New Corporate ADR policy brings South Africa in line with international best practice


The National Prosecuting Authority (NPA) recently published its Corporate Alternative Dispute Resolution (C-ADR) Policy, which allows the use of an alternative mechanism to resolve criminal cases against companies, as opposed to only relying on normal criminal court proceedings. Therefore, companies implicated in corruption may, in certain circumstances, avoid criminal conviction at a cost. The policy does not apply to individuals as directors (former or current), employees or other individuals involved in wrongdoing can still be prosecuted independently.

The NPA's adoption of the C-ADR follows a recommendation from the Zondo Commission of Inquiry into State Capture and brings South Africa in line with international best practices. These best practices highlight the importance of "non-trial resolutions" to combat corruption.

As the world becomes more advanced and interconnected, conventional rules and regulations fall short in effectively combating corruption. This calls for a collective approach, including public-private partnerships, and innovative tools and mechanisms such as non-trial resolutions. These mechanisms have been effective in combatting corruption in several countries including Brazil, Britain, Canada, France, Germany, Kenya, Malaysia, and the Netherlands. The United States and the United Kingdom both use deferred prosecution agreements, which suspend prosecution for a defined period, provided the company meets certain specified conditions.

In 2007, a novel approach to the fight against corruption emerged when Professor Johann Graf Lambsdorff proposed the "invisible foot" principle. This theory recognises that the unreliability of corrupt actors and the risk of betrayal among corrupt counterparts is something that can be used to induce honesty and good governance in corrupt networks. The strategy targets the vulnerabilities of corrupt networks, which typically operate on weak trust, as corrupt deals cannot rely on legal enforcement and members are wary of their untrustworthy associates. By exploiting this weakness, law enforcement can incentivise individuals to step forward with crucial information, thus crippling the network from within. This approach is endorsed by the United Nations, which recognises it as a powerful tool against corruption, similar to fighting organised crime. Both rely on hidden networks, often necessitating inside information obtained through leniency incentives for effective investigation and prosecution.

C-ADR sets out four guiding principles and ten criteria that prosecutors should consider when determining whether C-ADR will apply. The four guiding principles include:

  1. ​A legality and rationality principle commits the NPA to making decisions that uphold the rule of law.
  2. A public interest principle requires that decisions are taken in line with objectively justifiable public interest considerations.
  3. A transparency principle requires the NPA to record and publish its decisions to ensure transparency and accountability.
  4. A guided discretion principle sets out the principles and practical considerations that should guide the NPA in exercising its discretion on whether to use C-ADR.

The guided discretion principle states that a prosecutor's discretion should be guided by whether there is:

  1. voluntary and effective disclosure of wrongdoing by the company and proactive remediation including, where appropriate, compensating victims;
  2. full cooperation by the company with current and future investigations, asset forfeiture proceedings in terms of the Prevention of Organised Crime Act and prosecution, of individuals and/or other implicated companies;
  3. willingness and capacity on the part of the company to implement and monitor an effective compliance programme and internal controls;
  4. pervasive wrongdoing within the company; and
  5. a likelihood that conviction might result in significant adverse collateral effects on the company's employees, shareholders, creditors, the economy, how investigations are conducted, and co-operation with law.

For the government, the C-ADR policy offers significant cost and time savings compared to lengthy trials which require it to prove its case beyond reasonable doubt. Importantly, where C ADR is used, the company must bear the cost of the investigation, the cost of co-operating with authorities, the disgorgement of its profits and the compensation of victims.

This policy sets out a new standard for corporate behaviour. It assumes that companies have effective compliance programmes that outline and dictate how internal investigations should be conducted. The responsibility for anti-corruption is now shared but the private sector is incentivised to maintain high standards of corporate governance and corporate accountability. We believe this policy could be a key step towards greater accountability.

Over the coming weeks, we will publish some practical insights looking at how we might expect the policy to impact corporate governance and accountability.


Over the coming weeks, we will publish some practical insights looking at how we might expect the policy to impact corporate governance and accountability.​


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 > New Corporate ADR policy brings South Africa in line with international best practice
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
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