Prevention of Corruption Bill: deliberations

Meeting report

JUSTICE AND CONSTITUTIONAL DEVELOPMENT PORTFOLIO COMMITTEE
16 August 2002
PREVENTION OF CORRUPTION BILL: DELIBERATIONS

PAPERS ISSUED:
Summary of submissions on Prevention of Corruption Bill 2002
Special Investigative Unit proposed amendment to Prevention of Corruption Bill
Submission from Mr Costa: Working Document 1 - 1 August 2002
Corruption Act (No 94 of 1992)
SALC Report of June 1991: Definition of corruption
Comparative Legislation
[email [email protected] for these documents]

Chairperson: Adv De Lange (ANC)

SUMMARY
The Committee deliberated on the public's proposed amendments to the Prevention of Corruption Bill. These are contained in the Summary of Submissions document compiled as a result of the public hearings held on the Bill on 31 July 2002 / 1 August 2002.

MINUTES
Prevention of Corruption Bill
The Chair referred the floor to the Summary of Submissions document that had been received.

Clause 1 Definitions
1.1 Definition of "corruptly" on page 4, subparagraph (iv):

Point 1.1A: Proposal from Werksmans Attorneys regarding the definition of 'corruptly'
Before dealing with the proposal, the Chair directed Mr Nel to explain how the Committee was required to read and interpret the word in the Bill. He noted that the definition, although vaguely stated, appeared to connote intentional conduct. Thus the definition as it stood would be problematic.

Mr G Nel (drafter; NDPP) explained that he had looked at the definition of 'corruptly' as discussed in the SALC Report dealing with the 1992 Act. It was clear that the word, as described internationally, referred to the element of intention. Nevertheless, South Africa was not to adopt that position because the element of intention would be included in specific offences. The result was that 'corruptly' referred to unlawfulness. He pointed out that he was glad to see that this submission from Mr Costa of Werksmans Attorneys adopted the same position.

Adv De Lange asked whether Clause 3 referred to either direct or indirect intention.

Mr Nel responded that the reference would be to direct intention. He suggested actually providing for that by including "with the intent".

Adv De Lange confirmed that the provision related to an inducement or as an award.

Mr Nel explained that the corruption element would be in the fact that such conduct conflicted with a duty.

Adv De Lange stated that the provision should then actually read "any conduct in contravention of or against".

Mr Nel did not have a problem with the proposed wording.

Adv De Lange was not satisfied with the clause "against the spirit" as he was not sure whether it contained a legal requirement. He noted that there were many acts that could be contrary to the spirit of the Constitution, although not satisfying the requirements of illegality.

Mr Nel explained that the aim was to capture elements such as gross negligence.

Adv De Lange did not think that the words were adequate. He added that such a phrase was not common to SA legislation. He made a distinction between tax evasion and tax avoidance in order to establish that a level of illegality would be necessary.

Mr Nel explained that the word 'contravention' alone would be problematic because it would not always be the case that specific rules would be contravened.

Adv De Lange responded that they would then not be dealing with the crime of corruption. He explained that the problem lay in the fact that casting the net too wide would result in all conduct satisfying the requirements of the provision, although not necessarily being crimes of corruption.

Mr Jeffery (ANC) stated that the word 'corruption' was commonly understood as referring to both unlawfulness and intention. As such, the current definition was not one that could be understood because the drafting was not easy to follow.

Adv De Lange asked Mr Nel to inform the Committee what the word 'law' was interpreted to mean by the Interpretation Act.

Mr Nel replied that the word referred only to legislation.

Adv De Lange stated that this meant that the common law was excluded.

Mr Jeffery explained that it was for this reason that Mr Costa had proposed reference to the contravention of both the common law and statutory law.

Mr Nel wondered whether such a change had already been made to the Bill.

Adv De Lange was not happy with the reference to 'spirit of any law'. He felt that the provision should relate only to contraventions. Nevertheless, he wanted to know whether this was the result of the SALC Report.

Mr Nel affirmed that position. He added that he had also looked to international law in terms of which reference would be to the element of intention. He stated that South Africa would definitely not adopt this position.

