Arising out of my appearance before the Justice and Constitutional Development Portfolio Committee on 1 August 2002 and as requested by the chairperson Mr J de Lange, I hereby make my submissions on the Bill in my capacity as citizen of the country, a director of Attorneys Werksmans Incorporated, Johannesburg and as Chairman of the Jockey Club of Southern Africa

2 THE PHILOSOPHY OF THE BILL

2.1 The purpose and object of the Bill as enunciated in the preamble, commendable and needs no debate. However, my concern is that t Bill "throws the baby out with the bath water". The core issue is what constitutes "corruption". The word corrupt is generally understood mean as being dishonest, crooked or fraudulent. Fraudulent mea deliberate deception, trickery or cheating to gain an advantage. I accept that the word corrupt may also connote tack of integrity and unethical behaviour, having regard to the boni mores of the community. but that not how the word corrupt is generally understood.

2.2 By criminalising the breach of commercial transactions, the Bill Is In those respects draconian and counter productive with far reaching consequences that are unwarranted. In the pursuit of the honourable zeal to prevent corruption, one must guard aganst legislation designed to be the moral conscience of society. A clear distinction must be drawn between the business person who acts fraudulently or crookedly in a commercial transaction by say deliberately falsifying material information relating to his company to gain financial advantage which is designed to and results in toss and prejudice to the other contracting party and the business person who unethically reneges from a contract to gain some financial advantage. Neither I nor society approve of unethical behaviour, but does such conduct warrant prosecution and a possible jail sentence? This is over-kill.

3.1 In my view the following examples taken at random of conduct by A will constitute a criminal offence in terms of the Bill as it is presently drafted, wilt result in a conviction and a possible jail sentence.

3.1.1 A sells his house to B. Prior to transfer, A receives a higher offer of say a mere P10000 from C, he takes legal advice as whether he can cancel the contract, cancels the contract and sells to C for the higher consideration, notwithstanding that he advised that there are no valid grounds to cancel the contract even if he is advised that the contract is invalid in that it does n comply with the Alienation of Land Act.

3.1.2 A is employed by B and is subject to a restraint provision applicable during his employment for a limited period and within limited area after the termination of such employment. C, competitor of B approaches and encourages A to termination employment contract and breach the restraint provision

offering A employment at a higher salary. C may also be guilty a criminal offence.

3.1.3 B, a single person, has a sexual relationship with A who is engaged to C. Under the guise of "love", he makes an offer to A of a necklace worth R1 000 and a lifestyle more luxurious a comfortable than she is enjoying with C if she cancels her engagement contract with C and lives with B. A breaches her promise to marry C.

3.2 Can it seriously be contended that the aforementioned conduct, morally reprehensible as it is or may be, should trigger a criminal trial with all its trauma and a criminal conviction with all its horrendous consequences?

3.3 Further consequences are clear to see, namely -

3.3.1 the Bill will be abused by malicious people and even if there is no conviction, measurable harm will have been done to the accused;

3.3.2 the Criminal Justice Department will have to be substantial enlarged;

3.3.3 the prime purpose of the Bill "to catch a crook" will be diluted;

3.3.4 the jails will not be able to cope with the new number ''criminals''!

3.3.5 the economy may well come to a standstill because a arc section of the commercial community may be in jail and the "crooks" will have greater opportunity to continue with their corrupt and fraudulent conduct!

4 SPECIFIC COMMENTS ON THE BILL AS PRESENTLY DRAFTED

4.1 Name

For the reasons set out above, the name is a misnomer and should I called "Prevention of Corruption and Unethical Bill".

4.2 Ad clause 1(iv)

4.2.1 The definition negates the very meaning of the word "corrupt" it is generally understood to mean acting crookedly and. fraudulently. Thus, if a person commits a traffic offence breaches an employment contract by arriving at work at 10.00 opposed to the contractual time of 08.00 or if a jockey negligently breaches a race riding rule by intimidating or causing interference to another horse in a race, then such person has acted corruptly. Such conduct, whilst in breach of the contract or rule, is the v antithesis of acting corruptly if one gives the ordinary meaning that word Admittedly, the corruption of the word does not per give rise to a criminal offence. In addition, such conduct must be linked to giving or receiving any gratification as an inducement to do or not to do anything or as a reward for having done or not having done anything but the definition of "corruptly" violates the ordinary meaning of the word and this should be avoided.

4.2.2 The definition of "corruptly" is vague, repetitive and will give rise to endless litigation in regard to its interpretation.

4.2.3 The definition does not prohibit contravening any law as it refers only to the contravention of "... the spirit of any law" which is a vague meaningless statement; what is meant by "... procedure, process, system, policy, practice, directive or order"? Who determines for example, policy, whhat if such policy is disputed and what is the ambit of such policy?

4.2.4 The reference to "any employment relationship" in (a) is included in "any agreement" referred to in (c). Why single out any employment relationship which can only be governed by an agreement?

4.2.5 What is meant by "the performance of any function in whatever capacity"?

4.2.6 If the existing definition must be retained notwithstanding m submissions, then at least the definition should simply read "corruptly" means in contravention of the common andlo statutory law pertaining to -

(a)any agreement; or

In regard to earlier submissions on the philosophy of the Bill, I do not se the need to define "corruptly" at all as its meaning is clearly understood and the word has been the subject matter of judicial interpretation. Alternatively, I suggest the following definition-

"corruptly" means any crooked or fraudulent conduct in contravention of any law pertaining to -

(a)any agreement; or

(b)any sporting event including the contravention of the constitution and/or rules and/or code of conduct of any sporting body which stages any sporting event and/or of any regulatory body under whose constitution and/or rules the sporting event is conducted".

