Corporate accountability in South Africa: Sharpening the role of criminal law

• Jurisdiction: South Africa
• Pages: 225-246
• Published date: 24 May 2019
• Date: 24 May 2019
• Author: John Paul Ongeso

Corporate accountability in South

Africa: Sharpening the role

of criminal law

JOHN PAUL ONGESO*

ABSTRACT

South Africa’s Crim inal Procedure Act 51 of 1977 adopts a derivative model

of establishing corp orate liability. This ar ticle argues that th is model has a

number of limitat ions that render it ineffective for corp orate accountability

for serious human rights violat ions and crimes. It considers an a lternative

model of non-derivative cri minal liability and discu sses how this may apply

to the South Afric an context through its inclusion in the Act. T his article also

draws from legislative schemes in t he United Kingdom and Austr alia that

have incorporated non-der ivative models for corporate crim inal liabilit y.

1 Introduction

South Africa has a n elaborate regime for the criminal l iability of

corporations in relation to occupational health and sa fety, antitrust,

environment, corruption and briber y.1 Despite this, there is increasing

awareness of the need to reconsider the role of criminal l aw with

respect to corporate accountability for two mai n reasons.2 First, over the

last few decades the nature of corporations ha s evolved signicantly,

* LLB (cum laude) LLM PhD (Wits), Post-doctor al Research Fellow at the South Af rican

Institute for Advanced C onstitutional , Public, Human Right s and Internationa l Law

(SAIFAC), University of Johannesburg, Sout h Africa. I am g rateful to Prof David

Bilchitz and Ra isa Cachalia for thei r comments which have helped to i mprove this

article. Tha nks also to Prof Flor ian Wettstein and Dr D orothée Baumann -Pauly for

inviting me to present a n earlier version of this paper in March 2 016 in an intensive

two-day rese archer’s summit on Bu siness and Human R ights at the Instit ute of

Business Ethic s, University of St Gal len, Switzerland.

1 Examples include: s 73A of the Competition A mendment Act 89 of 1998 (price -

xing, market div ision or collusive tendering, i n force on 1 May 2016); s 20 of

the Environment Co nservation Act 73 of 1989 (operati ng a waste disposal site

without a permit); s 24 of the N ational Environmental Managemen t Act 107 of 1998

(commencement of a propert y development without an environ mental authorisat ion);

s 24 of the Occupational He alth and Safety Act 85 of 1993 (injuries in the workplace

including culpable hom icide) and s 3 of the Prevention and Combati ng of Corrupt

Activities Act 12 of 20 04.

2 As can be gleaned from the title, c riminal law do es play a role in enhanci ng

corporate accountabi lity in South Africa. W hat this article contends is that t his role

can and should be rein forced in view of the dyn amic structure of corporat ions.

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(2016) 29 SACJ 225

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adopting increasingly complex and diffuse orga nisational struct ures.3

This challenges the trad itional models that have been used to hold them

accountable.4 Globally, there has thus been greater focus on improving

these models to suit the struct ure of corporations.5 Second, there is

recognition that there is a close connection bet ween the regulation of

corporations and the protection of human r ights.6 Where there is little

or no regulation – often due to the lack of resources or will on the

part of the state – there is a gr eater propensity for corporate human

rights violations and crime.7 The more adapted models for liability

are to complex corporate structures, t he greater their effectiveness in

holding corporations accou ntable.

This article cr itically analyses the cur rent model for establishing

corporate crimin al liability in South A frica’s Criminal Procedure Ac t.8

It argues that its focus on the conduct of individual employees is

not particularly usef ul and nor is it effective in holding corporations

accountable.9 It suggests an alternative model that can accommodate

organisation al fault.10 Though this ar ticle discusses the establish ment

of corporate liability for cri mes and not liability for human rights

violations, there is a clear connection between the t wo.11 Though the

latter are not always crimes, certa in human rights violations merit

the application of criminal law due to their eg regious nature. In such

3 J Gobert ‘Corporate crim inality: Four models of fault’ (1994) 14 Legal Studies 393 at

395.

4 See Allens Arthur Robi nson ‘Corporate culture’ a s a basis for the criminal liability

of corporations (Report prepa red for the United Nations Spec ial Representative

of the Secretar y-General on Hu man Rights and Busi ness, 2008) at 1, available at

https://business-humanrights.org/sites/default/les/reports-and-materials/Allens-

Arthur-Robinson-Corporate -Culture-paper-for-Rug gie-Feb-2008.pdf, accessed on

26 July 2016.

5 Allens Report op cit (n4) part 1.

6 See A Nolan ‘Addressing economic and social right s violations by non-st ate actors

through the role of t he state: A comparison of regional appr oaches to the “Obligation

to Protect’’ (2009) 9 Human Rights L Re v 225.

7 S Ratner ‘Corporations and huma n rights: A theory of leg al responsibilit y’ (2002)

111 Yal e L J 443 at 461.

8 Act 51 of 1977.

9 L Jordaan ‘New perspectives on the cr iminal liability of cor porate bodies’ (2003) 16

Acta Juridica: Crimin al Justice in a New Society: Essays in Honour of S olly Leeman

48 at 66–7; J Burchell Prin ciples of Criminal Law 3ed (2005) 5 65.

10 See L Boonzaier ‘ State liabilit y in South Afr ica: A more direct approach’ (2013) 130

SALJ 330 at 361 where the author p oints to the fact that ‘acade mics have agitated

increasingly for a model o f corporate crim inal liabili ty that can accommo date

organisationa l fault’.

11 See A Ramasa stry & RC Thompson C ommerce, Crime and Conict: Legal Rem edies

for Private Sector Lia bility for Grave Breache s of International L aw: A Survey

of Sixteen Countr ies (2006) 9-11, available at http://www.fafo.no/index.php/en/

publications/fafo-reports/item/commerce-crime -and-conict, accessed on 26 July

2016.

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