Prevention of Corrupt Activities Bill: deliberations

Meeting report

JUSTICE AND CONSTITUTIONAL DEVELOPMENT PORTFOLIO COMMITTEE
15 October 2003
PREVENTION OF CORRUPT ACTIVITIES BILL: DELIBERATIONS

Chairperson: Adv J de Lange (ANC)

Relevant documents
Prevention of Corrupt Activities Bill Working Document - No 7 (October 2003)
[for document with footnotes included, email [email protected]]
Prevention of Corrupt Activities Bill Working Document No.5 (May 2003)

SUMMARY
The Committee went through the latest Working Draft of the Bill to ensure that its proposed amendments had been incorporated correctly in the clauses dealing with the offences and definitions.

Members sought clarity on the general offence of corruption in Clause 3, as well as on the inclusion of the word "inducement" in the clause. The Committee considered the difference between Clauses 3 and 4, and whether Clause 4 also applied to public bodies. Clause 29's term "unauthorised consideration" will be inserted in Clause 3 so that Clause 29 can be deleted.

There was concern with the handling of the conflation of the accepting and giving components in the offence in Clause 11. The drafter will redraft the provision in line with the previous formulation contained in the former Clause 13. The Committee clarified the person to whom the gratification would be given in Clause 12, and considered the inclusion of the word "inducement" in the clause. Members decided to temporarily retain the word "improperly" in Clauses 11-15, until the formulation was clarified. The Committee also considered the definitions of "agent", "animal" and "scheme in commerce" in Clause 1.

MINUTES
Prevention of Corruption Bill
Adv Gerhard Nel, Deputy Director of Public Prosecutions, continued to take the Committee through the latest working draft of the Bill. He indicated what changes had been made since the Committee last deliberated on the Bill in August.

Chapter 2: Offences in respect of corrupt activities
The Chair pointed out that it was normally the first option which would be favoured.

Part 1: General offence of corruption
Clause 3: General offence of corruption
Adv Nel noted that the phrase "including a person in the private sector" had been added. This was done because there had been a separate clause for those in the private sector and to avoid duplication this had now been inserted into this clause. The title of the clause would have to be examined again.

Mr J Jeffery (ANC) said that the clause stated "person" and wanted to know what happened if an organisation benefited.

The Chair said that the definition of person included a juristic person.

Mr Jeffery said that if this was the case, it was not necessary to include the phrase " including a person in the private sector".

The Chair said that most of what was dealt with was crimes in the public sector and it was felt that the private sector should be included. He highlighted the definition of "gratification" in the Bill. He felt that it was very inclusive. He asked Adv Nel to replace the word "inducement" in this clause with "assist, persuade, encourage, coerce, intimidate or cause". In 3(a) the word "honest" was used. It was therefore open for the court to interpret this.

Mr Jeffery said that he felt 3(a) was covered by 3(c)(i).

The Chair suggested that "dishonest" be removed from 3(c)(i) so that there was no repetition.

Mr Jeffery added that he was concerned about the repetition of the word "performance" in the two subclauses.

The Chair said that "performance" had to be there as in law one exercised a power and performed a duty or function.

Ms F Chohan-Kota (ANC) said that she also had a problem with 3(a) as she thought this was an over-arching clause that covered all of the aspects covered in 3(c)(i). The only difference seemed to be the fact that 3(c)(i) referred to "any person" as opposed to "a person". She felt that the broadness of 3(a) was nullified by this clause.

The Chair said that he did not feel that 3(a) was that broad. He suggested that 3(c)(i) be fused with 3(a).

Adv Nel agreed to this.

Ms Chohan-Kota said that "illegal, dishonest, incomplete or biased exercise" in 3(c)(i) did not include a contrived situation, for example match-fixing in cricket.

The Chair suggested that Adv Nel look into this possibility and also clearly state that it was the "exercise of power and performance of a duty or function". He added that there was some overlap in this clause but that this was the clause which dealt with the general offence of corruption so it should cover a number of aspects.

Ms Chohan-Kota was concerned that there was no provision for the occurrence where an agent was used to bribe someone.

