In a recent client alert, we explored the U.S. Department of Justice’s (“DOJ”) June 2020 update to its guidance on Evaluation of Corporate Compliance Programs (the “DOJ Guidance”).

In this series of posts, our Africa Anti-Corruption Practice will be focusing on the key takeaways from the DOJ Guidance through the lens of companies operating in Africa, starting with a foundational question: Why does guidance issued by U.S. law enforcement authorities matter to companies operating in Africa?

Strictly speaking, the DOJ Guidance does not “require” anything of companies, regardless of where they are headquartered, incorporated, or operate. Even for U.S. companies, the DOJ Guidance is not a prescriptive regulation with the force of law. Rather, it is a guidance document that is “meant to assist [U.S.] prosecutors in making informed decisions as to whether, and to what extent, [a] corporation’s compliance program was effective at the time of [an] offense, and is effective at the time of a charging decision or resolution.” This evaluation by prosecutors can impact various aspects of a DOJ enforcement action, including the form of resolution (e.g., guilty plea vs. deferred prosecution agreement), the monetary penalty imposed, and other compliance-related obligations imposed in a settlement (e.g., self-reporting requirements or independent compliance monitorships). Continue Reading Africa Compliance Minute Series – What Does DOJ’s Recent Guidance on Compliance Programs Mean for Companies Operating in Africa?

In a recent contribution to the CovAfrica blog, our Africa Anti-Corruption Practice outlined key considerations for handling internal investigations in Africa.  Here we take a deeper dive into one of the most important, and challenging, aspects of internal investigations – remediation, drawing on a longer article we recently published in Global Investigations Review’s 2020 Europe, Middle East, and Africa Investigations Review.

Key Takeaways:

  • Taking corrective action during the course of an investigation can put a swift end to any ongoing misconduct and help a company avoid further losses or liability.
  • A company will often have enough information early in its investigation to take steps to mitigate the risk of continued harm to the company.
  • Promptly investigating and addressing identified risks can help to narrow the scope of the investigation and save a company time and money.

Continue Reading Africa Compliance Minute Series – Acting Early to Save You Later: The Importance of Taking Corrective Action During the Course of an Investigation

On August 15, 2020, the Minister of Cooperative Governance and Traditional Affairs (COGTA) announced the extension of the national state of disaster. The national state of disaster was declared under Government Gazette No 43096 of 15 March 2020 (and extended by Government Gazette Nos 646 of June 5, 2020 and 765 of July 13, 2020), from August 15, 2020 to September 15, 2020. The reason for the extension of the national state of disaster is linked to the need “to continue augmenting the existing legislation and contingency arrangements undertaken by organs of state to address the impact of the disaster”. On the same day, President Cyril Ramaphosa announced a decision to transition the country from Alert Level 3 to Alert Level 2 of the Risk Adjusted Strategy, following consultation with the National Coronavirus Command Council, Cabinet and the President’s Coordinating Council.

Government Gazette No. 43620 sets out the revised restrictions that will govern this period effective 00H01 on August 18, 2020. The following restrictions have been lifted: Continue Reading South Africa Eases COVID-19 Restrictions with the Transition to Alert Level 2

As project finance becomes more widespread in Africa, government officials, bankers and developers will all become exposed to the complex documentation that comes with it. Some of the payment mechanisms can be very complicated and lawyers are often asked to include “worked examples” in the documentation. A recent case looked at the use of worked examples in contracts governed by English law. The court concluded the following:

  • worked examples are integral parts of finance and other commercial contracts;
  • it is often only when narratives and formulae are worked through that their true effect can properly be seen;
  • where there is more than one worked example, consistency among the examples (in this case the inclusion of a missing step), strongly suggests that this was a deliberate choice by the drafter; and
  • it is inherently more probable that the parties’ true bargain is to be found in the worked examples.

Continue Reading Making Your Intentions Known in Contract: Complex Formulae

President Cyril Ramaphosa announced on June 22, 2020, that certain sections of the Protection of Personal Information Act, 2013 (Act 4 of 2013) (“POPIA”) would become effective on July 1, 2020.  POPIA gives effect to the right to privacy in section 14 of the Constitution of the Republic of South Africa, 1996 (Act 108 of 1996).  POPIA will impact all responsible parties that collect, store, process and / or disseminate personal information as part of their business activities.  POPIA defines a responsible party as “a public or private body or any other person which, alone or in conjunction with others, determines the purpose of and means for processing personal information”.  The commencement of these essential provisions contained in POPIA, now position South Africa in line with global best practice on data protection and privacy.  The commencement of POPIA signifies a great advance for the South African data protection and privacy legal landscape. Continue Reading An Update on South Africa’s 2013 Protection of Personal Information Act

On June 17, 2020 South African President Cyril Ramaphosa announced government’s intention to further ease the lockdown restrictions imposed due to COVID-19, allowing more industries to re-open fully under stringent health and safety protocols. This announcement comes two weeks after the government de-escalated the country from Alert Level 4 to Alert Level 3 pursuant to the Risk Adjustment Strategy on June 1, 2020. The de-escalation of the Alert levels is partly in response to the negative impact that the prolonged National State of Disaster—announced on March 11, 2020, has had on the economy, as well as on individual livelihoods.

