Artificial Intelligence (AI) is reshaping the way South African organisations interact with customers, analyse business data, and manage operations. From automated credit assessments to machine-driven recruitment, algorithms are taking on decisions that once required human judgment. Yet, this reliance on AI prompts a critical question: Who is accountable when the algorithm gets it wrong?
In South Africa, the need for clarity around accountability is heightened by several recent legal and regulatory developments. The Protection of Personal Information Act (POPIA) demands responsible data handling, and failure to comply can lead to reputational harm, financial penalties, and even litigation. Meanwhile, ongoing discussions about potential AI-focused regulations place further emphasis on transparency and fairness – key components of King V's corporate governance principles, which encourage ethical leadership and stakeholder inclusivity.
South African courts are increasingly examining the role of automated systems in business decisions. If an algorithm discriminates – perhaps denying credit based on inaccurate or biased data – both reputational and legal repercussions could follow. To avoid such pitfalls, organisations must understand how their AI tools process data and must ensure there is a mechanism to audit, review, and correct any unfair outcomes.
Strategies for South African Organisations
- Embed Accountability in Contracts: When procuring AI solutions – particularly from foreign vendors – spell out who is responsible for maintaining compliance with POPIA, who will handle data breaches, and how liability will be allocated if the software fails to perform as expected.
- Conduct Routine AI Audits: Regularly assess the fairness of algorithmic decisions and their alignment with local laws. Even though dedicated AI legislation in South Africa may still be on the horizon, it is wise to document that thorough oversight is in place – especially in sectors like finance or healthcare where errors can be far-reaching.
- Empower an Oversight Committee: Consider forming an internal cross-functional committee that includes IT, legal, compliance, and business stakeholders. This group can oversee risk assessment, provide ethical input, and ensure AI tools align with both corporate strategy and relevant SA legislation.
Defining who holds ultimate accountability for AI-driven decisions remains an evolving area of law in South Africa. By proactively establishing contractual clarity, auditing their algorithms, and adhering to POPIA and corporate governance principles, businesses can protect themselves while harnessing AI's transformative potential.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