Adv De Lange called for a comparative analysis with other countries. He referred to the judgement in R v Smith (1912 AD 386) in which the court held that the use of the word 'corruptly' would not be necessary, and referred the Committee to the SALC Report of June 1991 in that regard. Nevertheless, he stated that this debate still did not resolve the issue they were dealing with.

Mr Nel explained that the previous Act did not define the word 'corruptly' and it was for this reason that they sought to be absolutely clear. He referred to the other listed offences and said that it became clear that 'corruptly' would have to be defined.

Adv De Lange said that it would be possible to read the other crimes without the word 'corruptly' He pointed out that Malaysia also made use of the word, and added that he was pleased with the drafting style in that country. He explained that although the word was not defined, 'corruptly' appeared to be commonly used. He noted that the possibility existed that the word was defined through the courts. For this reason, the first question to be dealt with would be whether they needed to use the word corruptly at all. If they were to decide to use the word, it would then be necessary to define it. As far as the definition of corruption, it was clear that:
- The definition would refer to both the common law and statutory law.
- The phrase "in any conduct" would be inserted.
- The reference to the 'spirit' would have to be removed.

Mr Nel found it interesting that the Australian legislation did not even use the word corruptly.

Adv De Lange explained that this was because the words used clearly connoted a reference to the word corruptly. He stated that this would be another way of dealing with the Bill. However, he cautioned that this option may not be as clear as it appeared.

Ms Camerer (NNP) referred to improper conduct and wondered how nepotism would be captured.

Mr Jeffery (ANC) dealt with the reference to the 'spirit' and explained that the lobbying process would be a means of delaying the parliamentary process. This is where the 'spirit' would come in. He gave the additional example of absenting oneself from a meeting, thereby affecting quorum or leading to the outvoting of a protocol.

Adv De Lange responded that those were factual issues which would not be possible to resolve. He had no doubt that the inclusion of 'spirit' would lead to a constitutional challenge as one of the golden rules was that the crime would have to be clearly stated.

Ms Camerer stated that they had ventured to the term 'improper conduct' when dealing with the Prevention of Organised Crime Bill.

Adv De Lange said that the problem would be the resort to intention. The South African context referred only to unlawfulness, thereby making the improper-ness or subjective elements irrelevant. He stated that one of the two proposals from Mr Costa had been accepted. He noted that Mr Costa had removed subclauses 1 (1) (iv) (a) and (d) dealing with the employment relation and the performance of a function. He asked whether there was merit in including Costa's proposed phrase following the inclusion of 'any sporting event', and pointed out that this seemed to only further clarify the position.

Mr Nel found merit in the phrase.

Adv De Lange stated that the phrase served to widen the definition. However, he wondered whether voluntary associations were included. He pointed out that the 'performance of any function' could refer to anything.

Mr Jeffery said he did not think that Mr Costa had intended to delete those two provisions - the focus had probably been on his additions. Adv De Lange agreed and stated that the provisions would remain.

Mr Mzizi (IFP) wanted to know the latest views of Mr Costa.

Adv De Lange referred him to Mr Costa's Working Document of 1 August 2002.

Adv De Lange wondered whether subsections (a) to (d) captured all possible crimes.

Mr Nel responded that he had attempted to capture all crimes although he could not say whether he had done this successfully.

Adv De Lange stated that it could be a problem.

Mr Nel referred the Committee to 4.2.6 in Mr Costa's Working Document which stated that if the existing definition were to be retained, it would have to be read simply. He stated that he did not agree with this proposal.

Adv De Lange felt that the Committee would have to think about the definition.

Mr Nel tended to agree more with the first proposal by Mr Costa and explained that the second proposal would tend to lean on fraudulent conduct.

Adv De Lange added that the definition would then become tautologous. He stated that a further option would be to remove the word corruptly in Clause 3 and to insert the phrase "as inducement to honestly do or not do".

Mr Nel reminded the Committee that he had earlier made reference to undue gratification. Nevertheless, he felt that this would not work either.