Following discussions with industry representatives, the COVID-19 National Command Council (“NCC”), Cabinet and Premiers, the following will now be permitted:

  • Sit-down meals in restaurants;
  • Accredited and licensed accommodations, (but still no home sharing such as AirBnB);
  • Conferences and meetings for business purposes in line with restrictions on public gatherings;
  • Cinemas and theatres, to be aligned to limitations on gathering of persons;
  • Casinos;
  • Personal care services, including hairdressers and beauty services;
  • Non-contact sports such as golf, tennis, cricket and others. Contact sports will be allowed only for training and modified activities with restricted use of facilities.

The government will in due course issue details regarding such measures, including the date from which these industries will be permitted to reopen.

President Ramaphosa further announced a breakthrough in the treatment of COVID-19, led by the University of Oxford in the United Kingdom. The study found that the drug dexamethasone, has been shown to reduce deaths among patients on ventilation by one-third. Therefore, South Africa’s Department of Health and the Ministry Advisory Committee have since recommended the use of dexamethasone for patients diagnosed with COVID-19.

As Chair of the African Union, President Ramaphosa highlighted South Africa’s involvement in forging a common approach across the continent to ensure, among other things, the effective mobilization of resources and the implementation of associated strategies. These include the ground-breaking Africa Medical Suppliers Portal: a single continental marketplace where African countries can access critical medical supplies (including test kits), from suppliers and manufacturers in Africa and across the world, in the necessary quantities, and at competitive prices.

Over the next few days, we anticipate that government will announce further details on the dates on which the easing of further restrictions will take effect, including the necessary regulations and/or amendments to existing regulations, to give effect to and provide directives to affected sectors.

The NCC will continue to make determinations on the applicable Alert Level based on an assessment of the infection rate and the capacity of our healthcare system to provide care to infected patients.

For further information, please reach out to Covington’s COVID-19 Task Force at COVID19@cov.com, Robert Kayihura at RKayihura@cov.com or Mosa Mkhize at MMkhize@cov.com

 

 

Following the declaration of the National State of Disaster on March 15, 2020, a number of regulations have been enacted to contain and minimise the spread of COVID-19 in South Africa. On June 2, 2020, Judge Norman Davis of the South African High Court found the regulations issued in terms of section 27 of the Disaster Management Act, 2002 (Act No. 57 of 2002) (the “Act”) under Government Gazette No. 43258 (the “Regulations”), unconstitutional and invalid. See De Beer and Others v. The Minister of Cooperative Governance and Traditional Affairs (“De Beer”).

In this piece, we provide an overview of the Court’s analysis pursuant to the rationality test.

The Rationality Test

The rationality test requires an evaluation of the relationship between the means and the end. It is not designed to determine whether some means will achieve the purpose better than others, but only whether the means employed are rationally related to the purpose for which the power was conferred. Where the measure is not rationally connected to a permissible objective, a lack of rationality would result in such a measure not constituting a permissible limitation of a constitutional right in the context of section 36 of the Constitution.

In employing the rationality test, the Court found that the declaration of a National State of Disaster was rational because measures to curb the spread of COVID-19 were urgently required to convert an ailing and deteriorated public health care system into a state of readiness, able to cope with previously unprecedented demand for high and intensive care facilities. Among the issues challenged were: the limitation on exercise; who may attend funerals; and the practicalities of distributing aid relief. The Court found that the Regulations (in a substantial number of instances) are not rationally connected to the objectives of slowing the rate of infection or limiting the spread of COVID-19. However, other restrictions did pass constitutional muster, including those pertaining to: education; prohibitions against evictions; initiation practices; the closure of night clubs; fitness centres; and the closure of borders (See Regulations 36, 38, 39(2)(d) – (e), and 41). The issue relating to the ban of the sale and trade of tobacco was not addressed in any level of detail, owing to separate court cases pending on that subject.

Conclusion

Acknowledging the separation of powers doctrine, the Court ordered the Minister of Cooperative Governance and Traditional Affairs—vested with the power to implement regulations under the Disaster Management Act—in consultation with other relevant ministers, to take appropriate remedial action, amendment, and review. The order has been suspended for 14 days, leaving the Regulations in place for the moment.

De Beer highlights the delicate balance required in the policymaking process. First, a balance must be struck between the proper exercise of public powers and/or functions within the ambit of the enabling legislation. Second, this should be done in a manner in which fundamental human rights are respected and upheld. Where Government actions do not satisfy the rationality test, their encroachment on and limitation of fundamental human rights (even during a pandemic), will not be justifiable.

In a statement issued on June 4, 2020, Cabinet decided to appeal the De Beer judgment on an urgent basis. The Minister of Cooperative Governance and Traditional Affairs will be joined in this application by the President and the Minister of Health.

