Business Corruption

South Africa has introduced a comprehensive legal framework for environmental protection, which includes several sector-specific measures. Companies should note that all decisions affecting the environment are subject to Environmental Impact Assessment regulations. Although the formal measures for environmental protection are in place, the efficiency of regulations is reduced by lack of enforcement capacity and experience. According to Global Integrity 2010, government inspectors sometimes accept bribes from companies to ignore non-compliance with environmental regulations.

Political Corruption

Mail & Guardian in its October 2011 article reports that bribery, intimidation, non-compliance and a lack of cooperation from holders of mining and prospecting licences are some of the obstacles that mining-audit inspectors encounter during licence audits.

According to a February 2007 article by IOL News, despite a large sum of money being spent on mining security each year; the South African government continues to suffer huge losses in terms of unpaid tax revenue and royalties due to problems of thefts. The same articles also reports that there is evidence indicating that smuggling syndicates pay ZAR millions in bribes to buy off mining staff and members of the South African Police Services.

The local media uncovered a case in which a lucrative Nigerian oil contract was diverted to an offshore company. Former President Mbeki and other government officials lobbied the Nigerian government for the award of the contract, which subsequently went to the South African Oil Company (SAOC), registered in the Cayman Islands. SAOC has not transferred any funds to the South African state or public services, although the profits of this contract are estimated to be around ZAR 30 million a year. This in itself is not unusual. However, the company's South African contacts have turned out to have strong links to ANC interests, and a senior official in the Department of Minerals and Energy has lobbied for the contract to be increased in value, despite the apparent absence of benefits to the South African state and public. Following this case, the man behind SAOC planned to establish an oil refinery in East London. This project turned out to benefit several senior South African politicians and their families. See the Institute for Security Studies SA Corruption Briefing Issue 4 and Issue 5.