Non-compliance with fraud and corruption prevention legislation a major risk



Parliament.jpgWhilst the word “risk” is fast becoming a cliché, it has increasingly important connotations for organisations owing to the plethora of legislation both here and internationally aimed at preventing fraud and corruption, says Alan Low of Purchasing Index (PI) in this month’s SmartProcurement.

Local legislation includes:

• Prevention of Organised Crime Act (POCA) – 1998
• Protected Disclosures Act (PDA) (“Whistleblowers Act”) – 2000
• Financial Intelligence Centre Act (FICA) – 2001
• Prevention and Combating of Corrupt Activities Act (PCCAA) – 2004

Additionally, the UK Bribery Act (2011) and United States Foreign Corrupt Practices Act (1977) have provided SA’s most prominent trading partners with effective teeth to attack corruption globally. The USA authorities have made it plain that irrespective of the country they will find a way to pursue corruption, carried out anywhere in the world, in US courts!

Section 43 of the new Companies Act (2011) obliges all state-owned and listed public companies and private companies above a certain size to set up a Social and Ethics Committee to implement the Organisation for Economic Co-operation and Development’s (OECD) recommendations on preventing corruption. This includes the development and implementation of organisation-wide controls, ethics and compliance programmes for preventing and detecting bribery. Many SA companies are still unaware of these obligations.


AlanLow_latest.jpgRecently a large SA company trying to do business with a US organisation was asked to confirm and provide proof that it had in place the necessary controls to prevent corruption; it could provide proof of conformance to only 20% of the requirements.

Whether your organisation has implemented all of the above or not, there is an urgent need to apply particular caution and stringent oversight to all procurement transactions, whether local or international. This includes:

• scrutiny of all new (and existing) suppliers to ensure that they are who they hold themselves out to be;
• investigating the technical and personal preferences of internal customers to ensure that the resulting transactions meet the highest probity and ethical standards; and
• ensuring that, in the absence of policy, offers or promises of gifts, entertainment or travel meet the following criteria:

 1. Not given to influence or reward action (or inaction).
 2. Serve only a legitimate business purpose.
 3. Would not embarrass the organisation.
 4. Are appropriate in value and nature considering the local law and custom, the position of the recipient and the circumstances.

Analysis tools and services are now available that can help you by providing transparency within and outside your organisation. These include advanced real-time analysis tools with algorithmic functions to highlight high-risk transactions and external services that show relationships between staff and suppliers to three degrees of remoteness.

It is important to remember that ignorance of the law is not an acceptable defence in court and that there is no statute of limitations for criminal acts.

For more information on analysis tools and services contact PI’s Alan Low

Leave a comment

SmartProcurement Newsletter

Please enter your details below to receive the SmartProcurement Newsletter for FREE on a regular basis.

As part of the SmartProcurement Newsletter you will be receiving World Class Procurement News, Tools, Tips, Tactics, Procurement Training updates, Upcoming Events, and the latest Procurement Career Openings.

* Email Address:
* Title:
* First Name:
* Surname:
* Company:
* Country:
* Public / Private:


Career opportunites

Trade Compliance Senior Analyst

  • <500 000 >500 000 Analyst Buyer Gauteng Permanent
Trade Compliance Senior AnalystLocation – Rosslyn, South AfricaThe ...More

Logistics Controller

  • >500 000 Gauteng Logistics & Warehousing Operations, Planning & Inventory Permanent
Based in Stellenbosch, South Africa’s leading fruit exporter ...More


  • >500 000 Gauteng Permanent Procurement Management Strategic Sourcing
(Total Cost to Company R900k – R1.2mil) includes ...More

Category Manager Logistics

  • >500 000 Gauteng Logistics & Warehousing Permanent Projects / Category Management
(Total Cost to Company R900k – R1mil) includes ...More

Group Procurement Manager

  • >500 000 Gauteng Permanent Procurement Management
Location: Johannesburg .Cost to Company R1.2mil – R1.4mil excluding ...More

Procurement Analyst

  • <500 000 Analyst Gauteng Permanent Procurement Officer / Specialist
(Total Cost to Company R200K – R400K)We are ...More

Industrial Engineers

  • <500 000 >500 000 Gauteng Industrial Engineer Permanent Strategic Sourcing
(Total Cost to Company R400K – R550K)We are ...More

Category Manager Packaging

  • >500 000 Gauteng Permanent
Location: Johannesburg Cost to Company R1mil – R1.4mil ...More

Category Manager Packaging

  • >500 000 Gauteng Permanent
Location: Johannesburg Cost to Company R1mil – R1.4mil ...More

Category Manager Packaging

  • >500 000 Gauteng Permanent
Location: Johannesburg Cost to Company R1mil – R1.4mil ...More

Category Manager Packaging

  • >500 000 Gauteng Permanent
Role: The Category Manager will be responsible for ...More
Location: Johannesburg Description: To develop and manage relationships ...More
Location: Johannesburg Description: To develop and manage relationships ...More

Global Commodity Manager: Mining Commodities

  • Commodities Gauteng Permanent
Location: Johannesburg Description: Ensuring continuity of supply ...More

Global Commodity Manager: Mining Equipment

  • Commodities Gauteng Permanent
Location: JohannesburgDescription: The commodity manager is accountable for ...More

Mining Project Manager

  • Gauteng Permanent Projects / Category Management
Location: Johannesburg.Description : Responsible for successful implementation and ...More

Mining Project Manager

  • Gauteng Permanent Projects / Category Management
Examples of high impact initiatives are Equipment Automation, ...More

Supply Chain Manager

  • <500 000 Gauteng Permanent Projects / Category Management Supply Chain
R 650 000 –R 800 000 CTC pa GautengA ...More

Operations Manager

  • <500 000 Gauteng Operations, Planning & Inventory Permanent Procurement Management
R 600 000 – R 700 000 CTC ...More

Procurement Specialist

  • <500 000 Gauteng Permanent Procurement Consultant Procurement Officer / Specialist
R 500 000 – R 550 000 CTC ...More