4.3 Ad clause 1(v)(a)

I suggest that in the definition of "dealing" after the word "sale" in the first line, the following be inserted "barter, exchange".

4.4 Ad clause 1(vii)(B)

The typographical error "change" must read "chance". Please note that the same amended must be made in item 14A of Chapter 2 reading "Offences and Penalties" corresponding to page 3 of the Bill.

4.5 Ad clause 1(viii)

4.5.1 The definition of "gratification" is too wide and vague in sever respects. I suggest the following amendments to 1 (viii) (a)-

4.5.1.1 delete "money or";

4.5.1.2 insert after "any donation" the word "or"

4.5.1.3 delete the words "loan" and "valuable security".

Reason - there is no element of gratification in a loan unless it is devoid of commercial considerations such as interest free and repayable or after say thirty years. Preferable wording would be "disguised unbusinesslike loan" - the use of the word "money" is meaningless.

4.6 Ad clause 1(viii)(c)

This clause is vague and clumsy. I suggest the following substitution thereof "(c) the offer of any office, employment, residential and/or holiday accommodation".

4.7 Ad clause 1(viii)(e)

The word "valuable" should be deleted and be substituted by "non valuable"; the word "or" in the first line before the phrase "any discount" should be deleted and be substituted by the word "including".

Reason - There can be no gratification if a valuable consideration is given - there is a clear contradiction. Thus, if an employee contracts for a bonus based upon performance, i.e valuable consideration, this can hardly render the employee subject to criminal sanction.

4.8 Ad clause 1(vili)(h)

I suggest that this phrase be deleted and be substituted by the following "(h) the grant of any unlawful right or privilege".

4.9 Ad clause 1(xi) read with clause 1(xiii)(a)

The definition of "partner" should be deleted and be substituted by the definition of "spouse" to simplify matters and in any event, the existing definition of partner is not sufficiently wide. Furthermore, the reference should be a spouse as defined at the time of the commission of th alleged offence and which person may be a different spouse to the accused as at the time of the trial, which may be several years after the occurrence of the offence. I accordingly suggest that after "sporting event" the following definition of spouse be inserted; "spouse" - means married person or a partner who cohabits and lives with another person as if married in a heterosexual or same sex relationship as at the time the commission of the offence(s)". It then follows that a consequent amendment will be made to the definition of "relative" in clause 1 (xiii)( by deleting the word "partner".

4.10 Ad clause 3(1)

The alternative proposal is preferable, although there is not much in it

suggest that in the second line after "agrees to accept, the following

phrase be inserted "... or offers to accept".

Reason - the offer of any gratification as an inducement to act corruptly should in itself be an offence even if it was not accepted by the offeree.

If the alternative sub-section is introduced, it will follow that the heading will be changed to read "Offence of accepting gratification corruptly".

4.11 Ad clause 4

See my comments in paragraph 4.10. It follows that in the second line after the phrase "agrees to give", the following should be inserted "... or offers to give..."

Thus, if a person offers any gratification corruptly to the offeree and thc offeree rejects the offer, the conduct of the offeror should still be subject to criminal sanction.

4.12 Ad clause 14(1)(a)

Similarly, in the second line after "agrees to accept", the following phrase should be inserted "... or offers to accept...

4.13 Ad clause 14 1(b)

Similarly, in the first line after "agrees to give", the following phrase should be inserted "... or offers to give

4.14 I suggest that the following additional clause 14(1)(d) be inserted -

"14 1(d) engages in any malpractice or misconduct which constitutes a threat to or undermines the integrity of any sporting event, which shall include any person be he/she directly or indirectly a party to and/or assists a person in the commission of the any such offence."

Reason - the justification for the extension of the ambit of corrupt conduct is to protect the people who wager bets on the outcome of sporting events and to ensure that competitors are not at a disadvantage. The punter is entitled to protection and support for his belief that the outcome of a sporting event will be on merit in which the best team, athlete or animal wins the sporting event. It is preferable to have a "belts and braces" approach to discourage dishonest conduct in sporting events. Apart from betting on sporting events by way of example, the purse for a winning owner, trainer and boxer and the stakes for a winning owner, trainer and jockey are today far more substantial and likely to increase in the future. Thus, the temptation or malpractice will be increased and must accordingly be discouraged by appropriate legislation.

5 An additional clause should be inserted in the Bill reading as follows -

10 (1) A person is guilty of an offence if he or she directly C indirectly, corruptly gives or agrees to give to any participant in, official or employee of any sporting body engaged in the conduct and/or regulation of any sporting event an gratification as an inducement to or as a reward for -

(a) engaging in any malpractice or misconduct which constitutes a threat to or undermines the integrity any sporting event;

(b) failing to report the facts together with the name the person or persons concerned to the managing director, chief executive officer or any other persons holding a similar post in the relevant sporting hoc and/or regulatory authority concerned or at his her nearest police station within a reasonable tin to the approach made to such participant, official employee.

(2) A participant, official or employee referred to in [10(1)] guilty of an offence if he or she accepts or agrees to accept any gratification as an inducement to or as a reward performing or not performing any act or omission referred in 1(a) to 1(b).

Yours faithfully

ALICK COSTA