Minister.

The Chair asked why "agent" was part of the definition of "official".

Mr Nel responded that it was so, for example, the SAPS could make use of an agent. The Fire Arms Control Act made use of an agent.

The Chair asked why it was necessary if "agent" already had a definition.

Mr Nel answered that it was because in this sense the agent is an official and was not necessarily so in the other sense.

The Chair moved on to the definition of "partner", which had been deleted.

Mr Nel remarked that this had been Mr De Costa's proposal. The definition of "partner" had been removed and included under the definition of spouse, to bring it in line with recent Constitutional Court decisions.

Ms Camerer pointed out that it had lost Mr De Costa's element of people living together permanently as if married.

Mr Swart stated that the whole debate on whether it was necessary to include relationships had already been had.

Mr Nel said that the had got the definition from the latest Act on income tax.

The Chair believed it to be in line with the latest Constitutional Court judgement, which he had recently read. He asked that the Satchwell judgement be checked, with regard to a relationship that intends to be permanent, and said that there should be an "and" between sub(b) and (c).

Mr Nel felt that there should not be an "and".

The Chair explained that it could be one of the three or all of them.

Mr Nel was of the opinion that it could not be all of the three so it could only be an "or".

The Chair moved to the definition of "political office bearer".

Mr Nel said that this is where a new offence has been created for corruptly giving or receiving gratification to or from office bearers.

The Chair was not sure that traditional leaders should be included in the definition.

Mr Magwanishe did not think that the definition excluded a lot of people.

Ms Camerer asked why municipal executives, mayors and so forth were excluded.

Mr Nel asked if they were paid in terms of political office bearers and said that he would check. He had taken the definition from an Act and would check it.

The Chair said that the offence that they were trying to create was one in relating to members of a legislature and so was not sure if the intention was to include the executive.

Ms Camerer said that according to the provision the President could be bribed with impunity.

The Chair suggested that, to avoid problems, the definition should apply to members of the national, provincial and local legislatures and did not think that traditional leaders should be there. He asked for the definition to apply to "members of parliament, provincial legislatures and municipal councils".

The Chair, continuing on to "public body" asked that subclause (ii) be changed from "in terms of any law or the common law" to "in terms of any legislation" as he did not want to include the common law.

Mr Nel moved on to the definition of "public service" and said that the definition had been deleted as the phrase did not appear anywhere in the Bill. The definition of "relative" had had "partner" removed from it but now included a reference to step brother or step sister.

A definition of "reward" had been included as it was relevant to a lot of Clauses.

The Chair noted that "gambling" had been removed from the definition of "sporting event" and was now on its own.

Mr Nel asked that "undue gratification" be dealt with when the offences under Clauses 13(1), (2) and 14 were looked at.

Chapter 2: Offences and penalties
Clause 3: offence of corruptly accepting gratification
Mr Nel explained that subclause (2) had been removed and was dealt with in a specific Clause on penalties. Subclause three related to presumptions.

Ms Camerer felt that the Clause could not be dealt with until the definition of "corruptly" had been resolved.

The Chair agreed.

Mr Nel said that he had inserted the word "general" into the heading. The Committee had suggested that he insert the words "corruptly induce" into the Clause but he had not done so. He had not as yet included it because all other legislation had used the word "corruptly" at the beginning as it related to the element of unlawfulness.

The Chair asked if it made a difference other than to making the Clause read better. He felt that what becomes wrong is that it is an inducement to corruptly do or not to do and asked that it be drafted both ways. The other problem was that when "corruptly" was put next to "accepts or agrees" it looked too much like intention. He remarked that "offer" was now included in Clause 3 when previously it had been elsewhere.

Mr Nel had said that previously it had been in Clause 16 but he had looked at it and thought that it was not covered sufficiently. There was something missing from Clause 16 that was now included in Clause 3.

The Chair asked how it was possible to offer to accept.

Mr Nel explained that the other person was approached and offered to accept an offer. Subclauses (3) and (4) had been moved to Clause 20(a), as a presumption Clause, and combined as the Committee had requested.

The Chair asked if there was a similar presumption relating to giving.

Mr Nel replied that there was not.

Clause 4: Offence of corruptly giving gratification
The Chair commented that all the changes that had been asked for had been made.

Mr Nel said that he had also noticed while going through the Clause that the phrase "whether for the benefit of that other person or of another person" appeared sometimes at the beginning of a Clause and sometimes at the end, so he had put it at the end.

Clause 6: Offence of corruptly accepting or giving gratification to political office bearers
The Chair pointed out that the previous Clause 6 had been moved. He felt that the present Clause 6 and 6A was problematic as it was not what was being looked for. Specific offences relating to the legislature and judiciary were being targeted, and for that reason, he did not feel that the prosecuting authority should be included in the Clause.

