Recent Amendments to the Prevention and Combatting of Corrupt Activities Act – A
step in the right direction or another compliance challenge?
South Africa’s principal piece of legislation for anti-corruption and related matters is the
Prevention and Combatting of Corrupt Activities Act 12 of 2004. This Act is more commonly
referred to as (“PRECCA”). In its preamble the Act states:
“To provide for the strengthening of measures to prevent and combat corruption and corrupt
activities; to provide for the offence of corruption and offences relating to corrupt activities;
to provide for investigative measures in respect of corruption and related corrupt activities.”
We can see from the above that the primary intention of PRECCA was to provide a
framework for the combatting of corrupt activities, highlight these activities as offences and
provide an investigative procedure for dealing with said activities.
President Cyril Ramaphosa had on 3 April 2024, signed into law the Judicial Matters
Amendment Bill, which contained a much-needed amendment to PRECCA. The rational for
the implementation of this amendment may boil down to a number of reasons which could
possibly include amongst other things: Legislative attempts to bolster South Africa’s anti-
corruption laws in response to our recent 2023 FATF Grey-Listing, the increasing identifiable
instances of corruption and corrupt activities evident in South Africa in recent years or even
recommendations posed by the State Capture Commission.
Section 34A states that any member of the private sector or incorporated State-Owned Entity
will be guilty of an offence if a person associated with that member commits a corruption
offence or corrupt activity to obtain or retain a business advantage for that private or State-
Owned Entity.
It is important to note that under the newly implemented Section 34A of PRECCA, the term
“associated persons” includes individuals performing any services for or on behalf of an
entity, irrespective of their actual capacity or role within the organisation in question. This
could include amongst other things employees, contractors, third party service providers,
directors, members etc. The Act has framed the concept quite broadly for interpretation.
A defence to Section 34A exists in that, if a company can demonstrate that it had any form of
adequate procedure in place to prevent corrupt activities being perpetrated by associated
persons, it will not be found guilty of an offence.
The practical implication of this amendment is that it now places stringent compliance
requirements on companies’ as they need to implement enhanced anti-corruption policies and
compliance programmes to ensure compliance.
Rest assured, the LMW Forensics Team can assist your company with compiling anti-
corruption policies, conducting integrity due diligence in respect of director, employees,
third-service providers, etc, and formulating compliance programmes in line with the latest
required legislative standards and codes.