SOUTH AFRICA Country Profile

General Information

The Political Climate


South Africa has undergone substantial changes during the last 10-15 years, transforming itself from an international pariah during apartheid rule into a democratic regional power with well-developed economic and political ties to countries in the region and beyond. Unlike many other African countries, South Africa has a large private sector and a growing private tax base. The government has openly committed itself to a liberal economic course with a focus on macroeconomic stability, financial discipline and an increase in foreign direct investments. Furthermore, South Africa has been relatively successful in building independent public institutions. The political climate has been and is most likely to remain stable as the African National Congress party (ANC), which has been the ruling party since the end of the apartheid, again won the presidential elections in April 2009. As expected, the controversial leader of the ANC, Jacob Zuma, won the presidency by a large margin.

The country's political life has been plagued by major corruption scandals, the most famous of which is the so-called 'Arms Deal'. The scandal involves the leader of the ANC and now President, Jacob Zuma, who allegedly took kickbacks in a major public procurement scandal exposed in 1999. Zuma's former financial adviser, Schabir Schaik, has been sentenced to 15 years imprisonment for his involvement in the scandal. Charges against Zuma himself were repeatedly dropped and revived, only to be ultimately dismissed on a technicality just two weeks before the 2009 presidential elections. Zuma's political supporters expressed concerns over the years that the charges were driven by a political vendetta by former President Mbeki who, due to these allegations, was eventually dropped by his own party and forced to resign as President in September 2008. Other high-profile cases, such as the 'Travelgate scandal', in which more than 20 Members of Parliament were accused of defrauding the Parliament of ZAR millions by using fake travel vouchers, have seriously harmed public trust in the ANC. The scandals involving Members of Parliament and high-ranking officials, coupled with the dismantling of the elite anti-corruption investigation agency, the 'Scorpions' (see 'Public Anti-Corruption Initiatives' in the Initiatives section), have made some observers question the government's commitment to fight corruption. According to the Bertelsmann Foundation 2010, among other factors, ANC dominance on the political scene has in fact weakened institutional checks and balances, and its political power has been used to strategically influence or impede investigations into corruption scandals. President Zuma's new cabinet of ministers already seems to be posing some integrity issues, as highlighted in May 2009 by the Global Integrity Commons which reports that 42% of the executive is in positions of potential conflicts of interest. Moreover, the Economist reports that the Special Investigating Unit (SIU), one of South Africa's anti-corruption bodies, had identified 400,000 civil servants getting welfare payments to which they were not entitled. A further 6,000 senior government officials had failed to declare their business interests, as required by the law, and were awaiting disciplinary hearings. According to the head of the SIU, however, the state's ability to convict and punish the guilty was, 'pretty limited and, in some cases, almost completely non-existent'. Furthermore, it is interesting to note that there is no law regulating private funding of political parties in South Africa. According to the Institute for Security Studies Who Funds Who, a lack of control over the private funding of political parties allows the wealthy to 'buy' influence and access through secret donations. Moreover, this lack of regulation enables the political process to be corrupted through party donations. Most South African political parties have been implicated in scandals linked to party funding and it is an issue that is not unique to any one political party.

Despite the overall success of South Africa in transforming itself into a democratic state with regionally unmatched economic performance, many social problems remain unsolved. Corruption is certainly a serious problem for South Africans, but figures from the Afrobarometer 2008 show that the public expects the government to address other issues first, such as immense unemployment, poverty, HIV/AIDS and crime. Surveyed citizens do not generally perceive public institutions to be widely affected by corruption and bribery, even though the vast majority of them viewed the previous government's efforts against corruption in the public administration as highly ineffective. It should also be noted that these surveys reveal that few respondents have had direct experiences with corruption and bribery. According to the Institute for Security Studies 2008, the South African social security budget lost an estimated ZAR 1.4 billion in 2006 due to corruption and maladministration. These losses have resulted in frequent interventions by the national government in order to improve local and provincial governance and to raise public trust in government institutions.

Business and Corruption

Over the past decade, the Government of South Africa has sought to liberalise trade and enhance international competitiveness, and the South African economy expanded by an annual average growth rate of more than 5% between 2004 and 2007, dropping to 3.1% in 2008. While the media frequently reports on corruption scandals involving high-ranking civil servants, petty corruption is not perceived as being particularly pervasive compared to other African countries. According to the World Bank & IFC Enterprise Surveys 2007, only 17% of the companies operating in South Africa identify corruption as a major obstacle to business operations, compared to a regional average of more than 34%. These figures are supported by the World Economic Forum Global Competitiveness Report 2009-2010, where companies rank corruption as the sixth most problematic factor for doing business in the country. The single largest constraint for business operations is reportedly crime and theft, followed by an inadequately educated workforce. Yet, tendencies in the labour market indicate that this might be linked indirectly to corruption. There have been reports of personnel officers from the private sector who accept bribes in exchange for awarding jobs, especially with respect to unskilled or semi-skilled jobs. A Business Against Crime South Africa & GTZ 2006 study on corruption in the private sector highlights how favouritism and nepotism are commonplace in the private sector. The driving force behind this bribery may be due to the very high unemployment rate. Inefficient government bureaucracy and restrictive labour regulations are also noted as major business constraints by a very large number of companies.

Business operations in South Africa cannot be called corruption-free. The World Bank & IFC Enterprise Surveys 2007 show that 15% of companies surveyed expect to make facilitation payments to public officials to 'get things done', with the figure for SMEs being higher than that for large companies. According to IOL, the study found that middle management was mostly involved in accepting and demanding bribes as well as offering and paying bribes. The most prevalent forms of corruption included competing for quotes/tenders (29 percent), awarding tenders/quotes (11 percent), theft from company (10 percent) and Black Economic Empowerment (BEE) fronting (7 percent). Companies surveyed by the Business Against Crime South Africa & GTZ 2006 study of corruption in the private sector report that 61% of bribes paid are under ZAR 10,000, which likely take the form of facilitation payments. However, 18% of bribes paid are reportedly between ZAR 10,001 and 50,000, whereas 11% are between ZAR 50,001 and 100,000. These bribes are substantial and point to bribery at higher levels. According to the same study, there is a very high level of agreement among companies surveyed that bribes are paid in order to bypass arduous regulatory requirements to get approvals to which companies are legally entitled. This suggests that many companies pay bribes in order to deal with the country's cumbersome regulatory environment. However, a greater number of companies surveyed agree that bribes are paid in order to avoid adverse regulatory interventions (fines, fees) and to get approvals to which they are not legally entitled, indicating that the tendency towards 'true corrupt intent' outweighs the tendency to act corruptly 'out of necessity'. The fight against corruption in connection to business operations has apparently not shown any progress. In fact, 73% of the business executives surveyed perceive the government's efforts in fighting corruption as 'ineffective' or 'very ineffective', according to Transparency International Bribe Payers Index 2008.

Public procurement is often cited as an area of business activity in which foreign companies are very likely to encounter corruption and other unethical practices. In the study of private corruption from 2006, both collusion between competitors before bidding on a public contract and the payment of kickbacks to the awarding civil servant emerge as common practices. The problem was also recently acknowledged by the Minister of Finance in his 2009-2010 budget vote speech. Supplymanagement reports that in order to root out corruption in public sector procurement, President Zuma announced in the parliament in February 2010 that his government plans to establish a tender compliance unit and introduce supply chain fraud audits, in addition to improving spending data and establishing a ministerial committee on corruption. This announcement was made days after five public officials were arrested on account of procurement fraud. In order to best reduce the risk of extortion and demands for bribes in the procurement process, foreign investors considering bidding on public tenders are advised to use a specialised due diligence tool on public procurement. All in all, due to the likelihood of encountering corruption, companies are generally advised to consult with experienced attorneys, to develop, implement and strengthen integrity systems, and to carry out extensive due diligence before committing funds or when already doing business in South Africa.

