Daily power interruptions plunge South Africans into darkness. These are a vivid reminder of the devastation wrought by years of state capture on Eskom, the state-owned power utility.
Eskom’s incapacity to meet residents’ and the economy’s energy needs is now an incontrovertible illustration of how state capture rendered parastatals and other state institutions useless. Urgent action is required to retrieve the stolen funds and stabilize the economy.
President Cyril Ramaphosa has thus far provided only a few broad objectives, and the results have been disappointing. For instance, the “total of R2.9 billion” seized by law enforcement authorities is a small fraction of the R500 billion estimated to have been plundered through state capture. Impunity is the source of this mess.
The culture of impunity has persisted since Jacob Zuma’s administration. To replace it with a new era of ethics and accountability, much more work is required. But what, and just how?
In this paper, I respond to this question by presenting a constitutionally compliant, feasible plan. I set the groundwork for a new anti-corruption redress system that would assist the government in recovering the money and restoring the dignity of the South African people.
My argument begins with the premise that the constitutional separation of powers — the division of state authority and essential responsibilities – includes a fourth state branch. It should be referred to as the “integrity and accountability branch” and include the prosecutorial authority.
When this unique function of the prosecuting authority is comprehended, prosecutorial policy can be utilized to begin recouping illicit state capture profits. This should commence immediately, pending the requisite legislative intervention, with the employment of the internationally recognized form of remedy, out-of-court settlement. This tool is adaptable to the constitutional situation of South Africa.
Non-trial resolutions are alternatives to a full criminal trial for resolving corruption cases. “Beyond a reasonable doubt” is an arduous bar of proof in criminal prosecutions. They also tend to be lengthy and expensive to maintain. Cases of economic corruption are notoriously difficult to prosecute because to the complexity of the deception, which frequently crosses international borders.
Non-trial resolutions come in a variety of forms and are widely utilized internationally. Included are a plea deal, a deferred prosecution agreement, a non-prosecution agreement, and a less formal declination to prosecute (for example, by way of letter).
To guarantee local relevance and credibility, these instruments should be referred to collectively as “anti-corruption redress mechanisms.” In my paper, I explain how and why it would be constitutional to begin reaching such non-trial agreements with state capture offenders pending the adoption of the anti-corruption restitution system I propose through legislation.
Section 38 of the National Prosecuting Authority Act of 1998 may be utilized through the issuance of prosecutorial policy (e.g., directives) for the time being. It permits the prosecuting authorities to utilize experts (such as forensic and legal professionals) in “specific cases.”
State capture is unquestionably a “specific case” that merits particular consideration. Thus, Section 38 could be utilized to enter into deferred prosecution agreements or other anti-corruption reparation agreements. These would be concluded with individuals or organizations that self-report their unlawful gains or are identified by whistleblowers. Thus, money can begin returning to the public coffers sooner rather than later.
These agreements would outline the restitution deliverables (such as paying the money back by a particular date and rehabilitating the looted entity) as well as the parties’ other rights and obligations. At this juncture, no sanctions for misconduct should be applied, as the law presumes innocent unless proven guilty.
To restate, however, recovering the ill-gotten gains from state capture can begin immediately (via prosecutorial policy). This portion of my plan is influenced by the articulation of the “no profit, no loss principle” by former Constitutional Court judge Johan Froneman in the 2014 case of All Pay 2.
The essence of this theory is that, while penalties cannot be applied without the appropriate application of the law, public accountability means that there is no right to profits illegally obtained. The reports of the Zondo Commission contain information on who benefited illegally.
While the above-described disgorgement (return) of unlawful gains is initiated, the groundwork can be prepared for more substantial legislative reform. The third component of my proposal is the following. According to the Zondo studies, the government does not require entirely new legislation on non-trial resolutions.
Rather, it should alter Section 38 of the National Prosecuting Authority Act of 1998 in order to implement the comprehensive anti-corruption reparation system. As part of this structure, an anti-corruption redress body would exist, maybe as a subsection of the current Specialized Commercial Crimes Unit of the prosecuting authority. It would require the appropriate combination of specialists. Cases would be decided based on the lower civil standard of proof: “the preponderance of the evidence.”
The legislative intervention must include administrative consequences (basically civil monetary penalties). These should be a proportion of the illegal profits the party reaped from the corrupt transaction. In the country’s competition and environmental law regimes, administrative fines are already in use. They can strengthen deterrence and reparation.
STATE CAPTURE COUNCIL
In a specific instance, the proposed commission would determine the proper reparation measures. It would assess “redress balance” elements such as the severity of the harm, the likelihood of a future offense, the willingness to make reparations, and the defendant’s good faith. Thus, there may be an agreement to defer (delay) criminal prosecution provided the offender demonstrates good faith, cooperates, and fulfills all payback (and other restitution) responsibilities. The commission’s findings would be subject to review by a tribunal of record, similar to the competition tribunal.
In conclusion, the proposed anti-corruption restitution system is ultimately about achieving the correct balance between retributive and restorative justice in order to restore the dignity of the South African people. It would help rebuild public trust in government, reduce impunity and usher in an era of enhanced integrity and accountability. Now is the moment to take action.
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