The Chair pointed out that Clause 5 dealt with this specifically. Option 2 in Cause 3 was the same as Option 1 except that it used the word "corruptly". In looking at the definitions of "corruptly" in Clause 1 the Chair pointed out that Option 1 of the proposed definition was the favoured one as it would include those in the private sector. He suggested however that the phrase "the abuse of a position of authority", contained in Option 2, be included in the 3(a) of Option 1 to make it more inclusive. Option 2 would then fall away completely.

Part 2: Offences in respect of corrupt activities relating to specific persons
Clause 4: Offences in respect of corrupt activities relating to specific persons
The Chair went on to say that he preferred the way this clause was drafted with separate subclauses 1(a) and (b). He requested Adv Nel to do the same for the other clauses as well. He felt that it made it clear that there were two offences.

Mr Jeffrey wanted to know the difference between this clause and the previous Clause 3.

The Chair replied that the subclause 2 here defined the term "to act" further.

Ms Chohan-Kota (ANC) said that Clause 4 dealt with a public officer who was acting in the line of a public authority. It would therefore be necessary to show that the benefit was not only for the individual but also for the public body.

The Chair asked for an example of this.

Ms Chohan-Kota said that a parastatal for example could bribe a department official so that it would benefit from some process.

The Chair pointed out that "benefit of another person" in 4(1)(b) would include a public body.

Ms Chohan-Kota said that she was of the opinion that this excluded public bodies and pointed out footnote 30, which stated: 30. The opinion is held that the underlined words "including a person in the private sector" are superfluous. The words "any person" already indicates that it includes any person in the public as well as the private sector. If the Committee decides to insert the underlined words, one should consider including a definition of "private sector". This definition will include all persons or entities in South Africa, including individuals, partnerships, associations, corporations, and educational and non-profit institutions, but shall not include public bodies.

The Chair said that this was only applicable to the definition of private sector which did not include public bodies.

Ms Chohan-Kota said that if Clauses 3 and 4 were the same except that Clause 3 was for a general offence and Clause 4 for a public official, she did not see why it had to be separate.

The Chair suggested that the definitions of "public officer" and "public body" be examined.

Mr Jeffery wanted to know what would happen to a members of the executive authority in municipalities as they were part of the legislature as well.

The Chair pointed out that if they were in administration, they would be regarded as a public officer.

Ms S Camerer (DA) wanted to know if someone was a member of the executive and they were carrying out certain functions as head of a department, where would they fit in, as legislature or executive?

Adv Nel said that they would be regarded as public servants.

Mr Jeffery said that local government officials, such as councillors, had to be catered for as many of them had roles in the legislature and the executive.

The Chair said that what was needed was for Adv Nel to provide a clear definition of what a public servant was. It would also be necessary to ensure that "legislative authority" included municipal councils.

There was much discussion over what 'legislative' meant. The Chair said that it should be checked against the Constitution. If it was not spelt out there, it would be made clear in the definitions section that it included national and provincial legislatures and municipal councils.

Chapter 6: Miscellaneous matters
Clause 29: Reinstatement of common law crime of bribery
The Chair said that 29(1) reinstated law but that he had asked the Department to put more in. He had wanted the definition of bribery included. Adv Nel had thus inserted 29(2). The difference between the two options was that in Option 1, the private sector was included. The key was that the term "unauthorised consideration" was inserted as well. This covered all aspects of bribery. One could either do it the way it was drafted or create a whole new clause which would cover bribery.

Ms Camerer said that Option 1 had "employee" while Option 2 had "a person". Her concern was that sometimes deals were done, for example by merchant bankers who were not employees as such.

The Chair that if that was the case one of the other clauses could be used.

Adv Nel said that he had drafted the clause in this way because he did not want to stop the courts from developing the crime of bribery. The crime of bribery, as it was before 1992, should be the position. He therefore preferred Option 2. It was also not necessary to define the crime of bribery if it was done in this way.

Ms Chohan-Kota did not see the necessity of this clause which was narrow and which came from common law.

The Chair said that this narrowness was an advantage as well. If it was not clear from Clauses 1 to 4, the clause on bribery could be used.

Adv Nel said that without Clause 29, the courts would be responsible for interpreting the law which could cause problems.

Ms Chohan-Kota felt that since there was a new Constitution which allows international law to be used, common law should not be used, but the latest trends in international law should be followed.

