Anti-Corruption Compliance for Companies in South Africa (2025): What the Law Demands

Corruption remains one of the most serious threats to good governance and ethical business in South Africa. In 2025, companies face increasing scrutiny under the Prevention and Combating of Corrupt Activities Act 12 of 2004 (PRECCA) and the Companies Act 71 of 2008.

The legal framework demands more than just intent, corporate entities can be held liable for the corrupt actions of their directors, officers, or agents. The cost of non-compliance? Life imprisonment, unlimited fines, and public blacklisting.

Here’s what South African companies must know and do to remain compliant.

What Is Corruption Under South African Law?

Corruption is broadly defined as the direct or indirect offering, giving, receiving, or soliciting of any gratification to induce or reward improper performance of a duty.

Importantly, under section 332(1) of the Criminal Procedure Act 51 of 1977, companies may be vicariously liable for crimes committed by employees or directors acting in the course of their duties or to further the interests of the company.

Compliance Duties Under the Companies Act (2025)

• All Companies: Section 159 of the Companies Act requires every company to adopt systems that encourage whistleblowing. Whistleblowers who disclose corruption related conduct are protected from civil, criminal, or administrative liability.

• State-Owned, Listed, and High-Impact Companies:

  • Companies that are:

    • State-owned

    • Listed public companies or with a public interest score over 500 (in any two of the past five years) must establish a Social and Ethics Committee (SEC) under Reg 43.

      • This SEC must monitor:

        • Anti-corruption measures

        • Alignment with the UN Global Compact and OECD anti-corruption principles

        • Ethical governance, sponsorships, and donations

          
          

Private Companies: Why Compliance Still Matters

Although not legally required to establish a SEC, private companies are strongly advised to implement anti-corruption compliance measures. These measures may not absolve the company of liability, but they can mitigate penalties and demonstrate good faith.

Recommended steps include:

• Creating a SEC-equivalent internal committee

• Adopting a written anti-corruption and bribery policy

• Training staff to identify and report unethical behaviour

• Implementing whistleblower protections

• Applying the King IV Code of Corporate Governance

  
  

Consequences of Non-Compliance

• Under PRECCA:

  • Unlimited fines

  • Imprisonment (up to life sentences)

  • Additional penalties up to 5x the value of the gratification involved

  • Blacklisting from public sector tenders

• Under the Companies Act:

  • Directors may be:

    • Declared delinquent

    • Disqualified from serving on boards

    • Held personally liable for breach of fiduciary duties

Failure to establish an SEC (where required) may result in statutory penalties under section 84(6)

How We Help

At Kern, Armstrong & Associates, we support businesses in creating a culture of compliance and transparency. Our services include:

• Structuring and operationalising Social and Ethics Committees

• Applying for SEC exemptions where applicable

• Aligning internal policies with King IV best practices

• Drafting robust anti-corruption frameworks

• Designing whistleblowing systems and reporting procedures

  
  

Reach out for a governance audit or policy consultation tailored to your business.