Prevention of Corrupt Activities Bill: deliberations

Meeting report

JUSTICE AND CONSTITUTIONAL DEVELOPMENT PORTFOLIO COMMITTEE
18 November 2003
PREVENTION OF CORRUPT ACTIVITIES BILL: DELIBERATIONS

Chairperson: Adv J H de Lange (ANC)

Relevant documents:
Prevention of Corrupt Activities Bill (Working Document No. 8)
Prevention of Corrupt Activities Bill [B19-2002]
Letter from the Minister of Public Services and Administration on UN Convention Against Corruption
Letter from the Banking Council of South Africa on the Prevention of Corruption Bill
UN Convention against Corruption (www.odccp.org/odccp/crime_cicp_convention_corruption_docs.html)

Addendum:
Letter from the PC Social Development Inviting the Committee to a Debate on Children’s Bill

SUMMARY
The Committee went through the Bill, clause by clause, and thus effected a few technical amendments. It would pass the Bill on Monday, 24 November 2004, and thereafter table it in the House on 27 November 2003.

MINUTES
Long Title
The Chair noted that they would have to reconsider the relevance of the word “corruption” in the first sentence.

Preamble
Adv M Masutha (ANC) noted that the word “fulfil” in the second paragraph should be replaced by the word “fulfils”. The first two paragraphs clearly captured the principles enshrined in the SA Constitution. He therefore proposed that such principles should be carried into the third paragraph in a systematic way. He said that “undermine the said rights and” be inserted after “corrupt activities” and before “endanger”.

The Chair noted that the word “bribery” in the sixth paragraph had been deleted since it was irrelevant and took into account that it had been removed altogether from this Bill.

Adv G Nel (Department of Justice: Legal Drafter) noted that the insertion of “on 14 August 2001 in Malawi” in the seventh paragraph, indicated the date and the place where the SADC Protocol Against Corruption was adopted by South Africa as a member state.

The Chair proposed that the Department incorporate the provisions of the UN Convention against Corruption, which had been adopted by South Africa and which would be signed by the Minister of Public Services and Administration, Ms G Fraser-Moleketi, on the Ministerial Signing Conference on 9-11 December 2003 in Merida, Mexico.

Chapter 1: Definitions and Interpretation
Clause 1: Definitions
(i) Agent
The Chair asked which of the two options the Department preferred.

Adv Nel said they preferred the first option since it was short, precise and in line with the requirements of an agent-principal relationship as found in US legislation. The Committee accepted the proposition.

(ii) Animal
Adv Nel preferred the alternative definition since it was in line with definition relating to cruelty against animals in US legislation. The Committee also accepted this alternative definition.

(iii) Business
The Chair said that it should be borne in mind that this was a very widely used definition in the Bill.

Ms S Camerer (DA) said it should be made very clear whether “and includes all property derived from…and all the rights and liabilities arising from such activity” related to the first part of the definition that included “any business, trade…or undertaking of any kind”, or to the second part that included “any other activity carried on for gain or profit.

Adv Nel said that the words related to the second part and thus proposed that “other” be inserted after “such” in both occasions.

(iv) Dealing
The Chair noted that since the word “agency” formed part of the definition of “dealing”, it was imperative that they find out whether the former had the same corresponding meaning as “agent” and if so, to indicate that clearly.

(x) Inducement
The Chair said that it was not necessary to repeat “to do or not to do anything” in relevant clauses because this was inherent in the definition itself. He thought the current definition of inducement was not relevant at all to the provisions of Clause 11.

However Adv Nel thought that the words “to do or not to do anything” should be deleted from the definition of inducement and only be retained in the relevant clauses dealing with the offence. In this way, the definition would also accord with the provisions of Clause 11.

(xi) Judicial Officer
The Chair asked the Department to check the relevance of paragraph (b) since International Criminal Court judges did not fall within South Africa’s jurisdiction. He asked the Department to verify whether the Land Claims Court judges were now judges of a particular division of the High Court. He thought the provisions of paragraph (l) were very wide and vague and thus asked the Department to re-examine them.

Adv Nel said that this paragraph was in line with the provisions of the Act dealing with mediation since it required that parties to the mediation proceedings should have specifically agreed to submit their dispute to a mediator.

The Chair then said that the Act dealing with mediation proceedings should be specifically mentioned in the paragraph as it was done with the Act relating to paragraph (m). At present, it was not clear what kind of mediation was referred to in this paragraph. He thereafter raised concern with the use of “and” joining the requirements of paragraph (n). The seemed to limit a Commission only to those instance where a judge was a presiding officer. He thus asked the Department to find out whether a Commissioner performing his/her functions did so in a judicial capacity.