The Chair suggested that one way of doing it would be to include the aspect of "unauthorised consideration" in Clause 3(e) or in Clause 3(c)(i). Thus Clause 29 would not be needed at all.

Chapter 2: Offences in terms of corrupt activities
Part 2: Offences in respect of corrupt activities relating to specific persons
Clause 6: Offences iro corrupt activities relating to members of legislative authority
Mr Jeffery said that the clause did not cover the case where the legislative authority elected or nominated individuals for positions outside of Parliament, for example, the Public Protector.

The Chair then asked Adv Nel to include this under 6(3). He also suggested that 6(2)(a) and (b) might be fused to make it simpler.

Clause 7: Offences iro corrupt activities relating to members of judicial authority
The Chair felt that "damaging the independence of the judiciary" in 7(1)(b)(iii)(ee) was not fitting. He suggested "impairing the independence of the judiciary" and it should become 7(2)(c). He also suggested that the adjectives used in 7(2) be removed.

Clause 8: Offences iro corrupt activities relating to members of prosecuting authority
The definition of judicial officer in Clause 8 was deemed not clear although it was supposed to refer only to magistrates and judges. The Chair requested Adv Nel to examine this.

Clause 9: Corruption of judicial proceedings
The Chair stated that the words "improperly coerces or persuades" in 9(2) should cover incidences where someone is given information about a witness in a case. The unlawfulness in this clause was not clear.

Adv Nel said that it was in the phrase "accept in return for".

The Chair disagreed and said this was the act and not the unlawfulness. The previous acts dealt with persons whereas this clause dealt with proceedings - therefore it did not seem necessary to include the unlawfulness.

Adv Nel said that the unlawfulness was dealt with in the clause.

After much consideration, the Chair concurred with Adv Nel.

Afternoon session
Chapter 2: Offences in respect of Corrupt Activities
Clause 10: Offences iro corrupt activities relating to foreign public officials
The Chair stated that the references to "improper" in 10(2) must be deleted. The unlawfulness of the actions were not being discussed in the clause, only the acts committed. The unlawfulness was provided in 10(1)(a)-(e).

Part 2: Prohibition in respect of corrupt activities relating to specific matters
Clause 11: Offences iro corrupt activities relating to procuring and withdrawal of tenders
The Chair stated that this clause would have to be worded differently, similar to the previous draft of the Bill. He noted that the earlier wording of the provision had been reverted to.

Adv Nel explained that this was necessary because the provision did not include the words "act", "acting" or "having acted" as it would be difficult to include those references in 11(a), because it dealt with specific matters. It dealt firstly with the inducement and, secondly, with the reward for having acted in terms of that inducement. He stated that this subclause was not intended to spell out the requirements for the commission of the corrupt act.

The Chair stated that he was concerned by the use of "inducement" in this clause.

Adv Nel proposed that the term "influenced" be used instead.

The Chair proposed that the wording of the former Clause 13(a)(i)(bb) in May 2003 draft of the Bill be included here. The problem was that the giving and accepting of an inducement has been conflated. The old Clause 13(d) has also been omitted from the new formulation. The giving and accepting components that dealt with the withdrawal of a tender in Clause 11(b) of the Bill has been mixed up completely, and did not reflect the wording in the previous Clause 13. This clause would have to be reformulated.

Clause 12: Offences in respect of corrupt activities relating to auctions
The Chair asked whether the word "improperly" should be included 12(1)(a) as well, as was the case in 12(1)(b).

Adv Nel answered in the negative. He stated that the phrase "so as to favour or prejudice a specific person" in 12(1)(a) covered the "improper" requirement.

The Chair stated that it must be spelt out in 12(2)(a) from whom the gratification offered would be accepted, as this was spelt out in 12(2)(b) and (c) as well.

Adv Nel responded that it would be accepted "from any other person".

The Chair stated that this must be stipulated in the provision, and in 12(1)(a) as well. He stated that the phrase "or an auctioneer" also had to be included in 12(2)(a).

Adv Nel replied that the phrase "from any other person" would then also have to be inserted in all the previous provisions that dealt with offences, because they did not include this phrase.

The Chair agreed.

Mr Jeffery (ANC) asked if it had been a crime previously to conclude an agreement with an auctioneer or bidder to auction off the item at a far lower price. He stated that he did not have a problem with this practice.

