The South African government plans to enact legislation that will make it possible to prosecute South African companies accused of corruption in foreign countries.

The move, announced by the cabinet yesterday, will bring SA into line with international efforts to fight corporate bribery, while giving impetus to the New Partnership for Africa’s Development, which has opened opportunities for South African companies elsewhere on the continent. This follows comments this week by Public Enterprises Minister Jeff Radebe, who called for South African companies operating elsewhere in Africa to make sure they were ethically beyond reproach and to act in such a way that they would not be deemed the “new imperialists”. Radebe said government was considering a special code of conduct for state-owned companies operating in other parts of Africa, and trusted “that most in the private sector would agree with our approach”.

While organised business said it would welcome the cabinet’s proposed initiative, it called for avenues other than legislation to be explored.

James Lennox, CEO of the South African Chamber of Business, cautioned government about being too hasty to legislate without carefully studying internationally accepted norms and the legal definitions of bribery.

A “normal dinner or lunch” set up in an attempt to understand the basic requirements to set up a business in a particular country could easily be misconstrued as bribery, Lennox said.

“We must also call on government to be careful not to just punish one party on the basis of an untested allegation and leave the other . This may be a noble idea, but it will be extremely difficult to prove because it would involve extraterritoriality,” he said.

The cabinet recommended that the cabinet sworn in after next month’s election initiate the process of bringing SA into line with the convention of the Organisation for Economic Co-operation and Development on combating bribery of foreign public officials in international business transactions.

Cabinet spokesman Joel Netshitenzhe said the convention that government would seek to follow bound member nations to “full transparency in international commercial dealings and seeks to root out corrupt business practices”.

“There will be thorough research of our legal system as it stands and that will inform the nature of legislation that will be formulated to bring the country in line with the convention,” he said.

The importance of efforts to fight corruption by companies operating in foreign countries has been highlighted in recent years by the Lesotho government’s efforts to bring companies to book for bribes paid to secure contracts on the Lesotho Highlands Water Project.

The CEO of the Lesotho Highlands Development Authority, Masupho Sole, is in jail after being found guilty of receiving bribes totalling R12m from a number of international companies.

Meanwhile, Netshitenzhe said the cabinet had also earmarked about R200m for promoting SA as the preferred offshore destination for business process outsourcing.

The cabinet approved an incentive package aimed at making SA even more competitive. It would include the development of humanresource capacity.

Hopewell Radebe, Business Day (Johannesburg), April 1, 2004