Regulatory Environment

In the World Economic Forum Global Competitiveness Report 2009-2010, surveyed companies rank inefficient government bureaucracy as one of the top four constraints on doing business in South Africa. The Bertelsmann Foundation 2010 reports that increasing levels of corruption within the public service and particularly at the local government level is a growing concern. Nevertheless, the tax system is efficient. According to the US Department of State 2009, regulations and application forms regarding operating licences are straightforward and data from the World Bank & IFC Doing Business 2010 reveals that bureaucracy is not as unwieldy in South Africa as in other countries in the region. The data indicates that it only takes an average of 6 procedures and 22 days to start a company in the country at a cost of 6% of GNI per capita, compared to a regional average of 10 procedures and 46 days at a cost of 100% of GNI per capita. In total, the World Bank & IFC Enterprise Surveys 2007 reveals that senior managers can expect to spend almost 6% of their time annually on complying with regulatory requirements. Amendments to the Corporate Act have eased company start-ups considerably by allowing for electronic submission of documents and by no longer requiring entrepreneurs to obtain legal assistance to start a company. Compared to the Sub-Saharan regional average, companies in South Africa encounter less complicated and less costly import/export procedures, less complicated procedures related to starting and closing a company and securing property rights, and smoother interaction with tax officials.

South African courts have been struggling with considerable backlogs for many years, which have delayed cases involving companies. A positive response to this problem has been the establishment of Specialised Commercial Crime Courts that have proven to be successful in dealing with white-collar crime. Business Against Crime South Africa has added financial backing to ensure the success of these courts. Dispute settlement and enforcement of commercial contracts is now relatively easy and not as costly as in other countries in the region, which is also reflected in the fact that companies operating in South Africa have greater confidence in the judicial system. According to Global Integrity 2008, small companies have the possibility to uphold their rights in court thanks to the Contingency Fee Act 1997, where the fees are not rendered unless the client is successful in his/her claim. South Africa is a member of the New York Convention of 1958 and it recognises the International Chamber of Commerce, which supervises the resolution of transnational disputes. Access the Lexadin World Law Guide for a collection of legislation in South Africa.

The South African Services website provides comprehensive information about the services offered by the South African government, including information on regulations, licences and permits. The Department of Trade and Industry (DTI) provides information and assistance to foreign investors. Its one-stop shop for investment offers information on sectors, industries and the regulatory environment, provides links to joint venture partners and assists with work permits. Investors will find several useful publications on its website, including The Cost of Doing Business in South Africa 2008 and Investors Handbook. Investors should note that the national government enacted a Broad-Based Black Economic Empowerment Act 2003, which is the legal framework behind a Black Economic Empowerment (BEE) strategy aiming at increasing the participation of black citizens in the South African economy. Companies are not required to meet BEE criteria, but are less competitive for government tenders if they do not. All companies must have their BEE compliance audited every year by an accredited verification agency under the Department of Trade and Industry. The BEE requirements are specified in the Codes of Good Practice, which were approved by the Parliament in 2006 and deal with employment equity, skills development, company development, preferential procurement and SMEs. However, the BEE strategy has also been criticised for providing too much preferential treatment to wealthy black elites in relation to getting government contracts, which has led to an increase in South African procurement corruption. For a critical assessment of the BEE strategy in relation to procurement corruption, see the Institute for Democracy in South Africa 2008.

Judicial System

Individual Corruption

According to Transparency International Global Corruption Report 2007, around half of the people using the lower courts do not trust the judiciary, but rather perceive it as being corrupt. This perception is corroborated by the findings of Afrobarometer 2008, which reveal that many citizens consider judges and magistrates to be involved in corruption.

Business Corruption

The departments of public works and justice have sued several contractors and more than 20 magistrates around the country who they claim were involved in a costly misallocation of funds in which departmental concessions were used for luxuries instead of maintenance work as intended. The investigation showed that some magistrates used the money to purchase luxury items for their own residences and offices under the guise of necessary maintenance.

According to the US Department of State 2009, South African commercial law is generally enforced uniformly by an independent and objective judiciary.

Political Corruption

According to the Bertelsmann Foundation 2010, the South African judiciary acts independently without interference from the government. Constitutional provisions aiming at promoting and safeguarding judicial independence are established. The judiciary, in particular the Constitutional Court, is capable of checking the executive. Some of the court's rulings were major defeats for the executive and the parliament, although the executive and the ANC play a decisive role in the recruitment process. According to Global Integrity 2008, there are no reports of judges being physically harmed when adjudicating corruption cases. The judiciary is generally not ranked among the most corrupt institutions in the country and observers agree that corruption within the judicial system is low due to high salaries and guaranteed tenure and benefits. However, the disciplinary body that has the mandate to handle claims about judges, the Judicial Service Commission (JSC), has not reacted to corruption charges adequately.

Due to concerns about long waiting periods for trials and a poor standard of internal administrative procedures in the Department of Justice and in magistrates' courts, the Asset Forfeiture Unit (AFU), a unit under the National Prosecuting Authority (NPA), has investigated fraud in magistrates' courts and found at least 285 cases of alleged fraud, which have since been referred to the police.

According to some magistrates, cases of corruption are not handled efficiently by the courts because prosecutors and police officers are occasionally too inexperienced to handle and prepare cases of corruption. Furthermore, police officers have too many cases to handle and cannot give adequate attention to individual cases.

Frequency

The World Bank & IFC: Doing Business 2010:
- It takes an average of 30 procedures and 600 days to enforce a commercial contract at a cost of 33% of the claim.

World Economic Forum: The Global Competitiveness Report 2009-2010:
- Business executives give the independence of the judiciary from influences of members of government, citizens, or companies a score of 5 on a 7-point scale (1 being 'heavily influenced' and 7 'entirely independent').

- Business executives give the efficiency of the legal framework for private companies to settle disputes and to challenge the legality of government actions and/or regulations a score of 5.1 and 4.7 respectively on a 7-point scale (1 being 'extremely inefficient' and 7 'highly efficient'), constituting competitive business advantages for the country.

Afrobarometer: Summary of Results South Africa 2008:
- 39% of respondents believe that some judges and magistrates are involved in corruption.

- 19% of respondents believe that most judges and magistrates are involved in corruption.

- 7% of respondents believe that all judges and magistrates are involved in corruption.

Transparency International: Bribe Payers Index 2008:
- Business executives rank the judiciary as the fourth most corrupt public institution in the country, scoring 2.9 on a 5-point scale (1 being 'not at all corrupt' and 5 'extremely corrupt').

Transparency International: Global Corruption Barometer 2007:
- Citizens give the judiciary a score of 3.3 on a 5-point scale (1 being 'not at all corrupt' and 5 'extremely corrupt').

The World Bank & IFC: Enterprise Surveys 2007:
- 59.5% of the surveyed companies perceive the judicial system to be fair, impartial and uncorrupted.

Police

Individual Corruption

According to a 2009 Institute for Security Studies article, officers of the South African Police Service (SAPS) are highly corrupt. The article notes that, while mandated to investigate corruption, the police are considered to represent one of the public organs most prone to it. Other surveys indicate that the most common acts of bribery involving SAPS officials take place when individuals offer bribes in attempts to prevent arrests from being carried out. The 2009 Institute for Security Studies article shows that the population holds the police in very low esteem, referring to an opinion poll in which majority of the respondents do not trust the police. In the beginning of 2009, South Africa's Security Minister confirmed that the public perception of the police being corrupt was correct.

