Trump’s gutting of Foreign Corrupt Practices Act creates perception that corruption is ‘fine’ — Sibanye CEO

US President Donald Trump’s suspension of the Foreign Corrupt Practices Act (FCPA) is a “serious step backwards” in the global fight against corporate malfeasance, but South Africa’s business/government initiative against the scourge of crime is moving forward with 20 high-profile cases targeted, Neal Froneman, CEO of diversified metals producer Sibanye-Stillwater, told Daily Maverick in an interview. 

Introduced in 1977, the FCPA prohibits US individuals and companies – or those with a US connection such as a secondary listing – from bribing foreign public officials for commercial gain. It has long been seen as a vital tool to keep the corporate world in check.

As part of his slash and burn policy, Trump earlier this month suspended the FCPA for 180 days pending a review of its operations, pointedly saying that it reduced the competitiveness of US companies. 

Read more: Is Trump giving US companies the green light on bribery?

“That is a serious step backwards, it’s absolutely wrong. It creates a tilted playing field because there are companies that will now embark on corruption and as an honest company it makes you less competitive,” Froneman told Daily Maverick in an interview after Sibanye unveiled its interim results, which showed headline earnings of R1.54-billion compared with a loss of more than R4.1-billion for the comparable period the year before.

“You just create the perception that it’s fine to be corrupt,” Froneman said.

Froneman is also chairman of Business Against Crime SA and is co-lead of the business/government partnership to address the scourges of crime and corruption in South Africa, which costs the country the equivalent of 10% of its gross domestic product (GDP) annually, according to World Bank estimates. 

Asked about progress on that front, Froneman replied: “We have made a lot of progress, but it is behind the scenes.” 

A lot of the work has been aimed at bolstering the Directorate of Priority Crime Investigation, known as the Hawks, as well as the National Prosecuting Authority. 

“We are setting out what capacity is required and what skills are required for 20 high-profile cases that they want to focus on this year,” Froneman said. 

Business has committed R150-million over the next three years, with the government to match those funds. 

“They are 20 high-profile cases that involve money laundering and terrorist financing, and the national priority is to get off the Financial Action Task Force (FATF) greylisting which means you have to tackle these cases,” Froneman said. 

The greylisting is a reflection of the state’s inability to tackle criminal activities such as money laundering and raises South Africa’s risk profile among foreign investors.

“We can expect the first two to three cases to start now, within this quarter. But to manage expectations, I’m not sure the public will see any visibility in the quarter, but it will become more visible toward the end of the year when these things actually go to trial.” 

Froneman, 65, will retire from Sibanye at the end of September, but said he would continue his role at Business Against Crime SA 

“I need to be active, and I look forward to putting something back,” he said. DM