For further information, please reach out to Covington’s COVID-19 Task Force at COVID19@cov.com, Robert Kayihura at RKayihura@cov.com, and/or Mosa Mkhize at MMkhize@cov.com.

Join us tomorrow, June 3, 2020, from 10:00 a.m. – 11:30 a.m. for a webinar featuring The Honorable Eric Holder, 82nd Attorney General of the United States, to discuss the topic of Law and Crisis Management: Working with Lawyers in Business, Government, and Society to Manage the Challenges of COVID-19. You may register for this event at VirtualConferenceAfrica.com.

Drawing on insights from leading lawyers across Africa, this webinar focuses on how the law connects businesses, governments, and societies. Understanding Africa through this lens provides a unique perspective on Africa’s short, medium, and long-term response and strategy. In a time of legal uncertainty, this webinar also explores some of the substantive questions facing legal practitioners, as well as the developmental and social challenges the pandemic presents for African societies.

Mr. Holder will be joined by the following astute individuals on this webinar:

  • Professor David Wilkins, Lester Kissel Professor of Law, Vice Dean for Global Initiatives on the Legal Profession, and Faculty Director, Center on the Legal
  • Profession, Harvard Law School
  • Gerald Abila, Founder and Executive Director BarefootLaw
  • Prof Ruth L. Okediji, Harvard Law School and Co-Director of Berkman Klein Center at Harvard
  • Dr. Myma, Belo-Osagie Co-Founder Udo Udoma Belo-Osagie Michel
  • Sandie Okoro, Senior Vice President and Group General Counsel, World Bank Group
  • Michel Brizoua, Partner, Bilé-Aka, Brizoua-Bi & Associés
  • Thandi Orleyn, Chairperson Legal Resources Trust South Africa
  • Stephen Chege, Chief Corporate Affairs Officer Safaricom
  • Dr. Godfred Penn, General Counsel & Director African Development Bank
  • Prof. Vincent O. Nmehielle, SJD Secretary-General, African Development Bank Group

On May 13, 2020 South African President Cyril Ramaphosa announced the government’s intention to ease restrictions imposed to curb the spread of COVID-19. This announcement comes seven weeks after South Africa first announced a national state of disaster in accordance with the Disaster Management Act, 2002 (Act No. 57 of 2002) (the “Act”). This decision to ease restrictions was informed by evidence presented by the National Command Council (“NCC”) which indicated that the early implementation of the nationwide lockdown had successfully limited the spread of COVID-19. The significant strain placed on the South African economy as a result of the nationwide lockdown necessitated a considered approach to systematically resuming commercial activity to uphold the health related gains.

The nationwide lockdown period is governed by a robust Risk Adjusted Strategy; a 5 level system of alerts aimed at defining permissible levels of general movement, travel and economic activity. In his national address on May 13, 2020, President Ramaphosa announced that government is contemplating further easing the lockdown regulations for certain provinces to move from Alert Level 4 to Alert Level 3 by the end of May. We anticipate that over the next few days, government will issue further regulations and/or amendments to existing regulations, that will outline the guidelines and directives that govern the easing of trade and permitted commercial activities, while maintaining appropriate health and safety measures.

An example of a recently published regulation is Government Gazette No. 11113 issued on May 14, 2020 which provides directives and protocols which must be observed by retailers, couriers or delivery services and customers in relation to goods transacted through e-Commerce during Alert Level 4. Until May 14, 2020, all commercial activities have been limited to ‘essential services’ and ‘essential goods’ as defined by Government Gazette No 43258 (the “Regulations”) (e.g. supermarkets, medical facilities and pharmacies etc.). Under the newly published e-Commerce Regulations, all goods may be transacted through e-commerce platforms, except for goods prohibited for sale in terms of regulations 26 and 27 of the Regulations (such as liquor, tobacco, tobacco products, e-cigarettes and related products).

For further information, please reach out to Covington’s COVID-19 Task Force at COVID19@cov.com, Robert Kayihura at RKayihura@cov.com or Mosa Mkhize MMkhize@cov.com.

 

 

If COVID-19 spreads across Africa, it would not only be a human catastrophe for the continent, but one that threatens the Northern Hemisphere with future outbreaks and further human and economic losses. What is true in the United States, where people in poor and minority neighborhoods are dying in disproportionate numbers, is true for the world as a whole: No one will be safe so long as anyone is at risk.

If the United States, Europe, and others succeed in containing the virus in the coming months, there is no way contagion throughout Africa could be contained there. A second wave rising in Africa would almost surely crash on U.S. shores. In this way, the coronavirus pandemic has laid bare the world’s interdependence; the future safety of every U.S. community therefore depends on the success of every community in Africa and elsewhere.

While giving priority to the fight here at home is essential, the time to help Africa fight the virus is now.

Click here to view the full article co-written by Witney Schneidman as it appeared in Foreign Policy (April 29, 2020).