Most Read Contributor in South Africa, September 2016
ENSafrica's third annual anti-bribery and corruption
("ABC") survey has revealed that 39% of
respondents have experienced incidents of bribery or corruption in
the last 24 months. The key question addressed in the survey was
whether or not companies are putting proportionate measures in
place to deal with the rising risks of bribery and corruption.
During the survey, information was collated from 132 respondents
(which marks a 50% increase from the 2015 survey). The increase is
indicative of the increased awareness of, and interest in, ABC
(especially in Africa). The vast majority of respondents indicated
that they do business in Africa (83%), and 26% of respondents
indicated that they do business in the United States
("US") and in the United Kingdom
("UK"). The respondents came from a
broad range of industries, with financial services comprising the
biggest sector (25%), followed by manufacturing, retail and
wholesale (24%). Respondents also indicated that they worked in the
oil, gas and energy; consulting; telecommunications; mining;
transport; IT and electronics; and tourism sectors.
At first glance, the results may suggest that companies are
committed to combating the risks of bribery and corruption, with
92% of respondents believing that their companies demonstrated a
culture of compliance and 90% indicating that their companies had
an ABC policy in place. However, these positive findings were
contradicted by the absence of certain important ABC measures. Key
concerning findings include the following:
15% of respondents indicated that
their companies did not conduct due diligence on merger and
28% of respondents said that due
diligence screening was not done on new employees
30% of respondents indicated that
their companies did not have an ABC compliance programme in place
(although certain respondents indicated that such programmes were
in the process of being put in place)
34% of respondents indicated that
they did not believe sufficient resources and funding were
dedicated to the compliance function
35% of respondents indicated that no
due diligence screening was done on third parties
44% of respondents said that there
was no dedicated ABC training at their companies
47% of respondents said that no ABC
risk assessment had yet been done at their companies (although
certain respondents indicated that such risk assessments were
planned for the future)
79% of respondents indicated that
their companies did not provide ABC training to third parties,
despite the fact that 76% of respondents indicated that the most
significant ABC risk faced by their companies was the use of third
The key findings suggest that a regulator may perceive the
commitment of certain companies to ABC as being superficial and
unable to pass muster if placed under scrutiny. This could in turn
expose companies and senior management to significant legal
For some corporates operating in Africa, there may be a
prevailing view that compliance with ABC laws is simply too costly
and that business cannot be effectively conducted if stringent
controls were to be put in place and enforced. However, former US
Deputy Attorney General Paul McNulty is quoted as saying: "If
you think compliance is expensive, try non-compliance." In
line with this statement, regulators have been dishing out
staggering fines in recent years (with US and UK regulators leading
the charge). Furthermore, the FBI's arrest of Samuel Mebiame,
the son of a former Gabonese Prime Minister, in August 2016 for
allegedly paying bribes on behalf of a US company in Zimbabwe, the
Congo and Libya, re-affirms the focus of US regulators on bribery
Corporates that believe they can escape the jurisdiction of
foreign regulators should be cautious as ultimately there is a
global wave of change towards zero tolerance to non-compliance.
When it comes to corrupt activities, prevention is better than cure
and ABC compliance should be non-negotiable for all corporates
operating in Africa.
A detailed summary of the 2016 survey's key findings and the
implications thereof is available here.
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