Adv De Lange explained that most court cases dealt with conflicts relating to duties owed to a principal, and that this had been captured in the provision. However, there would be a need to ensure that the four subsections dealt with all possible relationships. He suggested that there may exist another way of formulating the provision.

Mr Jeffery was amused by the possible consequences resulting from the present formulation of the definition of corruptly that had been listed by Mr Costa. He wanted to know the exact crimes that this Bill would seek to regulate and suggested that the Committee craft the definition around the crimes.

Adv De Lange explained that the problem would then be determining the unlawfulness of the crime. He supposed that other countries had taken this approach. Nevertheless, the possibility of courts interpreting 'corruptly' differently would still exist. He added that it would be undesirable to create a situation where in order to understand one definition one would need to refer to another definition. He wondered whether there was a definition of inducement and suggested that they may need to define the word.

Mr Jeffery wondered whether the issue would not be what occurs during the inducement stage. He asked where the line would then be drawn.

Ms Chohan Kota (ANC) stated that the crime should be the inducement. Mr Jeffery agreed.

Adv De Lange wanted to know what would separate a legal inducement from an illegal inducement.

Mr Jeffery asked what a legal inducement was.

Adv De Lange gave the example of the offer of a commission to ensure that an employee works harder. The point he was making was that a neutral word may result in casting the net too wide. He suggested that the Committee should attempt to remove the definition completely. Nevertheless, he wondered whether there existed job descriptions where inducements would not be illegal.

Mr Nel gave the example of a salesman.

Ms Chohan Kota could not see how such conduct would be contrary to established practices.

Mr Jeffery wondered whether the Committee should qualify the 'doing or not doing'.

Adv De Lange responded that this is what Mr Nel had suggested through the insertion of the word corruptly. He explained that although wrongfulness was linked to corruptly, wrongfulness would already be an element of any offence. This meant that the question then would be whether they required the definition of corruptly at all. He cautioned that the definition could possibly create a tautology, evident in the fact that the definition had previously resulted in confusion as people assumed that it related to mens rea. He directed the Committee to give the definition more thought. He noted that the Australian Act had been very informative and suggested adding some of the crimes to the South African Bill.

Ms Chohan Kota felt that corruptly as an adverb had been wrongly positioned. She suggested placing it after the word 'inducement'.

Adv De Lange agreed. He noted that this would only occur on the assumption that the Committee wishes to retain the definition of 'corruptly'.

Mr Nel directed the Committee to regard the definition of 'bribery' in the Hong Kong Act.

Adv De Lange explained that it would be easier to omit a reference to the word 'corruptly' when dealing with specific crimes. However, the problem would exist when dealing with general crimes. He pointed out that because subsections (a) to (d) attempted to encapsulate all situations, the problem would not be as great as imagined.

Mr Jeffery felt that private sector crimes would be the difficult crimes. He suggested looking at the private sector conduct that the Committee wishes to eradicate.

Adv De Lange stated that the suggestion would probably have to be effected.

Mr Mzizi said that he was not comfortable with excluding identifiable persons.

Adv De Lange responded that the matter was yet to be resolved.

Mr Nel stated that the Malaysian Act had followed the procedure relating to general and specific crimes as had been outlined by the Chair.

Adv De Lange responded that he had noticed this. He pointed out that such practices would probably become evident when dealing with other jurisdictions. Nevertheless, he stated that they would have to decide where to put the word 'corruptly' when using it. He proposed moving on to the comments on the rest of the Bill.

Mr Jeffery questioned the issue of bribery.

Adv De Lange explained that the past Act had removed the definition and that the current Bill would seek to restate the crime.

Mr Jeffery called for a textbook definition of the crime and suggested that this would assist with the definition of corruptly.

Ms Chohan Kota firmly agreed that the definition would be of assistance. She explained that bribery would occur at the point of inducement, and gave the example that one would not be able to 'corruptly bribe' another. She added that this was the tautology that the Chair had made reference to.

Point 1.1B: Proposal from IDASA on the definition of 'corruptly'
Adv De Lange said that this submission dealt with issues surrounding the debate that the Committee had just engaged in.