The Chair replied that this should not be done at an auction because auctions were aimed at making as much money on the item as possible. That type of agreement would undermine the rules and regulations that related to auctions in the Auction Act. It would probably not have been a specific crime before, but would have been classified more generally as a fraudulent act.

Mr Jeffery asked if it was classified as a crime in any of the comparative legislation considered.

Adv Nel replied this was the case and that the Committee had worked through all the possible scenarios that could occur at an auction. All the scenarios have been included in the clause.

The Chair stated that he was concerned with the current format of the provisions that dealt with the specific offences. They retained the two essential "induce" and "reward" components, but the definitions of these have since been removed from the Bill. Would there not be any possible problems with the interpretations of the offences as a result of this deletion? He asked the drafter if those definitions should be re-introduced.

Adv Nel replied that he did try to include the "acting in a manner" phrase in the provision. It would not really be appropriate though because the provisions dealt with specific offences. "Reward" here must not be seen as the "gratification" in the definitions clause, because it was instead done after the fact. The May 2003 Working Draft did not even include a definition of the term "reward", but the Department had considered the inclusion of a definition which read "to act or for having acted".

The Chair stated that the use of the term "inducement" in the clause was much broader than the definition that was contained in the May 2003 Working Draft.

Ms F Chohan-Kota (ANC) suggested that the word "inducement" could be omitted from this clause, because it was merely a turn of phrase in that particular instance and did not carry any significant meaning.

The Chair agreed, and stated that the words "inducement" and "improperly" have to be removed from the clause.

Adv Nel noted that the current wording of the clause reflected the formulation used by the comparative legislation consulted.

The Chair asked Adv Nel to explain the origin of 12(1)(b)(i)(bb).

Adv Nel replied that he had discussed all the possible scenarios with a director of ABSA Bank who dealt with auctions, and he indicated that so much corruption took place at auctions because there were various ways in which this could be perpetrated. He stated that 12(1)(b)(i)(bb) thus included those means outlined by that person consulted.

The Chair said that the term "improper" must be deleted, and "inducement" could be retained for the time being. He requested Adv Nel to check whether the comparative legislation included definitions of the terms "inducement" and "reward".

Clause 13: Offences in respect of corrupt activities relating to contracts
The Chair requested that the bracketed word "improperly" in 13(a) be retained

Clause 14: Offences in respect of corrupt activities relating to sporting events
Mr Jeffery questioned the need for the inclusion of the word "improperly" here as it could be unduly harsh, as evidenced in the following example: the manufacturer of a completely legal sports tonic, which improved the performance of athletes, agreed to pay the athletes if they used it during the sporting event. Mr Jeffery stated that this conduct would not be considered improper.

The Chair stated that the word "improperly" must be retained, but the phrase "and knowingly" at the beginning of the clause must be deleted.

Clause 15: Offences iro corrupt activities relating to gambling games or games of chance
The Chair stated that the bracketed word "improperly" must be retained here as well.

Chapter 1: Definitions and Interpretations
Clause 1: Definitions
"agent"
The Chair noted that the Committee had not yet considered this definition. He requested that the phrase "who is authorised to act on behalf of his or her principal" be inserted after "representative" in Option 1 of the definition. The Chair stated that Option 2 seemed fine.

"animal"
Mr Jeffery said that he remembered the proper terminology to be "phylum cordata subphylum vertebrata", and not simply "phylum vertebrates" as currently contained in the definition.

Adv Nel replied that the current definition reflected the wording used in the Animal Health Act of 2002.

The Chair requested Adv Nel and Mr Jeffery to resolve this issue.

"principal"
The Chair stated that this definition would probably not be needed if Option 2 under the definition of the term "agent" were to be adopted, because they all referred to things already covered in that option.

"scheme in commerce"
The Chair sought clarity on the purpose of the phrase "any facility for transportation".

Adv Nel responded that this definition was taken from the United States legislation, which used this definition in a sporting context as well.

The Chair requested Adv Nel to consult Mr Costa, Chairperson of the Jockey Club of South Africa, on this matter as he had addressed this issue in his submission on the Bill. He noted that the Committee had not yet considered the definitions of the terms "associate", "business", "dealing", "listed company" and "property".

The meeting was adjourned.