Business Corruption

According to Transparency International Bribe Payers Index 2008, business executives consider the police to be the most corrupt institution in the country. According to the World Economic Forum Global Competitiveness Report 2009-2010, not only do business executives say that South Africa performs poorly in relation to the cost of violence and organised crime for companies, but also in relation to the reliability of the police to protect companies from crime and to uphold law and order. This is corroborated by the World Bank & IFC Enterprise Surveys 2007, which reveal that a little more than three-fouths of the companies pay for security in South Africa while more than one-third of the companies identify crime, theft and disorder as major constraints to doing business in the country.

A significant proportion of companies consider police investigations as an activity that is likely to involve bribery. However, lack of proof in cases of corruption combined with low levels of trust in the criminal justice system leads many companies to refrain from reporting bribery.

Political Corruption

In July 2009, the Directorate of Special Operations (DSO), commonly known as the 'Scorpions', was officially shut down and replaced by a new unit, the Directorate for Priority Crime Investigation, commonly known as the 'Hawks'. The Scorpions have been active in investigating high-profile corruption cases, such as those involving the South African Police Service (SAPS). See the 'Public Anti-Corruption Initiatives' section for further information on the SAPS and the Scorpions.

High-profile corruption cases plagued two South African police units in late 2007 and early 2008. National Police Chief and Head of Interpol Jackie Selebi was accused of taking large bribes from individuals connected to organised crime, and has now been removed from both his positions. In March 2010, Selebi's trial was ongoing and he pleaded not guilty to all charges of corruption against him.

Frequency

World Economic Forum: The Global Competitiveness Report 2009-2010:
- Business executives in South Africa give the police a score of 3.3 on a 7-point scale (1 being 'cannot be relied upon at all to enforce law and order' and 7 'can always be relied upon to enforce law and order').

Transparency International: Bribe Payers Index 2008:
- Business executives rank the police as the most corrupt public institution in the country, scoring 4 on a 5-point scale (1 being 'not at all corrupt' and 5 'extremely corrupt').

Afrobarometer: Summary of Results South Africa 2008:
- 37% of the respondents believe that some police officers are involved in corruption.

- 35% of the respondents believe that most police officers are involved in corruption.

- 11% of the respondents believe that all police officers are involved in corruption.

The World Bank & IFC: Enterprise Surveys 2007:
- 76.4% of companies surveyed pay for security.

- 38% of companies identify crime, theft and disorder as major constraints to doing business in the country.

Transparency International: Global Corruption Barometer 2007:
- Citizens give the police a score of 3.8 on a 5-point scale (1 being 'not at all corrupt' and 5 'extremely corrupt').

Licences, Infrastructure and Public Utilities

Individual Corruption

Petty corruption is a significant problem in South Africa's civil service. According to Transparency International Global Corruption Barometer 2007, citizens rank registry and permit services among the most corrupt institutions in South Africa. For example, the Department of Home Affairs, which is tasked to issue identity documents, passports, and residence and work permits, is notoriously plagued by corruption. This has led the UK government, starting from the beginning of 2009, to require South African passport holders to obtain a visa prior to entering the country.

Local government motor vehicle traffic departments are often described as being prone to corruption. Bribes are frequently demanded during applications for drivers' licences, but are most commonly demanded in relation to traffic fines. The public frequently interacts with traffic officials on the road, where the actions of corrupt officials are difficult to monitor. The high level of corruption at these departments also highlights the poor performance of many local governments. The Special Investigating Unit has begun a massive investigation in conjunction with the National Department of Transport into the irregular issuing of driver's licences and irregular registration of vehicles. It is estimated that as many as 25% of drivers in Gauteng and Eastern Cape provinces may have falsified driver's licences.

Business Corruption

Although the regulatory environment in South Africa is continuously being improved, some public services are still characterised by high levels of red tape - much to the disadvantage of companies. According to Global Integrity 2008, the Businesses Act of 1991 assigns the role of granting business licences to local governments, resulting in inconsistent interpretation and implementation of business licensing regulations. Many companies experience corruption when dealing with the Department of Home Affairs and its local units, which are in charge of issuing various licences and permits. The procedures for obtaining work permits and business licences are pointed to as actions likely to involve bribery. Furthermore, Global Integrity 2008 reports that government inspectors sometimes accept bribes from companies in exchange for ignoring non-compliance with health, safety and other licence regulations. However, statistical figures from the World Bank & IFC Enterprise Surveys 2007 and the Afrobarometer 2008 show that the corruption rate in relation to construction permits and connection to public utilities is low compared to the regional average.

Political Corruption

The National Roads Agency has been accused of manipulating a ZAR multi-billion highway project between Durban and East London in 2006. The agency allegedly manipulated the bidding process to disguise conflicts of interest and operated with environmental consultants who have been shown to lack political independence.

Large scale infrastructure and construction projects, such as the building of stadiums and related facilities, have begun in connection with the 2010 FIFA World Cup with South Africa as host. Some large scale corruption scandals related to these projects have been covered by the media. For example, in the beginning of 2009, a politician was shot dead by masked men, allegedly because he 'blew the whistle' about corruption in the building of the Mbombela Stadium.

Frequency

The World Bank & IFC: Doing Business 2010:
- Building a warehouse in South Africa requires a company to go through 17 administrative steps, which take an average of 174 days at a cost of nearly 24.5% of income per capita.

World Economic Forum: The Global Competitiveness Report 2009-2010:
- Business executives give government administrative requirements (permits, regulations, reporting) in South Africa a score of 3.2 on a 7-point scale (1 being 'extremely burdensome' and 7 'not burdensome at all').

Transparency International: Bribe Payers Index 2008:
- Business executives rank the registry and permit services as the 4th most corrupt public institution in the country, scoring 3.5 on a 5-point scale (1 being 'not at all corrupt' and 5 'extremely corrupt').

Afrobarometer: Summary of Results South Africa 2008:
- Around 88% of respondents in this public opinion survey who applied for an official document or a permit in 2007 did not pay any bribe to obtain it.

- Around 89% of respondents who applied for public utilities, such as water or sanitation did not pay any bribe to obtain it.

The World Bank & IFC: Enterprise Surveys 2007:
-3% of the interviewed companies identify business licensing and permits as a major constraint to doing business in South Africa.

- 6.7% of the surveyed companies expect to pay a bribe to get an electrical connection.

- 4.6% companies expect to give gifts to get a phone connection.

- 4% companies expect to give gifts to get a water connection.

- No companies expect to give gifts in order to obtain an operating licence or to get a construction permit.

Transparency International: Global Corruption Barometer 2007:
- Citizens give medical services a score of 3.1, registry and permit services a score of 3.6 and utilities a score of 2.8 on a 5-point scale (1 being 'not at all corrupt' and 5 'extremely corrupt').

Land Administration

Individual Corruption

There are numerous cases of citizens obtaining fraudulent housing subsidies administered at the provincial level. People have successfully applied for grants using invalid identity documents. According to BuaNews, fraudulent activity related to misrepresentation of employment status, income, marital status and spousal income status. Between May 2007 and March 2009, a total of 1962 were found to have fraudulently received housing subsidies valued at R26 million, while 224 officials were found to be overpaid through the subsidy system amounting to over R2.4 million.