Point 1.1C: Proposal from the Catholic Bishops Conference on the definition of 'corruptly'
Adv De Lange explained that the CBS was against the reference to the 'spirit of any law'. He pointed out that he personally agreed with their views and stated that there was some validity in taking such a position.

1.2 Definition of "dealing", on page 4, subparagraph (V):

Point 1.2A: ISS comment on the definition of 'dealing'
Adv De Lange asked Mr Nel and the Committee for a comment on the proposal.

Mr Nel could not see any problem with the proposal.

Ms Camerer suggested the use of the word 'undertaking'. In that regard, she asked if a special meaning had been attached to the proposed word 'promise'.

Adv De Lange wondered whether the word 'promise' should be included at all. He stated that the section dealt with legal obligations and questioned whether a promise could have legal consequences attached to it. He directed Mr Nel to investigate that matter and said that without legal consequences, the word 'promise' would be removed.

Point 1.2B: Inclusion of 'barter'
Mr Nel explained that barter was indeed a legal obligation.

The Committee did not have any problems with the proposal and Adv De Lange directed Mr Nel to include the word 'barter' as suggested by Werksman Attorneys.

Point 1.3A: Definition of 'gratification'
Subclause (i)
Adv De Lange referred the Committee to the ISS submission.

Mr Nel explained that a similar definition for gratification could be found in countries such as Malaysia and Nigeria.

Adv De Lange wanted to know whether the Committee had any problems with ISS's 'abstaining from voting'. There was no clear response form the Committee on this.

Subclause (a) Deletion of "money or"
The Chair wanted to know what was the purpose of the Werksman Attorney proposal for the deletion of "money or" .

Ms Camerer explained that the phrase was found to be meaningless.

Adv De Lange did not totally agree with that. He suggested splitting the provision and placing money in a separate subsection.

Ms Camerer agreed and suggested the phrase 'by way of cash or credit'.

Adv De Lange proposed the statement 'money, cash or credit'.

Ms Camerer proposed listing all the factors and then concluding with the phrase 'in some form of cash or credit'.

Addition of the word 'or' after the word 'donation'
Adv De Lange had no problem with adding the word 'or' after the word 'donation'. He explained that this would be necessary because the phrase 'money or' had been deleted.

Deletion of loan and valuable security
Adv De Lange explained that these were merely forms of gratification and that legality or illegality was not the issue. It was for that reason that he had decided that they should not be removed. He added that a loan should exist because it could take many forms. He wondered what that problem was with the term 'valuable security'.

Ms Camerer explained that Mr Costa preferred a reference to non-valuable security.

Adv De Lange directed Mr Nel to look into the matter.

Mr Nel stated that Mr Costa did not give reasons in support of the deletion.

Ms Camerer responded that Mr Costa did say that there could not be gratification in return for valuable security. She wanted to know the origins of the term.

Adv De Lange explained that most definitions had been sifted from other countries.

Ms Camerer said that that had to be the case because she could not understand why the term had been included.

Adv De Lange directed Mr Nel to sort the matter out with Mr Costa.

Subclause (c)

Insert the words 'offer of……'
Adv De Lange asked Mr Nel whether he thought that the phrase should be retained.

Mr Nel explained that the clauses themselves referred to the offer. Thus he could not see the need for such a phrase.

Residential and Holiday Accommodation
Mr Nel explained that this would be mentioned elsewhere in the Act.

Adv De Lange wondered whether they should not specifically mention them. He explained that he was aware that there had been problems surrounding them, and gave the example of Transkei in that regard.

Dignity
Adv De Lange asked whether dignity could be a form of gratification.

Mr Nel explained that this had been taken from other legislation.

Adv De Lange stated that such a form of gratification could not apply to South Africa.

Mr Jeffery said that dignity could refer to a position. He gave the example of an honorary position.

Adv De Lange responded that that referred to status. He explained that although status could be included here, it would not be possible to make reference to dignity. He added that one would not have the power to bestow dignity on another. Thus it would be preferable to include status and honours.

Mr Jefferey wondered if holiday accommodation would not be included as part of donation or gift.