Ms Camerer concurred and noted that the paragraph was narrowly drafted and limiting.

Adv Nel noted that this definition only related to Clause 7 and therefore if something was not covered in its provisions, then it would definitely be covered by the general corruption clause. He noted that in paragraph (q), the reference to paragraph (o) was substituted by paragraph (p).

The Chair proposed that paragraph (p) be inserted before paragraphs (n) and (o), since the latter paragraphs were catch-all phrases.

(xvii) Private sector
Adv Nel reported that “and” in the second paragraphs (c) and (d) would be substituted by “or”.

(xxi) Public officer
Adv Nel said that the word “or” would be inserted at the end of the first paragraph (b).

Clause 2: Interpretation
Adv Nel said that the word “and” in Subclause (3)(a)(ii) would be substituted by the word “or” and the latter would also be inserted at the end of Subclause (3)(b)(ii).

The Chair proposed that the words “and the converse was equally true” be inserted after Subparagraph (iii) of Subclause (4)(a). It should be made clear in both paragraphs (a) and (b), that tense was irrelevant and these provisions also applied in the case of an omission. After the proposed changes to the above paragraphs, the provision in paragraph (c) would become unnecessary and so should be deleted.

Chapter 2: Offences in respect of corrupt activities
Part 1: General offence of corruption
Clause 3: General offence of corruption
The Chair proposed that the word “or” be inserted at the end of paragraph (b)(i)(aa) and that the word “contrived” be deleted. He thought the provisions of paragraph (b)(i) should be restricted as they were very widely formulated and could thus be interpreted to include every relation instead of only those of a statutory or contractual nature.

Adv Nel noted that the Department would look at this possible interpretation for paragraph (b)(i).

Part 2: Offences in respect of corrupt activities relating to specific persons
Clause 4: Offences in respect of corrupt activities relating to public officers
Adv Nel noted that there were similar corrupt activities committed by public officers in other jurisdictions which, among others, included Nigeria, Malaysia, Singapore, Hong Kong, Canada, Western Australia and Lesotho.

The Chair reminded the Department to take out the word “contrived” in Subclause (1)(b)(i)(aa).

Clause 5: Offences in respect of corrupt activities relating to agents.
Adv Nel noted that there were similar offences in respect of corrupt activities committed by agents in other jurisdictions, such as those countries mentioned above.

The Chair reminded the Department to take out the word “contrived” in paragraph (b)(ii)(aa)(aaa).

Clause 6: Offences in respect of corrupt activities relating to members of legislative authority
Adv Nel noted that there were similar offences in respect of corrupt activities committed by members of legislative authority in other jurisdictions which, among others, included Australia. The provisions of Subclause (3) were borrowed from the Canadian Criminal Code. They were inserted in order to guard against those companies, associations and unions that gave moneys to political parties to get government contracts should those political parties be in government.

The Chair reminded the Department to take out the word “contrived” in Subclause (1)(b)(i)(aa) and further proposed that the word “influencing” in Subclause (3)(b) be substituted with the word “influence”.

Clause 7: Offences in respect of corrupt activities relating to members of judicial authority
The Chair reminded the Department to take out the word “contrived” in Subclause (1)(b)(i)(aa) and further proposed that the words “members of judicial authority” in the heading be substituted by the words “judicial officers”.

Adv Nel read out a new proposed Subclause (2) and noted that this was a preferred formulation. The Committee accepted the new provision.

Clause 8: Offences in respect of corrupt activities relating to members of prosecuting authority
The Chair reminded the Department to take out the word “contrived” in Subclause (1)(b)(i)(aa).

Adv Nel read to the Committee a new proposed Subclause (2) and noted that this was a preferred formulation of this provision. The Committee accepted the new provision.

Clause 9: Offences in respect of corrupt activities relating to foreign public officials
Adv Nel noted that this clause emanated from the provisions of the ‘Convention on Combating Bribery of Foreign Public Officials in International Business Transactions’ adopted by South Africa at the OECD on 21 November 1997.

The Chair reminded the Department to take out the word “contrived” in Subclause (1)(i)(aa).

Part 3: Offences in respect of corrupt activities relating to specific matters
Clause 10: Offences in respect of corrupt…and evidential material during certain proceedings
Adv Nel noted that there were similar offences in other jurisdictions including Australia and the USA.