Business Corruption

Corruption connected to the comprehensive land reform and redistribution designed to transfer 30% of commercial farmland to black citizens by 2014 has led the government to review procedures within the programme. According to the US Department of State 2009, only 4.1% of total farmland had been redistributed under the reform programme by 2008. Prices for land earmarked for sale to the government have been fraudulently inflated by an average of 30% by property speculators and farmers. Speculators have purchased rundown vegetable and dairy farms at very low prices only to resell these properties to the government at much higher prices, thus generating massive profits. There are indications that officials at the provincial level have cooperated with property speculators to systematically manipulate sale prices or even bankroll some of the fraudulent transactions. This over-charging is estimated to have cost the government ZAR 20 million in Mpumalanga Province alone.

A subsidy system aimed at the construction of low-cost housing for poor South Africans has experienced several cases of corruption at provincial and local levels. For example, the provincial government in Gauteng lost ZAR 400 million to a housing developer who had won tenders to build houses in 17 townships and was allegedly overpaid. The developer named false beneficiaries to claim subsidies from the government on their behalf and without their knowledge. For further information on this case, see the Institute for Security Studies SA Corruption Briefing Issue 6, 2003.

Political Corruption

Government employees in provincial housing departments have been accused of misusing housing subsidies. The officials approved grants to themselves and to colleagues, even though they earn more than the ZAR 42,000 annual salary subsidy threshold. The Auditor-General's report on provincial housing departments reveals that 7,353 government employees earning more than the salary threshold received total housing subsidies worth ZAR 93 million to which they were not entitled. In a similar case, Cape Town recently saw eight housing projects halted due to corruption and maladministration. These projects are being investigated for unauthorised payments of state subsidies and failure by the service provider to comply with contractual obligations.

In June 2009, the Human Settlement Minister acknowledged that corruption was a major problem in the awarding of housing to the poor. A report by BuaNews reveals that, as many as 772 civil servants had been investigated and 554 of them convicted of corruption. Furthermore, an article by South Africa: The Good News reveals that in November 2009, the minister cracked down on 923 government officials for their involvement in low-cost housing scams. The minister also stated that the Special Investigation Unit had been asked to conduct a comprehensive investigation of corruption and fraud in the housing department in order to develop a strategy to curb maladministration.

Frequency

The World Bank & IFC: Doing Business 2010:
- Registering property requires a company to go through an average of 6 administrative procedures taking an average of 24 days at a cost of nearly 9% of the property value.

- Registering property in South Africa is not as bureaucratic or time-consuming as in other countries in the region.

World Economic Forum: The Global Competitiveness Report 2009-2010:
- Business executives give the protection of property rights in South Africa, including financial assets, a score of 5.9 on a 7-point scale (1 being 'very weak' and 7 'very strong'), constituting a competitive business advantage for the country.

Tax Administration

Individual Corruption

There are reports of isolated incidents of corruption involving employees from the South African Revenue Service (SARS).

Business Corruption

Companies frequently interact with tax officials when they conduct inspections of plants. In many countries, these inspection visits form a market for corruption. However, according to the World Bank & IFC Enterprise Surveys 2007, this is not a major issue in South Africa compared to many other African countries. Although paying taxes can be rather time-consuming, companies do not consider tax officials to be very corrupt. The South African Revenue Service (SARS) is usually not ranked among the most corrupt public institutions when companies are asked about likely solicitors of bribes. SARS operates a 24-hour Fraud and Anti-Corruption Hotline (0800 00 28 70) to which companies can report corruption related to tax administration.

Frequency

The World Bank & IFC: Doing Business 2010:
- A medium-sized company operating in South Africa must on average make 9 payments to the tax authorities every year and spend 200 hours preparing, filing, and paying taxes at a total tax rate of a little over 30% of profits.

Afrobarometer: Summary of Results South Africa 2008:
- 29% of respondents believe that most or all of the SARS officials are involved in corruption.

-32% of respondents believe that some of the SARS officials are involved in corruption.

Transparency International: Bribe Payers Index 2008:
- Business executives rank the tax revenue authorities as the second least corrupt public institution in the country after religious bodies, scoring 2 on a 5-point scale (1 being 'not at all corrupt' and 5 'extremely corrupt').

Transparency International: Global Corruption Barometer 2007:
- Citizens give the tax revenue authorities a score of 2.5 on a 5-point scale (1 being 'not at all corrupt' and 5 'extremely corrupt').

The World Bank & IFC: Enterprise Surveys 2007:
- 3.1% of companies report that they are expected to give gifts when meeting with tax inspectors. This is among the lowest rates in the region.

Customs Administration

Individual Corruption

Individual traders from other African countries report that overcharging and bribery is common at official border crossings. ZimEye reports that, in December 2009, a South African immigration official who allegedly obtained a bribe from a Zimbabwean at the Beitbridge border post was arrested. In addition, International Intellectual Property Alliance Special 301 Report 2007 reveals that South Africa's expansive and porous borders also continue to hamper efforts to stem the flow of pirated products, especially audiovisual materials, between the countries that make up the Southern Africa Customs Union. South African Customs authorities remain unwilling in many instances to stop pirate products in transit through its territory. Furthermore, the South African Federation Against Copyright Theft reported statistics on seizures of counterfeit DVDs as well as a growing number of successful criminal cases, including imposition of prison sentences, against pirates in 2008.

Business Corruption

Companies identify the clearing of goods through customs as the business activity most likely to involve bribery. Consequently, a significant proportion of companies perceive customs officials to be likely to solicit a bribe. Trading across borders is not as bureaucratically cumbersome in South Africa as other countries in the region. However, according to the World Bank & IFC Doing Business 2010, it takes more time to clear imports and exports through South African customs than the average for OECD countries.

Frequency

The World Bank & IFC: Doing Business 2010:
- 8 documents are needed to export a standard shipment of goods, taking an average of 30 days at a cost of USD 1,531 per container.

- 9 documents are needed to import a standard shipment of goods taking an average of 35 days at a cost of USD 1,807 per container.

World Economic Forum: The Global Competitiveness Report 2009-2010:
- Business executives give the efficiency of customs procedures (formalities regulating the entry and exit of merchandise) in South Africa a score of 4.3 on a 7-point scale (1 being 'extremely inefficient' and 7 'extremely efficient').

Transparency International: Bribe Payers Index 2008:
- Business executives rank the customs as the fourth most corrupt public institution in the country (along with judiciary), scoring 2.9 on a 5-point scale (1 being 'not at all corrupt' and 5 'extremely corrupt').

The World Bank & IFC: Enterprise Surveys 2007:
- 2.7% of the interviewed companies expect to give gifts to get an import licence.

Public Procurement and Contracting

Business Corruption

According to observers, corruption is rife in the granting of government contracts in South Africa. Bribery thrives at the central government level, as exemplified by the high-profile procurement scandals that have been exposed within the last decade. In addition, there are numerous, though less publicised, scandals at the provincial level, indicating that the provinces are also struggling with serious irregularities in public procurement and contracting.

Multinational companies have been involved in what is commonly known as the 'Arms Deal', which is the largest corruption scandal in post-apartheid South Africa. Read more about the South Africa Arms Deal.

See more on public procurement under 'Public Anti-Corruption Initiatives' in the Initiatives section.

Political Corruption

Senior officials in national, provincial and local governments often have the chance to influence tender procedures. Consequently, lucrative government contracts are often awarded to companies owned by government family members. However, it should be noted that the tender board system has been in the process of being phased out and replaced by a supply chain management framework, which will decentralise these functions to accounting officers in departments and councils within the different tiers of government.