Adv De Lange responded that it would. Nevertheless, he explained that holiday accommodation had caused much trouble in practice, thereby necessitating an including clause.

Mr Jeffery stated that holiday accommodation should then be specifically included in subclause (a) as it did not fit well under subclause (c).

Adv De Lange did not find a problem with the proposal.

Mr Jefferey suggested the inclusion of an honorary degree in subclause (c).

Adv De Lange stated that there were people that "would kill" for an honorary degree. He added that subclause (e) would cover all situations.

Subclause (e)
Adv De Lange explained that the matter had already been discussed and that Mr Nel would be looking into the matter. He confirmed that the floor did not have any objections to the deletion of 'or'.

Mr Magwanishe (ANC) wanted to know to what 'percentage' referred.

Adv De Lange explained that a percentage was a way of receiving a benefit. He gave the example of obtaining a % of something.

Mr Jeffery wondered whether a percentage did not refer to commission.

Adv De Lange agreed but he added that a percentage could refer to the share.

Subclause (h)
Adv De Lange sought clarification regarding the nature of an unlawful right.

Mr Nel explained that they would not be dealing with unlawfulness in gratification.

Adv De Lange confirmed that position.

Point 1.4: Definition of 'partner'
Adv De Lange explained that the proposal sought to include a definition of a spouse. He stated that although the sympathies were correct, the reference made in Clause 1 (ix) to a spouse would not be correct. Thus he suggested retaining the provision in the suggested form. He added that he was against the definition as it stood in the Bill because it was based on the assumption that the relationships would be based on marriage. He proposed adopting the definition suggested by Mr Costa whilst including a degree of permanency.

Adv De Lange asked what the Committee would do with the definition of 'partner'. He wanted to know which provisions made reference to 'partner'.

Mr Nel responded that Clause 6 made such a reference.

Adv De Lange wondered Clasue 19 would be another possibility.

Mr Nel added that the word 'partner' could be found in the definition of 'relative'.

Mr Jefferey wanted to know where the word 'relative' was used in the Bill.

Adv De Lange had thought that it would have been included in Clause 19. However, this was not the case.

Mr Nel responded that 'relative' was used in the presumptions.

Adv De Lange wondered whether it had not been removed.

Mr Nel responded negatively. He added that Clause 13 (3) made reference to a relative.

Adv De Lange stated that the Committee would have to look into and discuss this matter. He was not comfortable with the idea of tainting persons by virtue of the fact that they are relatives. It would not be correct to infuse criminality into relatives as this could be achieved through direct links. The creation of short-cuts for the state in this manner would be both morally and legally wrong.

Mr Jefferey suggested that there were probably many definitions of a partner or a spouse, thereby diminishing the need to reinvent a definition.

Mr Nel agreed. He stated that many laws did refer to such definitions that he could import a definition into this Act.

Adv De Lange added that the problem was that the definition in subparagraph (ix) was too vague. This meant that the Committee would use the definition proposed by Mr Costa without any reference to a marriage. He directed Mr Nel to act as Mr Jeffery had suggested.

Mr Jeffery felt that it would be useful to see the SALC Report in this regard. He further imagined that one of the problems with the old Act related to the definition of corruption. He added that it would also be helpful to receive an idea of the practical problems caused by the existing Act from persons such as prosecutors in order to have a better idea.

Mr Nel explained that the Explanatory Memo in paragraph 1.2 gave background to the views of the Attorney General. He stated that the main problem with the Act was the fact that it did not cover certain officials.

Mr Jeffery felt that what the said paragraph did was widen the ambit without really pointing to the problem of the definition. He wanted to know whether there was a problem with the 1992 definition.

Mr Nel stated that no complaints had been received in relation to the definition of 'corruptly'.

Adv De Lange added that Nigeria also made reference to the word 'corruptly'. He called for the definition they relied on to be brought forth.

Mr Nel responded that Nigeria defined only corruption. He added that there were many other countries that followed the same practice.

Adv De Lange stated that the effect would be to leave the matter to the interpretation of the courts.

Mr Nel explained that this had resulted in problems for the courts. He stated that the SALC had found the same problem. Adv De Lange agreed.