Ms Camerer thought that “untruthful manner” in Subclause (1)(a) was too wide since it could result in someone testifying in a lawful manner and thus bona fide, being found guilty of having committed this offence. She proposed this offence be limited only to those cases where a person acted deliberately or in a mala fide manner.

The Chair objected to the proposal. He quoted the decision of the US Appellate Division where the court held that “Payment to a witness to testify in a particular way, payment of money to prevent a witness’s attendance at trial and the payment to make him sympathetic are all payments which are absolute indefensible. It therefore follows that the payment of a sum of money to a witness to ‘tell the truth’ was as clearly subversive of the proper administration of justice as to pay him to testify to what was not true.” He therefore did not believe that a payment of money in return for testifying in an untruthful manner could be less subversive than those mentioned in that judgement. He further proposed that the offence noted in paragraph (a) of Subclause (2) should be removed, and thereafter created as a new separate offence under Part 4 dealing with miscellaneous offences.

Clause 11: Offences in respect of corrupt activities…to procuring and withdrawal of tenders
Adv Nel noted that there were similar offences in other jurisdictions including Malaysia, Singapore, Hong Kong, Canada, Lesotho and Kenya.

The Chair noted that the word “or” should be inserted at the end of Subclause (1)(a)(i) and (iii) and also Subclause (2)(a)(ii). Since the offence noted in Subclause (2) could also be committed by legal persons and thus not only by natural person, the Department should then consider the insertion of “its” after “his or her” in paragraph (b).

Adv Nel noted that since the provisions of Subclause (3) were already covered by the provisions of S2 of the Insider Trading Act, the Department felt that it would not necessary to have the provision repeated in this Bill. The Committee concurred.

Clause 12: Offences in respect of corrupt activities relating to auctions
Adv Nel noted that there were similar offences in other jurisdictions including Nigeria, Hong Kong, Lesotho and Kenya. The word “or” in Subclause (2)(b) after “benefit” would be removed and reinserted after the word “auctioneer” as its insertion was a technical error on their part.

Ms Camerer proposed that the words “refrain and participate” in Subclause (2)(a)(i) and (c)(i) should be substituted with the words “refraining and participating”.

Clause 13: Offences in respect of corrupt activities relating to contracts
Adv Nel noted that there were similar offences in other jurisdictions including Nigeria, Singapore, Hong Kong, Canada, Lesotho and Kenya. The provisions of Subclauses (2) and (3) had been moved and now constituted the new Clause 16.

Clause 14: Offences in respect of corrupt activities relating to sporting events
Adv Nel noted that the word “or” would be inserted at the end of paragraph (b)(i)(aa), while a singular would be used in the last sentence declaring an offender that  “was guilty of the offence of corrupt activities relating to a sporting event” and thus inserting “a” while removing “s” in “events”.

Part 4: Miscellaneous offences relating to unacceptable behaviour
Adv Nel said “behaviour” would be substituted by “conduct”.

Clause 16: Offences in…private interest in contract, agreement or investment of public body
The Chair noted that the words “in respect of corrupt activities” and “the” in the heading to this clause should be deleted.

Part 5: Other offences relating to corrupt activities
Clause 18: Accessory to or after an offence
Adv Nel noted that there were similar offences in other jurisdictions including Nigeria and Malaysia.

Ms Camerer however thought the heading should read “Accessory to an offence”, so that “after” was removed.

Adv Nel noted that a person could either be an accessory to a crime in S132(5)(d) of Act 44 of 1957 or after the crime had been committed, S257 of the CPA. Thus it was necessary that both “to and after” be included in the heading of this clause.

The Chair said that the discussion on this matter would be deferred so the Department could consider the issue.

Clause 19: Attempts, conspiracy and inducing another person to commit offence
Adv Nel noted that the word “or” would be inserted at the end of paragraph (b).

Clause 19A: Acceptance or giving of unauthorised gratification
The Chair noted that the heading to this clause should be change to read “offences in respect of corrupt activities relating to employees receiving or offering unauthorised gratification“. The clause should be removed and reinserted in Part 3, which dealt with specific matters. He further proposed that the words “was guilty of the offence of corrupt activities relating to employees receiving or offering unauthorised gratification” be inserted after “duties or functions” at the end of Subclause (1).

Adv Nel accepted the proposal and noted that the clause would then clearly capture all the elements of bribery in a broader sense. As the words “unauthorised gratification” were precedents, those applicable to the offence of bribery, would also become applicable in this clause.

Adv Masutha asked whether the Bill provided a definition for “employer” or was that was deduced from the definition of “employee” provided in Subclause (2).