Cases of corruption involving politicians and public officials from provincial governments are numerous and often involve persons with the ability and authority to influence tender procedures. For example, the former Member of the Executive Committee (MEC) for Transport in the Northern Cape stands accused of awarding tenders worth more than ZAR 20 million to a construction company with close links to his family.

The former Deputy President, Jacob Zuma, was accused of being involved in the 'Arms Deal' scandal, where he allegedly demanded a bribe of ZAR 500,000 from the companies involved in the scandal. The charges were finally dropped in 2009. Read more about the South African Arms Deal.

A commission has been appointed to investigate the alleged illicit activities of certain South African companies and individuals connected to the UN Oil-for-Food Programme in Iraq. There are allegations that the ANC received financial support from companies that obtained tenders from the UN programme as well as alleged kickbacks from the regime of Saddam Hussein.

See more on public procurement under 'Public Anti-Corruption Initiatives' in the Initiatives section.

Frequency

World Economic Forum: The Global Competitiveness Report 2009-2010:
- Business executives give the diversion of public funds to companies, individuals, or groups due to corruption a score of 3.7 on a 7-point scale (1 being 'very common' and 7 'never occurs').

- Business executives give the favouritism of government officials towards well-connected companies and individuals when deciding upon policies and contracts a score of 3 on a 7-point scale (1 being 'always show favouritism' and 7 'never show favouritism').

The World Bank & IFC: Enterprise Surveys 2007:
- 33% of the companies surveyed expect to give gifts to secure a government contract.

- The value of a gift expected to secure a government contract is 1.7% of the contract value.

Business Against Crime South Africa and GTZ: Research Report on Corruption in the South African Private Sector 2006:
- 26% of the responding companies are aware of unethical procurement practices in their industry.

- 11% of the responding companies indicated bribery as one of these unethical practices.

- 53% of the senior managers within the public administration are involved in private companies that could pose a conflict of interest when awarding public contracts.

Environment, Natural Resources and Extractive Industry

Business Corruption

South Africa has introduced a comprehensive legal framework for environmental protection, which includes several sector-specific measures. Companies should note that all decisions affecting the environment are subject to Environmental Impact Assessment regulations. Although the formal measures for environmental protection are in place, the efficiency of regulations is reduced due to capacity deficits and lack of experience. According to Global Integrity 2008, government inspectors sometimes accept bribes from companies to ignore non-compliance with environmental regulations.

According to the Institute for Security Studies 2007, South African junior mining companies have been involved in compromising joint ventures in the Democratic Republic of Congo (DRC). The world's largest producer of platinum, Anglo Platinum, has also been accused of offering direct bribes in the Limpopo Province in order to secure community acceptance of the relocation of communities. In addition, a 2006 report by IOL revealed that international crime syndicates smuggled vast amounts of precious metals stolen from mines in South Africa, allegedly paying millions to buy off mine employees and members of the South African Police Service.

The Institute for Security Studies also notes that the fishing industry is plagued by corruption, illegal use of quotas and theft of marine resources by syndicates. There are indications that crime rates are rising within this industry. For example, the local media uncovered the 'Hout Bay Fishing case', in which fishing inspectors had for several years taken bribes in exchange for ignoring the poaching of fish. The case involved both top executives, skippers, boat owners and the Sea Point Office of Marine and Coastal Management's fishery inspectors.

A major crime investigation into organised smuggling of vast amounts of metals stolen from mines has been initiated. Syndicates have allegedly paid ZAR millions in bribes to mining staff and members of the South African Police Service to cooperate. The investigation is commonly known as 'Project Yield'.

Political Corruption

The local media uncovered a case in which a lucrative Nigerian oil contract was diverted to an offshore company. Former President Mbeki and other government officials lobbied the Nigerian government for the award of the contract, which subsequently went to the South African Oil Company (SAOC), registered in the Cayman Islands. SAOC has not transferred any funds to the South African state or public services, although the profits of this contract are estimated to be around ZAR 30 million a year. This in itself is not unusual. However, the company's South African contacts have turned out to have strong links to ANC interests, and a senior official in the Department of Minerals and Energy has lobbied for the contract to be increased in value, despite the apparent absence of benefits to the South African state and public. Following this case, the man behind SAOC planned to establish an oil refinery in East London. This project turned out to benefit several senior South African politicians and their families. See the Institute for Security Studies SA Corruption Briefing Issue 4 and Issue 5.

Anchored in the largely unregulated private funding of political parties, a prominent case of corruption has involved the former Deputy Minister for Social Development, David Malatsi. He accepted ZAR 400,000 in donations for the New National Party (NNP) from the developer of the Roodefontein Golf Estate in Plettenberg Bay. Malatsi was in charge of the province's environmental affairs at the time the permission for developing a golf estate was granted despite environmental impact studies showing that the environmentally sensitive area would suffer from the estate. Malatsi has been found guilty of the charges against him.

Public Anti-Corruption Initiatives

  • Legislation: South Africa ratified the United Nations Convention against Corruption in November 2004, the African Union Convention on Preventing and Combating Corruption in November the following year, and the OECD Anti-Bribery Convention in 2007. The country has a well-developed legislative framework aimed at fighting corruption; Global Integrity 2008 describes the framework as 'very strong'. The Prevention and Combating of Corruption Act 2004 criminalises corruption in the public and private sector and codifies specific offences, making it easier for courts to use the legislation. The act specifically criminalises attempted corruption, extortion, active and passive bribery, bribing a foreign official, abuse of office and money laundering. See the website of the National Anti-Corruption Forum for a useful guide to the act and its components and information on blacklisting of companies and how to report corruption (see 'Public Procurement' and 'Whistle-Blowing' sections below). The Public Finance Management Act of 1999 holds government officials accountable for unauthorised expenditures, and the Promotion of Access to Information Act 2000 ensures that public agencies cannot hide information that should be available to the public. However, the implementation of the law has not yet reached all levels of the public sector. The Code of Conduct for Assembly and Permanent Council Members requires public officials to disclose gifts and interests, but observers say that sanctions are weak and there are reports of public officials who fail to declare their interests. Many of these legal initiatives, including the Prevention and Combating of Corrupt Activities Act 2004 and the Framework for Supply Chain Management (see 'Public Procurement' section below) suffer from poor implementation. Read more about South Africa's anti-corruption legislative framework in the Transparency International National Integrity Systems South Africa 2005 and in the UNDP Institutional Arrangements to Combat Corruption. Access the Lexadin World Law Guide for a collection of legislation in South Africa.

  • Government Strategies: The Public Service Anti-Corruption Strategy of 2002 outlines the government's anti-corruption efforts and directs resources to the anti-corruption unit within the Department of Public Service and Administration (DPSA). The unit, the Anti-Corruption Coordinating Committee (ACCC), is staffed by a group of anti-corruption specialists and advises and supports the public sector on the implementation of anti-corruption policies and legislation. Although the ACCC does not carry out corruption investigations, it does run learning programmes for other public service departments under the Anti-Corruption Learning Network, which was started in July 2008. The DPSA has also announced that it will carry out a nationwide survey among companies, The Business Survey Against Corruption, that will target South African companies operating domestically and internationally. However, as of March 2010, this survey has not yet been released. Furthermore, in 2006, the Department of Provincial and Local Government (DPLG) launched a Local Government Anti-Corruption Strategy (LGACS), which aims at prevention, detection and investigation of corruption at the municipal level. This is part of national government's anti-corruption campaign focusing on local government, in which the provinces are expected to launch the strategy for their respective municipalities. The government has also entered into a collaborative strategic organisation through the National Anti-Corruption Forum (NACF). The NACF was established in 2001 and consists of representatives of the government, the private sector and civil society with the objective of advising the government on its approach towards combating corruption. Each sector is represented by ten members. Following the NACF's second National Anti-Corruption Summit in March 2005, a National Anti-Corruption Programme (NAP) was developed, aiming at coordinating key problem areas and projects with specific outputs, timeframes and budgets. Since the development of the NAP, the pace of the NACF's activities has accelerated significantly. The NACF's third National Anti-Corruption Summit was held in August 2008. See the NACF's third summit press release. For further information, read the Business Fighting Corruption NACF case summary. In November 2009, the Zuma government announced that a new committee will be set up that will deal with corruption at all levels, BuaNews reports. The committee is to be chaired by Minister in the Presidency for Performance Monitoring and Evaluation Collins Chabane and include the ministers of the public service and administration, national treasury, local government, social development, and representatives from the security cluster. The committee is to look at all past reports by the Public Service Commission on corruption and other reports to see what action was taken against all persons involved in corrupt practices involving public funds.

