ISS Analysis

State capture demonstrated that major corruption schemes frequently depend on relationships between public officials and private companies, consultants, intermediaries and suppliers. Focusing criminal liability only on the individuals who pay or receive bribes can leave organisations that benefit from corrupt conduct insufficiently accountable.

Section 34A responds by creating an incentive for organisations to prevent corruption before it occurs. An entity cannot simply rely on the argument that corrupt conduct was undertaken by an employee, agent or other associated person without senior management’s knowledge. Where the statutory requirements are met, the organisation must be able to demonstrate that it had adequate procedures designed to prevent such conduct.

The provision therefore has potential significance beyond prosecutions. If taken seriously by organisations, it can influence corporate governance, risk assessment, third party due diligence, procurement controls, staff training, internal reporting and board oversight.

Its impact will nevertheless depend on enforcement. A failure to prevent offence that is rarely investigated, has uncertain penalties or lacks clear standards for adequate procedures may have considerably less preventative effect than its statutory wording suggests.

The existing section 34A creates liability where a person associated with a private sector entity or incorporated state owned entity gives, offers or agrees to give gratification prohibited by PRECCA with the intention of obtaining or retaining business or a business advantage for that entity.

A person is associated with an entity if that person performs services for or on its behalf, irrespective of the capacity in which those services are performed. An entity does not commit the offence if it had adequate procedures designed to prevent the prohibited conduct.

Two current parliamentary initiatives would make further changes to PRECCA.

Judicial Matters Amendment Bill B8-2025 is a government bill. It would amend section 26 of PRECCA to include section 34A among the offences to which the Act’s penalty framework applies. The amendment is narrow but important because it corrects an omission in the legislation that introduced the failure to prevent offence.

Prevention and Combating of Corrupt Activities Amendment Bill B19-2026 is a private member’s bill introduced by ActionSA MP Dereleen James. It proposes minimum sentences for offences covered by specified parts of PRECCA and increases the maximum sanction for the offence under section 28(6)(b). It would also lower the section 34 reporting threshold for theft, fraud, extortion, forgery or uttering a forged document from R100,000 to R30,000.

Courts would retain the ability to impose a sentence below the prescribed minimum where substantial and compelling circumstances exist and are placed on the record.

The Department of Justice and Constitutional Development’s 2026/27 Annual Performance Plan also lists a Prevention and Combating of Corrupt Activities Amendment Bill among legislation proposed for amendment or development. The document does not describe the intended amendments.

This should therefore be tracked separately from B19-2026 rather than assuming that the private member’s bill fulfils the Department’s planned reform.

• Lead department: Department of Justice and Constitutional Development.
• Legislature: Parliament, particularly the Portfolio Committee on Justice and Constitutional Development and the National Assembly.
• Enforcement bodies: National Prosecuting Authority and Directorate for Priority Crime Investigation.
• Law reform body: South African Law Reform Commission.
• International monitoring body: OECD Working Group on Bribery.
• Other actors: Private companies, incorporated state owned entities, business and professional associations, compliance professionals and civil society organisations.
• Political actor in current amendment process: ActionSA MP Dereleen James, sponsor of B19-2026.

• Adequate procedures guidance: Organisations still lack authoritative South African guidance setting out what measures are likely to constitute adequate procedures under section 34A. This affects both compliance planning and future enforcement.
• Penalty framework: Section 34A was not included in section 26 when the offence was created. B8-2025 would correct this technical gap, but the amendment has not yet been enacted.
• Enforcement practice: The provision will acquire practical meaning through investigations, prosecutorial decisions and ultimately judicial interpretation. No reported section 34A prosecution or judgment has been identified.
• Corporate compliance: Effective implementation depends partly on organisations developing risk based prevention systems rather than treating section 34A as a formal compliance exercise.
• Smaller businesses: The OECD has specifically identified the need to consider support for small and medium sized enterprises in implementing adequate procedures. Compliance expectations need to be proportionate to organisational size and corruption risk.
• Reporting capacity: If B19-2026 lowers the section 34 threshold from R100,000 to R30,000, substantially more suspected offences may fall within the reporting duty. The practical effect will depend partly on the capacity of the Directorate for Priority Crime Investigation to receive, assess and act on additional reports.
• Coordination with corporate enforcement reform: Section 34A intersects with the developing framework for non-trial resolutions, corporate cooperation and asset recovery. These reforms will need to operate coherently rather than as disconnected enforcement mechanisms.

• Progress of Judicial Matters Amendment Bill B8-2025 and enactment of the correction to section 34A’s penalty framework.
• Progress of Prevention and Combating of Corrupt Activities Amendment Bill B19-2026.
• Whether the proposed reduction of the section 34 reporting threshold survives the parliamentary process.
• Whether Parliament adopts the proposed minimum sentencing framework.
• Publication of official guidance on adequate procedures.
• The first investigation, prosecution or reported judgment under section 34A.
• Whether the NPA issues prosecutorial guidance concerning section 34A.
• Development of the further PRECCA amendment contemplated in the Department of Justice and Constitutional Development’s 2026/27 legislative programme.
• Progress towards a statutory non-trial resolution framework for corporate offending.

Section 34A is an important structural change to South Africa’s anti-corruption law because it places responsibility on organisations to prevent corruption rather than concentrating exclusively on the individuals directly involved. The basic legal framework has therefore moved beyond policy development into implementation.

The implementation framework is not yet complete. The absence of official guidance on adequate procedures remains significant, and the government is still seeking to correct the omission of section 34A from PRECCA’s penalty provision. There is also little publicly visible enforcement experience from which companies, prosecutors or courts can draw.

At the same time, PRECCA is entering a broader period of possible amendment. B19-2026 raises distinct questions about sentencing and mandatory reporting, while the Department of Justice and Constitutional Development has signalled further PRECCA reform without yet publicly specifying its content.

The next phase should therefore be assessed on two levels. The first is whether section 34A begins to affect corporate behaviour and enforcement in practice. The second is whether subsequent legislative changes strengthen the coherence of PRECCA without relying on harsher formal penalties as a substitute for effective detection, investigation and prosecution.