Looking inward: Anticipated legal developments on institutional integrity

​​​​To combat corruption, government has enacted and plans to enact further legislative reforms. These reforms bolster accountability, impose stricter penalties for non-compliance, and enhance protections for whistleblowers.

There is a growing suite of anticipated and/or recently implemented statutory obligations to prevent, detect, and address corruption. While the statutory obligations do not fall upon employers in such a capacity, the practical execution of anti-corruption obligations inherently falls within the sphere of employment law due to its implications for workplace policies, employee rights, and organisational compliance. As such, both employees and their employers must be conscious of the laws relating to corruption.

Most recently, amendments to the Prevention and Combating of Corrupt Activities Act, 2004, (PRECCA) were effected when the Judicial Matters Amendment Act, 2023 (JMAA) was gazetted on 3 April 2024. >PRECCA is the main legislation that governs corruption and corrupt activities in South Africa. The statute establishes the general offence of corruption, and all persons (including juristic persons) are required to comply with its provisions.

Section 23 of the JMAA inserts a new section 34A to PRECCA which imposes obligations on members of the private sector and incorporated state-owned entities (SOEs) to prevent corrupt activities within their respective organisations.

Section 34A states that any member of the private sector, or incorporated SOE associated with a person giving or offering gratification prohibited under Chapter 2 of PRECCA, will be deemed guilty of an offence. Section 34A differentiates between gratification to obtain or retain business, and gratification to obtain or retain an advantage in the conduct of business, with no offence occurring for the latter if adequate corruption prevention procedures were in place. This amendment places a positive obligation on businesses to implement corruption prevention measures.

The obligations set out in section 34 of PRECCA apply to those in a position of authority and who know or ought to reasonably have known that someone has committed an offence, provided the offence involves an amount of ZAR 100 000 or more. The existing obligation is limited to reporting an actual or suspected offence to the Directorate for Priority Crime Investigation. Now, the scope of obligations on businesses will expand to imposing a penalty for the failure to establish and maintain adequate procedures to prevent corrupt activities by associated persons from the outset. This is a marked change from the old legal framework which did not create a specific obligation to establish programmes and policies to prevent corruption. Therefore, whilst compliance programmes and policies have become standard practice and are useful in mitigating the risk of corruption, they have not been mandatory until now.

Importantly, the term "associated persons" within the scope of section 34A, includes individuals performing services for or on behalf of an entity, irrespective of their capacity within the organisation. This may encompass employees, agents, contractors, and any other individuals acting on behalf of the entity. The scope is therefore very broad but not unusual having regard to the evolving sphere of responsibility that falls upon businesses.

While section 34A removes liability for businesses with adequate anti-corruption measures in specific circumstances, it is silent on what this may entail. The practical implementation of this provision raises questions about the nature and scope of adequate anti-corruption measures that businesses must adopt to avoid liability under the amendment. In this regard, businesses may consider:

  • Assessing the likelihood and nature of risks: A risk-based approach to assessing the nature and likelihood of unethical incidents arising would ensure that the measures required are proportionate to the risks identified. By identifying industries, sectors, jurisdictions, functions, or workstreams in the business that may be susceptible to corrupt influences, business will be better equipped to implement appropriate measures to prevent associated members from engaging in corrupt practices where their exposure to such influence may be higher.
  • Ensuring a culture of integrity: Implementing policies and routine training on the ethics and standards required of those associated with an organisation is a vital element of risk mitigation. This ensures that all who purport to act on behalf of the organisation are equipped with the knowledge of how to do so in a manner that is consistent with the organisation's values. Such policies and training should also set out the consequences of failing to do so. In addition, training ought to include information regarding the procedures available to, and the actions required of its personnel if unethical conduct is suspected or uncovered.
  • Detecting risks: Establishing appropriate and structured procedures to receive, assess and address reports of unethical conduct. This is an existing statutory obligation in terms of the Protected Disclosures Act, 2000 insofar as it relates to employees. A confidential hotline should be accessible to employees and associated persons for seeking guidance or reporting concerns, with or without evidence. Whistleblower protection reforms are anticipated to provide for anonymous reporting to counter fear of retaliation, thus facilitating the collection of information on integrity challenges and policy violations. In addition, entities may consider conducting periodic screening of employees for competence and integrity as well as scrutinising the information proffered by them against targeted sanctions lists. This wisdom is borrowed from the statutory obligations imposed on accountable institutions which were extended to cover prospective and current employees under the Financial Intelligence Centre's Directive 8 in March 2023.
  • Addressing incidents: If investigations into identified risks or reported incidents establish that violations took place, it becomes incumbent on businesses to take further steps. In respect of employees, this will involve instituting disciplinary action followed by appropriate sanctions. For individuals performing services for, or on behalf of an entity in a different capacity, appropriate measures would be decided based on the nature of the specific relationships. In either instance, entities will need to consider whether the infringement triggers reporting obligations in terms of PRECCA or other applicable legislation.

These and other adequate measures to prevent corruption are existing legal obligations albeit arising from disparate legislation. Members of the private sector and SOEs seeking to mitigate the risk of liability under section 34A would need to identify, and consolidate a record of the various obligations. Such an exercise would align with the recommendations set out in International Standard ISO 37001 which advocates for anti-bribery management systems, among other things, for a consolidated record of responsibilities.

By adopting tailored anti-corruption measures, organisations enhance their resilience and protect their interests in an increasingly regulated environment. A culture of integrity starts with an inward focus; existing employment-related policies and practices serve as a useful starting point in assessing what corruption prevention measures are already in place and identifying areas for improvement.


These materials are provided for general information purposes only and do not constitute legal or other professional advice. While every effort is made to update the information regularly and to offer the most current, correct and accurate information, we accept no liability or responsibility whatsoever if any information is, for whatever reason, incorrect, inaccurate or dated. We accept no responsibility for any loss or damage, whether direct, indirect or consequential, which may arise from access to or reliance on the information contained herein.

© Copyright Webber Wentzel. All Rights reserved.

Webber Wentzel > News > Looking inward: Anticipated legal developments on institutional integrity
Johannesburg +27 (0) 11 530 5000
Cape Town +27 (0) 21 431 7000
Validating email against database, please wait...
Validating email: please wait...
Email verified: Please click the confirmation link sent to your mailbox, also check junk/spam folder. If you no longer have access to this email address or haven't received the verification email then email communications@webberwentzel.info
Email verified: You are being redirected to manage your subscription
Email could not be verified: Please wait while you are redirected to the Subscription Form
Unanticipated error: Saving your CRM information Subscription Form