  • Anti-Corruption Agency: South Africa does not have a single anti-corruption agency with the powers and mandate to investigate, arrest and prosecute corruption cases. Instead a wide range of agencies are granted authority to address corruption in South Africa. These include, among others, the Special Investigating Unit (SIU), the Auditor-General, the Public Protector (Ombudsman), the Public Service Commission, the South African Police Service (SAPS) and the National Prosecuting Authority (NPA). See below for a description of these agencies.

  • Special Investigating Unit (SIU): The SIU is the only state agency solely dedicated to fighting corruption. The SIU is an independent statutory body established by the president's office in 2001. It conducts investigations of any form of corruption in state institutions at the President's request and reports to him on the outcome. The SIU is not mandated to arrest and prosecute suspects. Instead, it cooperates with the National Prosecuting Authority (NPA) and the Asset Forfeiture Unit (AFU) to make sure that prosecutions take place. The status of the SIU has been disputed due to the fact that the agency was left out of the 'Arms Deal' investigation (perhaps the biggest corruption scandal in the history of South Africa). The SIU has now regained its credibility as an effective anti-corruption agency. BusinessDay reports that, in January 2010, the head of SIU said the unit would continue to grow significantly in future, while underlining that this was not an indication that corruption was becoming more prevalent but rather that there was a lack of capacity in government departments to investigate all the allegations of corruption against public servants. It was also an additional sign of the government's commitment to combating corruption. The website of the SIU has a whistleblower mechanism where corruption within government departments can be reported (see 'Whistle-Blowing' below).

  • National Prosecuting Authority (NPA): The NPA was established in 1998 and is South Africa's first centralised prosecuting authority. It is constitutionally independent and has the power to initiate criminal proceedings on behalf of the state. It is led by the National Director of Public Prosecutions (NDPP) and three Deputy National Directors of Public Prosecutions. The NPA consists of seven distinct units, one of which was most prominent, the Directorate of Special Operations (DSO), commonly known as the 'Scorpions'. The unit succeeded in exposing several high-ranking officials involved in corruption and had a high prosecution record, with an average of 90% of cases prosecuted resulting in conviction. However, despite its impressive record and the high degree of trust it enjoyed within the population, the unit became the victim of the power struggle within the leading political party (ANC) and was dismantled in July 2009. The Scorpions have now been replaced by the Directorate for Priority Crime Investigations, known as the 'Hawks'. The Hawks form a unit under the national commissioner of police, and as such, are subject to the control of the executive. The organisational structure of the Hawks is not yet finalised, but the unit will investigate serious organised and commercial crime and grand corruption. Supporters of the Scorpions see their dismantling as an act by the ANC to defend and protect corrupt ANC officials. Another prominent unit under the NPA is the Asset Forfeiture Unit (AFU), which was established in 1999 with the mandate to take cases of organised crime and money laundering to court under Chapter 5 and 6 of the Prevention of Organised Crime Act 1998. According to the Institute of Security Studies 2007, the AFU has shown willingness and determination to operationalise the provisions of the act, which has resulted in a number of court cases. The AFU has had notable success in several cases against drug dealers, smugglers, as well as commercial fraudsters. It has also been directly involved in asset and property recovery of some high profile figures, involving Zuma's former financial adviser, Schabir Schaik, former Nigerian state governor, Diepreye Alamieyeseigha, and the former owner of Wheels of Africa and Hyundai Motor distributors, Willie Rautenbach.

  • Auditor-General of South Africa (AGSA): The AGSA is appointed by the National Assembly and has its independence guaranteed by the constitution. The AGSA reports to the National Assembly through the Standing Committee on Public Accounts (SCOPA) and AGSA counterparts at the provincial level. It is mandated to audit and report on the accounts, financial statements and financial management of national and provincial state departments and administrations, municipalities and other institutions legally authorised to receive money for a public purposes. The AGSA plays an important role in the control of economic crime in South Africa, including the prevention of corruption. Some sources note that, while the independence of the AGSA is constitutionally guaranteed, the 'Arms Deal' corruption case brought the extent of AGSA's independence into question. Sources also note that incomplete reporting, particularly at the provincial and municipal levels, and the lack of motivation by Parliament to act on the AGSA's recommendations hamper the efforts of the institution.

  • South African Police Service (SAPS): The Constitution of South Africa 1996 established the SAPS as a single, nationwide police service under the executive command and control of a presidentially appointed National Commissioner. Within the SAPS, the Commercial Branch of the Detective Service Division holds the main responsibility in relation to corruption. In mid-2007, the SAPS was hit by a large-scale scandal, as its National Commissioner (and head of Interpol), Jackie Selebi, was arrested by the NPA for allegedly having taken kickbacks from a suspected criminal.

  • South African Revenue Service (SARS): The SARS is legally mandated to collect tax revenues and ensure compliance with tax law. It runs a national Fraud and Anti-Corruption Hotline (see 'Whistle-Blowing' below). In September 2006, SARS appointed a special task team to work closely with other law enforcement agencies, after various forms of tax refund fraud were identified by SARS investigators. According to a 2007 SARS press release, this task team identified 55 suspects for investigation and arrested them over a period of 18 months. Of these, 20 individuals, including one SARS employee, were successfully prosecuted. Another 16 individuals were arrested and were awaiting trial. The prosecution of 17 others was under consideration by the National Prosecuting Authority (NPA). In addition, SARS conducts lifestyle audits of MPs and cabinet ministers when unexplained income and conspicuous consumption occurs. However, in March 2010, the Deputy President of South Africa rejected suggestions for further lifestyle audits underlining that the problem was not with anti-corruption mechanisms but rather with their effective implementation, BusinessDay reports.

  • International Complaints Directorate (ICD): The ICD is mandated to investigate any alleged misconduct of a member of the SAPS, as well as the Municipal Police Service with the purpose of promoting proper police conduct. This includes investigating allegations of SAPS officers being involved in any form of corruption.

  • Office of the Public Protector (Ombudsman): The Ombudsman has the power to investigate any suspected misconduct or prejudice in state affairs or in the public administration in any sphere of government. According to Global Integrity 2008, the office should have overcome the backlog of investigations that plagued the institution in the past. Public Protector Leonard Mushwana, a former ANC Member of Parliament, has been accused of obstructing investigations of senior ANC members. Yet, Global Integrity 2008 notes that the Ombudsman released a number of significant critical reports and that the government generally acts on the findings of the office. The institution receives regular funding to carry out its work, which amounted to approximately USD 8.6 million for the 2008/2009 financial year.

