The fight against corruption and bribery is a global phenomenon which has gained worldwide momentum in recent years. However, the problem is that if anything, it’s getting worse, and especially so in Africa. The fight is more than a moral obligation; it’s a reality that is now criminally enforceable with severe penalties for those who flout the law.
Despite anti corruption and bribery legislation being in place, the problem seems to be growing in Africa. According to a recent survey by the anti-corruption organisation, Transparency International, in four out of six countries people paid bribes to speed up service delivery, while in South Africa more bribes were paid to avoid problems with the authorities.
Whilst the figures are alarmingly worrying, it is no complete surprise that in South Africa, there has been a flurry of high profile prosecutions of public figures who have had the whistle blown on their own criminal activities. Take “Travelgate”; the conviction of Schabir Shaik and the conviction of Jackie Selibi on corruption charges to name but a few.
However, companies should be aware that under new legislation the spotlight is now on business activities in the boardroom. Bribery and corruption in both the public and private sectors is a given and has been around for hundreds of years, but those companies who are turning a blind eye will ultimately pay a high price in the long run.
While some argue that bribery and corruption is embedded in the business culture of Africa, the tide is fast turning where ethics and legislation combine to combat such criminal activity with unlimited fines and prison sentences for those who do not comply.
At the crux of this tide for change is the international crackdown on bribery, not only in a particular country, but also for any organisation doing business with that country.
The United States were fast off the mark to deal with corruption and bribery when they introduced the Foreign Corrupt Practices Act in 1977 which enforced accounting transparency requirements, and the bribery of foreign officials for business.
This piece of legislation has forced many US companies to conduct an assessment of any new foreign business partner, to ensure there are no traces of corruption historically.
What’s more, it means that any businesses in Southern Africa looking to do business in the States must have a clean sheet in terms of bribery and corruption in business practice.
Likewise, the United Kingdom introduced new legislation which came into force last year (Bribery Act 2010) which goes a step further in tacking international bribery and corruption.
The key elements of the Act make it criminally enforceable for offences which include offering or paying a bribe; requesting or receiving a bribe; bribing a foreign public official and importantly, companies can now be prosecuted for failing to prevent bribery from being undertaken on behalf of an organisation.
The South African Companies Act (Section 43) also makes provision for anti-bribery provisions with the onus now on a company to comply, and requires a company’s social and ethics committee to monitor their anti-corruption processes and procedures.
“It goes without saying that corporate governance, ethics and better business practice is the future, not only internationally but within South Africa as well, as South African businesses will be forced to ensure they have their own controls, policies and procedures in place by their foreign business partners,” said Tim Marshall, CEO, Trifecta Capital Services.
“It is now up to all businesses to ensure they have taken preventative measures to wipe out bribery and corruption within their organisation or face unlimited fines and imprisonment as a result,” he added.
The companies taking a pro-active and visible stance against corruption and bribery are likely to be the ones who win in the foreseeable future, argues Trifecta Capital Services.
Trifecta Capital Services offers these tips for fighting corruption and bribery:
- Continually monitor and review procedures designed to prevent corruption and bribery amongst employees, clients and suppliers;
- devise and practise good corporate governance and ensure the board of directors buy into compliance and procedures of the new legislation;
- review supplier relationships to ensure all comply with the law;
- instigate and make public through mass communication and clear transparency, the anti-bribery and corruption policies for both internal and external stakeholders;
- develop and put into practice internal controls, ethics and compliance programmes;
- and ensure due diligence in all business practice and procedures are followed and well documented.