Corporate Alternative Dispute Resolution (C-ADR) - when evidence from within impacts governance

History has a way of repeating itself. In the 1930s, Al Capone terrorised the inhabitants of Chicago. Yet he was ultimately brought down not by rival criminals or daring law enforcement raids, but by an "inside job" - meticulous examination of his own records, tax filings and internal financial missteps. Today, the corporate world faces a similar reckoning.

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Through Corporate Alternative Dispute Resolution (C-ADR), organisations may survive scandal, but directors and executives are increasingly exposed to scrutiny, prosecution and reputational damage. The modern “inside job” may come from within the company itself.

C-ADR - a game-changer

South Africa’s C-ADR policy allows companies to self-report corruption, cooperate with authorities and remediate wrongdoing in exchange for non-prosecution. Inspired by international best practices such as Deferred Prosecution Agreements in the US and non-prosecution agreements in the UK, this mechanism represents a pivotal shift in how corporate misconduct is addressed.

C-ADR, however, does not protect individuals. Employees, executives and directors involved in wrongdoing remain fully liable and the company may provide authorities with the very evidence needed to prosecute them.

As Adv. Chuma Mtengwane, Special Director of Public Prosecutions highlighted at the recent Frontiers of Asset Recovery Conference in Cape Town, “We have a very good legislative framework in South Africa but it’s difficult to enforce and monitor. If we don’t encourage collaboration between regulatory authorities including the public sector, we won't conquer corruption the pace is very slow and frustrating for law enforcement authorities.”

Judge Dennis Davis further emphasised the operational challenges, saying, “We have developed Rolls-Royce legislation in South Africa, but we are clueless of how to implement and police it.”

And Justice Raylene Keightley of the Supreme Court of Appeal South Africa framed it in constitutional terms, saying, “It’s a constitutional imperative to deal with corruption not dealing with it poses a serious threat to our state.”