The Chair said that since an employer - as an employer - was not part to any crime under this Bill, it was therefore unnecessary to provide its definition in the Bill. However, any person could be held liable under this Bill in terms of the provisions of the general offence of corruption in Clause 3. Nevertheless, he proposed that the definition be changed to “any person who was party to an employment relationship includes any person who in any manner assists in carrying on or conducting the business of an employer”. He proposed that this definition be removed in Subclause (2) and be reinserted in the definitions in Clause 1.

Chapter 3: Investigations…possession of property relating to corrupt activities
Clause 21: Application for…a person’s present or past known sources of income or assets
Adv Nel noted that the definition of a “National Director” referred to in Subclause (1) would be provided in the definition clause. Furthermore, the word “and” in Subclause (6) after “relating to the conducting of”, would be substituted by “an” as the former was inserted in error.

Chapter 4: Presumptions and defences
Clause 22: Presumption
The Chair proposed that the words “an offence contemplated in Part 1, 2 or 3” in Subclause (1) be substituted by “the aforementioned offences”. He further asked that Subclause (1)(b)(iii) be clearly rewritten as it was currently difficult to understand. 

Adv Nel noted that a comma would be inserted after “in subparagraph (i) or (ii) and” and before the words “if the State can further show” in Subclause (1)(b)(iii).

Chapter 5: Penalties and related matters
Clause 24: Penalties
Adv Nel noted that the amount in Subclause (1)(c) was supposed to be R250 000 and printed amount had been inserted in error. The sequence of the Clauses had also changed and would be amended. The clause referred to in Subclause (1)(b) as Clause (16)(2) would now have to be changed to become Clause 16(1).

The Chair proposed that “ten years” in Subclause (1)(b)(i) be substituted by “five years” and this paragraph be made applicable to both Clause 21(7)(a) and (b). The term “one year” in Subclause (1)(c) should be substituted with “three years” and this paragraph should also apply to Clause 17, while the latter should be removed from the provisions of paragraph (b).

Clause 25: Authorisation by National…to institute proceedings in respect of certain offences
The Chair reminded the Department to change the Clause 16(2) to Clause 16(1) and further proposed that the authorisation had to be made in writing.

Clause 26: Endorsement of Register
The Chair proposed that the words “or suspected” be inserted after the words “ought reasonably to have known” in Subclause (1)(c)(ii)(bb) and “or” after the word “so convicted” in Subclause (1)(d) while the second “so” before “ endorsed” should be removed. He further proposed that the word “or” be inserted at the end of Subclauses (3)(a)(i), (ii)(aa) and 7(c).

Adv Nel noted that “the” would be inserted before “National Treasury” in Subclause (3)(a)(i) and (ii). He would prefer the word “executed” to be employed instead of “concluded” in Subclause (3)(a)(i)(aa)(ccc). 

Mr L Landers (ANC) asked whether a person’s name, once endorsed in the Register, would be removed automatically after the endorsement period, or whether s/he would be required to taken certain steps to ensure its removal.

Adv Nel responded that the National Treasury would be responsible for determining the period, and after the expiry, automatically remove that person’s name from the Register.

Mr Landers said it tended to be difficult for those blacklisted by the Credit Bureau to have their name removed from the system. He therefore felt it necessary that a provision be created directing the National Treasury to remove a name from the Register once the period of endorsement expired. The Chair agreed.

Chapter 7: Miscellaneous matters
Clause 32: Duty to report corrupt transactions
The Chair noted that it should be made clear that a duty to report rested with everyone suspecting a crime to be committed by a person holding a position of authority or where a crime committed involved over R200 000. He further noted that the definition of a person holding a position of authority in Subclause (4) was too wide. He thus asked the Department to make it clear that it related only to persons in senior management levels (SMS) in the civil sector and including directors of companies.

Adv Nel noted that the Department would also provide a definition of a National Commissioner contemplated in Subclause (3).

Clause 33: Extraterritorial jurisdiction
The Chair proposed that the provisions of paragraph (a) in Subclause (2) be reshuffled to create a catch-all provision, “act or omission affects or was intended to affect a public body, business or any other person in the Republic”.

Clause 34: Repeal and amendment of laws and savings
Adv Nel proposed that the heading of this clause be substituted by the words “transitional provisions”. The Committee accepted the proposal.

Clause 35: Short title and commencement
The Chair proposed that the coming into operation of Clause 32(2) in Subclause (2) should be changed to 31 July 2004 instead of 27 July 2004.

The meeting was adjourned.