  • E-governance: E-governance is well-developed in South Africa and a large number of government offices have their own websites with information about their work. The South African Services website provides a one-stop shop for information about services offered by the South African government. Companies will find useful information and forms on business regulations and registration, taxes and online tax payments, licences and permits. The Government of South Africa has also launched a website for online access to government tenders (e-procurement).

  • Public Procurement: Built upon five pillars (value for money, open and effective competition, ethics and fair dealings, accountability and reporting, and equity), the General Procurement Guidelines regulate public procurement in South Africa. Furthermore, the Framework for Supply Chain Management is designed to deal with corruption in government tendering processes by ensuring oversight, and the Guide to the Prevention and Combating of Corruption Act provides regulations for blacklisting of companies. Numerous cases of corruption related to public procurement indicate that all administrative levels struggle with irregularities in public procurement and contracting, and the Institute for Security Studies 2007 describes the process of awarding tenders as 'notoriously opaque'. Moreover, a hearing before Parliament's Standing Committee on Public Accounts (SCOPA) on 6 July 2009 revealed that many government departments still lack the systems and skills to enforce the ethics and disciplinary standards applicable to public servants. Almost a year after an Auditor-General's report found widespread breaches of the Public Service Code of Conduct in the process of state procurement, a substantially large number of the public servants identified have faced no disciplinary action. Read more about how 'Public servants profit from state procurement' from the IDASA report. In addition, the BEE strategy, aimed at increasing the participation of black citizens in the South African economy, has been criticised for providing too much preferential treatment to wealthy black elites in relation to getting government contracts, which has lead to an increase in South African procurement corruption. For a critical assessment of the BEE strategy in relation to procurement corruption, see the Institute for Democracy in South Africa 2008. Nevertheless, the legal framework for procurement is generally evaluated as being strong on disclosure requirements and mandatory training for procurement officials, as well as for the possibility for unsuccessful bidders to access and challenge decisions. The national government has established an online Tender Bulletin and many provincial and local governments are following suit and providing online access to tenders. The 'Tenders' section on the website of the Government of Western Cape is a good example of e-procurement at lower administrative levels in South Africa.

  • Whistle-Blowing: The Guide to the Prevention and Combating of Corruption Act includes information on how to report corruption in South Africa. The National Prosecuting Authority (NPA) hosts a Service Delivery Hotline to which corruption, fraud and abuse of authority can be reported anonymously. Also, the Special Investigation Unit (SIU) has an e-mail based whistleblower hotline and the Public Service Commission (PSC) administers the National Anti-Corruption Hotline (NACH) under the Department of Trade and Industry to which individuals can report corruption by toll free telephone as well as by e-mail. The PSC reports that its hotline has had a considerable response from the public. The South African Revenue Service (SARS) also operates a 24-hour Fraud and Anti-Corruption Hotline (+27 080 000 2870) to which companies can report corruption related to tax administration. However, government departments have largely failed to take action on the complaints. Furthermore, despite the fact that the Protected Disclosures Act (PDA) officially protects whistleblowers within both the public and the private sector from retribution, they are in reality rarely protected from job demotion, discharge or other negative consequences.

  • General Comments on the Public Anti-Corruption Initiatives: South Africa's numerous anti-corruption agencies and laws indicate a strong political will and commitment towards combating corruption. However, many of the agencies and laws suffer from uneven implementation and overlapping mandates, which affects the operating ability of these initiatives and the enforcement of anti-corruption legal framework. After being elected, President Zuma stated that the fight against corruption would be a government priority. This is evident by his orders to 280 mayors to stop corruption and power squabbles in an effort to stop protests over the lack of basic services such as housing, water and electricity, as reported by BBC News. His government has also pledged to streamline procedures and provide an overall more efficient and democratic public service after what it calls the Batho Pele (Putting People First) principle. The fight against corruption will also need to be strengthened in the areas of public education and prevention of corruption. The Economist reports that measures already introduced by President Zuma's government include: 1) a new law to facilitate efficient and effective prosecution of corrupt officials, 2) a review of the ANC's 'deployment' policies to ensure that positions are based on competence and not just personal or political connections, 3) a ban on anyone holding public office from having links with companies doing business with the state for at least a year after leaving their posts, 4) tougher rules and much greater openness in the award of public contracts, and 5) better protection for local-authority accounting officers, who are often suspended or dismissed by their employers for conducting investigations. Furthermore, Reuters reports that, in February 2010, President Zuma ordered an external audit of state companies, after reports of mismanagement and political meddling had emerged in state-owned enterprises, in an effort to take faster action to curb corruption.

Private Anti-Corruption Initiatives

  • Media: Press freedom in South Africa is legally protected by Section 16 of the Constitution of South Africa and is generally respected in practice. According to Global Integrity 2008, media focus on corruption has never been as high as during 2008, peaking during now President Zuma's vicissitudes with justice. The study also reports that corruption in the private sector is less likely to be covered than political corruption. Freedom House 2009 reports that the government displayed a heightened sensitivity to media criticism in 2008, in some cases accusing journalists of racism and betraying the state. In addition, several apartheid-era laws remain in effect that permit authorities to restrict the publication of information about issues such as the police and the national defence forces, as well as to compel journalists to reveal sources. According to the Bertelsmann Foundation 2010, only 'hate speech' is prosecuted by law. In some instances politicians have attempted to intimidate journalists by threats of legal action. Political influence in the state-owned South African Broadcasting Corporation (SABC) led to journalists who voice criticism of the government being replaced by more loyal ANC supporters. Freedom House 2009 quotes the governance watchdog Global Integrity, and mentions that the government has threatened to withdraw advertising from newspapers that report on corruption and other scandals. Despite these problems, violation of press freedom is generally not held to be a major issue of concern in the country. Furthermore, Freedom House 2009 reports that there is a high level of digital media freedom in South Africa. Political content is not censored, and bloggers are not prosecuted for online activities. More people access the internet from their mobile telephones than from their computers. Nevertheless, the majority of the population is unable to benefit from internet access due to high costs and the fact that most content is in English, which is an obstacle for those who speak only local dialects. Reporters Without Borders 2010 ranks South Africa 33rd out of 175 countries, and Freedom House 2009 describes the country's press environment as 'free' and ranks it 66th out of 195 countries.

  • Civil Society: Civil society in South Africa is evaluated as 'strong' by Global Integrity 2008, mainly as a result of past mobilisation and politicisation of large groups against the apartheid regime. The South African constitution guarantees the freedom of association and free assembly. Furthermore, civil society, together with the media, is relatively well-organised and plays an important role in ensuring government accountability. Also, freedom of religion and academic freedom are guaranteed and South Africans are free to form and join independent trade unions as well as NGOs. According to the Bertelsmann Foundation 2010, although these rights are respected, the police have been accused of overreacting to illegal demonstrations in some cases. Isolated cases of candidate intimidation during electoral campaigns by opponents, but not by state agencies, have been reported.

  • Institute for Security Studies (ISS): The ISS is an applied policy research organisation with a dedicated anti-corruption programme. The ISS Organised Crime and Anti-Corruption Programme undertakes research on corruption and anti-corruption and produces a monthly newsletter on corruption in South Africa, the Umqol'Uphandle SA Corruption Briefing. The ISS houses the Information Portal on Corruption in Africa (IPOC in Africa), which provides research, links and surveys related to corruption in countries in Southern Africa.

  • Business Against Crime South Africa (BACSA): BACSA is a non-profit organisation established with the aim of supporting the government in the fight against crime, including fraud and corruption. It operates a Commercial Crime Programme, which supports the National Prosecution Authority.

