Ladies and Gentlemen:
I am pleased to be with you today as you undergo what we would refer to in my other circles as organisational renewal. Generally Annual General Meetings are important gatherings where interest parties gather to review the work of their entrusted leadership and most importantly ask difficult questions. In essence, this is a gathering wherein accountability is practiced.
I am equally pleased that this gathering is considering the question, what is the role of lawyers in combatting corruption. This is an important question especially where we are in our Constitutional democracy, we are at a point wherein our democracy is being suffocated by corruption.
Distinguished guests, this meeting also comes at a time where our country has just commemorated the 62nd anniversary of the Sharpeville Massacre, as well as International Day for The Elimination Of Racism.
The celebration of Human Rights and the eradication of racism are intertwined. South Africa as we experience it today, is fundamentally different from the South Africa which 69 people were brutally killed for protesting against pass laws.
One thing is becoming increasingly clear in post-apartheid South Africa, corruption has disrupted government’s ability to implement the structural reforms, which are required to move South Africa away from the two nations, based on race which were orchestrated by the apartheid regime.
A document published by the Department of Planning, Monitoring and Evaluation, which reviews 25 years of our democracy, makes the following observations:
Having said that, as a nation we found a way of viewing corruption as a predominantly government phenomenon, we seem to be tolerant of those who brag about paying a bribe to an officer who caught them speeding.
We seem to be tolerant of accounting firms, architects and professionals who create sophisticated schemes to extract money from Transnet which is meant to augment our railway system, but with the help of professionals, this money finds itself in pockets of politically connected individuals.
FATF report has highlighted the role of trust in financing of international terrorism and money laundering in our country.
The collusion on medical negligence case that is currently under SIU investigations, the theft of trust fund monies are some of the areas that lawyers need to play an immigrant role to eliminate.
I suppose as we gather here today, the question we ought to ask is how noble, is the noble profession.
It should go without saying that lawyers should not carry out illegal acts.
The Financial Intelligence Centre (FIC) conducted a risk assessment of the inherent Money Laundering and Terror Financing risks of legal practitioners in South Africa.
The report makes the following observation.
The legal profession is internationally recognised as potentially vulnerable to being abused by criminals to launder their proceeds of crimes.
The services provided by the legal profession such as advising on and creating legal entities, including shell companies and trusts, property conveyancing services and the provision of client accounts, make them potentially vulnerable to money laundering abuse.
Additionally, internationally recognised high-risk services include managing of client affairs, establishing and managing charities and certain types of litigation.
The use of legal practitioners to recover fictitious debts has also been identified as a method to possibly move funds from one entity or person to another, thereby giving criminal proceeds an appearance of legitimacy.
The report makes the following conclusion:
The number of regulatory reports received from legal practitioners is very low, this is a concern.
During the five years from April 2016 to March 2021, legal practitioners filed a total of 11 966 cash threshold reports at an average of 2 393 per year. Let’s bear in mind these are transaction exceeding R 25 000.
During the same period, the sector filed a total of 1 160 suspicious and unusual transaction reports at an average of 232 per year.
The question that arises is how is it possible that there were 16 059 legal practitioners, including branches, registered with the FIC as of March 2021 but yet there are such low numbers of reporting.
Perhaps in light of the above, another question that arises is how we as lawyers implement section 7 of the Prevention of Organisation Crime Act, which criminalises the Failure to report suspicion regarding proceeds of unlawful activities.
So, as lawyers, we know very well what our role should be. The question is what stops us from playing it?
The NPA is preparing to prosecute the various crimes as identified by the Zondo Commission, some which are voluminous. We have invoked Section 38 of National Prosecuting Authority Act Which reads
Despite this being in place and being invoked, what stops members of the legal fraternity from saying to us as a means of patriotic duty, I am willing to assist the state to prosecute corruption at a reduced rate or even for free.
Access to justice, law reform commission
Our role in combatting corruption is to be ethical and proponents of the rule of law we dare not fail in fulfilling our oath of office.