Mr Magwanishe stated that a step brother and a step sister would also have to be included in the definition of a relative. Mr Nel agreed.

Adv De Lange directed Mr Nel to make the necessary amendments.

Mr Jeffery explained that the list of relatives would be endless, and gave the example of grandparents. Thus he wondered whether the provision was necessary at all.

Adv De Lange added that on the second reading of Clause 13, he was not happy with the provision. Persons would become guilty of a crime by the mere fact that they are relatives.

Mr Jeffery referred back to a statement by Ms Camerer and wondered whether the Committee should include a section on nepotism, thereby limiting the inclusions to the provision.

Ms Camerer added that a bad case of nepotism had recently been seen in Mpumalanga.

Adv De Lange did not know how they could criminalize nepotism. He suggested investigating the matter. Nevertheless, he felt that the issue of the definition of 'relative' would have to be put on hold and discussed when dealing with Clause 13.

Mr Mzizi said that he understood nepotism to relate to close relations. As such, he wanted to know how girlfriends would be dealt with.

Adv De Lange responded that Mr Nel would look to other jurisdictions for a solution. He wondered whether nepotism was even a crime.

Mr Jefferey stated that one would have to distinguish between immoral and unlawful conduct.

Adv De Lange pointed out that a certain submission contained the proposal to remove gambling from a sporting event.

Mr Nel explained that there would now be a distinction between gambling games and games of chance.

Adv De Lange suggested the possibility of dealing with the reference to sporting events as per the Costa submission in another manner. He asked for comments about gaming.

Mr Mzizi responded that there would be further debate when dealing with the issue.

Clause 2 Interpretation
Adv De Lange stated that there were no proposed changes to Clause 2. He noted that the usual definition had been adopted.

Mr Nel explained that the definition had been taken from the Prevention of Organised Crime Act.

Adv De Lange was satisfied. He directed Mr Nel to begin adding some of the amendments by working in the changes that he felt should definitely be made. He also called for alternatives where amendments would be rejected.

Clause 3 Offence of corruptly accepting gratification
Mr Nel explained that Clause 16 included additional offences. As such, he sought to retain the provision. He pointed out that the aim would be to ensure that provisions do not become cluttered.

Adv De Lange accepted that position. He suggested working on placing the word 'offence' at the end of the phrases in 3(4)(a).

Adv De Lange wanted to know why Clause 3 (3) existed.

Mr Nel could not understand why. He wondered why a presumption had been included.

Adv De Lange asked why the presumption had been created.

Mr Nel replied that other countries dealt with the provision in the same manner.

Adv De Lange wanted to know which presumption had been created.

Mr Nel explained that the presumption would apply when the relevant circumstances have been satisfied. He made reference to the requirement of Clause 3 (3) (a).

Adv De Lange was happy that unlike Clause 13, this section did not include all relatives! He added that the difficulty with presumptions lay in their width and meaning. This meant that one would have to establish the evidential burden removed from the state. In this case, it seemed to be mens rea. There were many issues that he would have to think through in relation to this Bill. He pointed out that:
- Clause 3 (1) is an open-ended crime.
- The presumptions would link the crime only to certain factors.

Mr Nel said that although the presumptions sought to narrow the ambit, it remained relatively wide.

Adv De Lange wanted to know what the 'or ……..anything whatsoever' referred to.

Mr Nel referred to holding or seeking to obtain 'anything whatsoever'.

Adv De Lange could not understand what this meant. He had great difficulty with the presumption. He asked whether each clause had a presumption.

Mr Nel responded that presumptions would not apply to all clauses.

Ms Camerer wondered whether the presumptions would survive constitutional challenge.

Adv De Lange replied that they should pass challenge because they are worded along the lines of the Manamela case.

Adv De Lange wondered whether there was a simpler way of dealing with subclauses (a), (b) and (c). He suggested that reference to subclause (b) would make reference to subclause (a) unnecessary. He directed Mr Nel to think over the matter.

The discussion on this Bill would be continued on Monday 19 August 2002 for the entire day. The meeting was adjourned.