  • Business Unity South Africa (BUSA): BUSA represents South African business on macroeconomic issues and has 49 business organisations as its members. BUSA has put together an information guide to help companies, especially SMEs, which are particularly vulnerable to corruption, to understand the anti-corruption laws in South Africa, where to draw the line, and how to build an ethical business. In response to the resolutions taken at the third National Anti-Corruption Summit, it has proposed a South African Charter of Ethical Business Practice, which it defines as an aspirational 'Business Code of Ethics' that could be applicable to the South African business community. It sets out what ethical business conduct means in the South African context, encouraging the business community to adhere to this charter, and provides a standard which can be cited when organised companies need to publicly indicate their moral stance on unethical practices related to South African business. In addition, it has put together anti-corruption information guides as starting points for both domestic and foreign entrepreneurs who want to invest in the country. Access the Anti-corruption guide for South African SMEs and/or the Anti-corruption Information Guide for Foreign Investors to South Africa.

  • Ethics Institute of South Africa (EISA): The EISA is an independent, non-profit organisation, which advocates for improved ethical practices, such as in relation to conflicts of interest and anti-competitive practices, in business behaviour and in public agencies. It runs various educational programmes and provides development and implementation services for ethics codes.

  • Institute for Democracy in South Africa (IDASA): The IDASA is an independent public interest organisation that advocates for the strengthening of public and private institutions, good governance and social justice. Although its work is not directly anti-corruption related, it has published a number of highly relevant research studies and articles on corruption in South Africa. Procurement Corruption (New Agenda 2008) is among the more recent studies.

Resources

The websites listed below provide useful facts on South Africa as well as contacts and tools for companies operating in South Africa:

 

Sources for further reading:

Conventions and Indices

OECD Anti-Bribery Convention Status: Entry into Force of Implementing Legislation 27 April 2004. Deposit of Instrument of Ratification 19 June 2007. Entry into Force of the Convention 18 August 2007.

This field describes the country's status on the OECD Convention on Bribery of Foreign Officials in International Business Transactions. Please note any declarations and reservations made upon ratification. View the list of signatories to the OECD Convention. Read more about the OECD Convention.

 

UNCAC Status: Signed 9 December 2003. Ratified 22 November 2004.

This field describes the country's status on the United Nations Convention against Corruption. Please note any declarations and reservations made upon ratification. The list of signatories can be found on the UNODC website. Read more about the UNCAC.

 

Other Relevant Conventions or Treaties:

 

Transparency CPI: 2009: 55/180 (Score: 4.7)

Transparency CPI
This field consists of the score for the country in question on the Corruption Perceptions Index from Transparency International as well as its ranking.

 

World Bank CORR Index (-2.5 - +2.5): 2008: +0.30

World Bank Corruption Index
This field consists of the score for the country in question on the 'Control of Corruption'-indicator in the World Bank Governance Research Indicator Country Snapshot (GRICS): 1996-2008.

 

OECD Country Risk Classification (0-7): 2010: 3

Country Risk Classification
The classification of countries by risk category has the aim of providing OECD countries with a basis for calculating the premium interest rate to be charged to cover the risk of non-repayment of export credits. Countries are placed in risk categories 0 - 7, with 0 being the lowest risk category and thus the least expensive. Conversely, premium group 7 is the highest risk category. Each classification is comprised of 2 components: 1) an assessment of the country's economic/financial situation, and 2) its overall political stability. Access the complete list of OECD Country Risk Classification figures.

 

Data Verification:

Latest update: November 2009

Data verified by: Global Advice Network

Information Network

 

Relevant Organisations

 

Institute for Security Studies (ISS)

Pretoria Office:
361 Veale Street
Block C, Brooklyn Court
New Muckleneuk
Tshwane (Pretoria)

Tel: +27 012 346 9500/2
Fax: +27 012 460 0998
E-mail: iss(at)issafrica.org

Cape Town Office:
67 Roeland Street
Drury Lane, Gardens
Cape Town 8001

Tel: +27 021 461 7211
Fax: +27 021 461 7213
E-mail: capetown(at)issafrica.org

An applied policy research organisation. Hosts the Southern African Information Portal on Corruption (IPOC).

Business Against Crime South Africa (BACSA)

Office Block No 2
Morning View Office Park
cnr Rivonia and Alon Road
Morningside

Postal Address:
P.O. Box 784061
Sandton, 2146

Tel: +27 11 883 0717
Fax: +27 11 883 1679
Contact Person: Deborah Hunt
E-mail: deborah(at)bac.org.za

BACSA is a non-profit organisation established with the aim of supporting the government in the fight against crime.

Business Unity South Africa (BUSA)

1st Floor
3 Gwen Lane
Sandton

Postal Address:
P.O. Box 652807
Benmore 2010

Tel: +27 11 784 8000
Fax: +27 11 784 8004 / 086 609 8248
E-mail busa(at)busa.org.za

BUSA is an organisation of 49 companies that represents South African business on macro-economic and high-level issues that affect it at the national and international levels, including ethical business practices and anti-corruption measures.

Ethics Institute of South Africa (EISA)

Hadefields Office Park
1267 Pretorius Street
Ground Floor, Block C
Hatfield
Pretoria 0083

Postal Address:
P.O. Box 2427
Brooklyn Square 0075

Tel: +27 012 342 2799
Fax: +27 012 342 2790
E-mail: info(at)ethicsa.org

EISA is an independent, non-partisan, not-for-profit organisation whose mission is to promote and advance ethical practices in companies and public policy.

Institute for Democracy in South Africa (IDASA)

Kutlwanong Democracy Centre
357 Visagie Street (corner Prinsloo)
Pretoria

Postal Address:
P.O. Box 56950
Arcadia 0007

Tel: +27 012 392 0500
Fax: +27 012 320 2414/5

IDASA is an independent public interest organisation promoting democracy, social justice and good governance.

 

Partner Embassies

 

Embassy of Denmark

iParioli Office Park, Block B2
Ground Floor
1166 Park Street
Pretoria

Tel: +27 12 430 9340
Fax: +27 12 342 7620
E-mail: pryamb(at)um.dk

Embassy.

Embassy of Norway

iParioli, Building A2
1166 Park Street
Hatfield 0083

Tel: +27 12 342 6100
Fax: +27 12 342 6099
E-mail:emb.pretoria(at)mfa.no

Embassy.

Embassy of the Netherlands

210 Queen Wilhelmina Avenue
New Muckleneuk 0181
Pretoria

Tel: +27 12 425 4500
E-mail: pre(at)minbuza.nl

Embassy.

Embassy of Sweden

iParioli Complex
1166 Park Street
Pretoria

Postal Address:
P.O. Box 13477
Hatfield 0028

Tel: +27 12 426 6400
Fax: +27 12 426 6464
E-mail: ambassaden.pretoria(at)foreign.ministry.se

Embassy.

British High Commission

255 Hill Street Arcadia
Pretoria 0002

Tel.: +27 12 421 7500
Fax: +27 12 421 7555
E-mail: satrade(at)fco.gov.uk

High commission.

Embassy of Austria

1109, Duncan Street
Brooklyn
Pretoria 0181

Postal Address:
P.O. Box 95572
Waterkloof 0145

Tel: +27 12 452 9155
Fax: +27 12 460 1151
E-mail: pretoria-ob(at)bmeia.gv.at

Embassy.

Country Profile Sources

General Information Sources

Corruption Levels Sources

Judicial System

Police

Licences, Infrastructure and Public Utilities

Land Administration

Tax Administration

Customs Administration

Public Procurement and Contracting

Environment, Natural Resources and Extractive Industry

Public Anti-Corruption Initiatives Sources

Private Anti-Corruption Initiatives Sources