Clause 7: Offences in respect of tenders
Mr Nel said that he had made provision, as had been requested, for other corrupt offences that could be found in the tendering process. These were now included in subclauses (a) to (c).

The Chair verified that subclause (a) is where there is acceptance and a person has been awarded something. Subclause (b) is where something is given in exchange for a tender being received, while sub(c) relates to inside information. Subclauses (d), (e) and (f) were as they had been originally. The other issue related to blacklisting and sanctions.

Mr Nel said that he had not yet received input from the state law advisors in this regard.

The Chair responded that he wanted an opinion because he had his doubts as to whether it would work as easily as was thought. In general, he felt that Clause 7 had been catered for with the exception of the blacklisting issue.

Clause 8: Corruption of public officer
Mr Nel said that this was the Clause that Ms Taljaard had wanted to include.

The Chair noted that the heading had changed from "bribery" to "corruption".

Clause 8A: Corruption in private sector
Mr Nel explained that if the words "any gratification" were to be used, something must be done to make a distinction between a normal transaction and a corrupt transaction.

The Chair suggested that the word "corruptly" be used.

Mr Nel replied that that would be fine, but if the word "corruptly" were not used, something should be included to differentiate the two situations.

Clause 9: Corruption of witnesses
The Chair noted that the one change suggested by the Committee had been made.

Clause 10: Corruption of foreign public officials
The Chair pointed out that once again there had been a name change from "bribery" to "corruption".

Mr Nel stated that the main change that he had been asked to make was to move the phrase "in order to obtain or retain any contract, business or an improper advantage in the conduct of business is guilty of an offence" to the end of Clause (c).

Ms Camerer fully agreed with the purpose of the Clauses but thought they might be trespassing into the area of goodwill. She questioned how it could be corrupt when it needed to be done with an improper purpose.

The Chair responded that that was why there was an "and" included.

Ms Camerer said that it might be for an improper purpose but not if it were part of a business holiday for people to meet each other.

The Chair was of the opinion that that would constitute corruption and were crimes that were catered for in other countries.

Ms Camerer felt that the problem lay in the definition for "gratification", which was so widely defined that she could not see how things could be pinned onto it.

Ms Chohan-Kota asked if there were a different way of trying to include the reward aspect. It seemed that "reward" should be part of the definition of "gratification" as opposed to standing on its own.

Ms Camerer thought that subclauses (a) and (b) should stay but subclauses (c) and (2) should be removed. The last provision should be a catchall applying to the original introduction.

Ms Chohan-Kota said that there were two main concepts: inducement and gratification, and a third concept of reward could therefore not be introduced.

Mr Nel said, regarding the purpose of the reward, was that in South Africa there was the problem of there being no offence for receiving gratification after an offence was carried out.

Ms Chohan-Kota stated that the gratification would have to be offered before the offence was carried out.

Mr Nel believed it possible to do something legally and then afterwards receive gratification for it, in which case it would be the acceptance that was wrong.

Ms Chohan-Kota did not agree.

Ms Camerer felt that there were situations where it is acceptable, for example, if the mayor were to hand out gold pens on a particular occasion and photographers took pictures. It would be difficult in that situation to refuse the pen.

Dr Delport agreed with Ms Chohan-Kota and felt that there could not be corruption by merely the giving of a reward. A reward has to be related to the time of the giving of gratification. There is a tacit understanding before the act that leads to the corruption. One was treading on dangerous ground by making the acceptance of a reward corruption, when there was no intention for corruption.

Mr Nel was of the opinion that by accepting gratification afterwards, it did not matter if the act itself was done lawfully. It would be corrupt nevertheless.

Ms Camerer felt that goodwill must be excluded as an offence as that was how business was carried out.

The Chair cautioned against creating a loophole.

Ms Camerer said that if it could not be linked to the getting of the tender then it was not corruption. There needed to be a link.

The Chair thought that Dr Delport's suggestion of defining "reward" as "gratification" helped, but did not solve the problem.

Dr Delport said that it was all a question of proof. He did not think that receiving a gold pen was corrupt, but if it were R100 000 there might be a suspicion. The solution presented by Mr Nel was to create an absolute ban, if it were a public official, from receiving a reward.

Mr Nel inquired why, if public officials were not allowed to receive rewards, should the private sector be allowed to do so.

The Chair felt that everyone was talking past each other. If a public official were breaching a regulation, it had nothing to do with anything else. Gratification and inducement were closely linked but reward was not closely linked to gratification.

Dr Delport said that the reward could be used to prove inducement.

Mr Nel stated that the reward had nothing to do with inducement.

The Chair felt that it had everything to do with it as one was induced through gratification and so it could be used to prove there had been an inducement, however that was close to a presumption.

The Chair said that he was confused and needed to get it conceptually right. He was going to have to think much more about the Bill and not rush through it.

He explained that the Judicial Matters, Administrative Justice, Equality and Insolvency Bills would be dealt with the following day.

The meeting was adjourned.