SOUTH AFRICAN INSTITUTE OF RACE RELATIONS
PREVENTION OF ORGANISED CRIME BILL [B118-98]
1. Introduction The Prevention of Organised Crime Bill (the bill) proposes to, inter alia, ‘introduce extra-ordinary measures to combat organised crime and criminal gang activities and to provide for the civil forfeiture of criminal assets that have been used to commit an offence
According to the minister of justice, Mr Dullah Omar, the bill includes ‘several drastic measures aimed at strengthening the hands of the police and prosecutors in dealing with organised crime
Crime is one of the primary concerns of all South Africans. Like ordinary crime, organised crime posses a threat to the stable and democratic political order in South Africa. Because of its organised nature this form of crime has the potential to cause considerable harm to the economic stability of the country. So far too little has been done to effectively combat organised crime in South Africa.
The Prevention of Organised Crime Bill, has good and acceptable intentions. The bill in its present form does, however, raise a number of concerns which are enunciated below. Moreover components of the criminal justice system which deal with organised crime need to be properly funded and its personnel adequately trained before the bill is promulgated.
2. The bill: comments, criticisms and suggestions
2.1 Organised crime not defined
Chapter 2 of the bill proposes that a person who ‘manages the operation of an enterprise’, and who ought reasonably to have known that any person employed or associated with the enterprise is participating in the enterprise’s affairs through a ‘pattern of illegal conduct’, will be guilty of an offence and liable, upon conviction, to a fine of up to R10m or to a period of imprisonment of up to 30 years.
A ‘pattern of illegal conduct’ is given a wide interpretation by the bill, meaning ‘two acts of illegal conduct, one of which occurred after the commencement of the act and the last of which occurred within 10 years (excluding any period of imprisonment) after the commission of a prior act of illegal conduct’.5 Illegal conduct is limited to offences listed in schedule 1 attached to the bill and includes such prevalent and potentially minor offences as theft and malicious injury to property.
Also included is ‘any offence relating to the illicit dealing in or possession of precious stones’. (A Karoo farmer who finds an unpolished diamond on his property and sells it to a person who is not a producer, manufacturer, dealer or permit holder for dealing in diamonds would be committing a schedule 1 offence.)
An ‘enterprise’ is also broadly defined by the bill to include ‘any trade, business, profession or other activity of a continuing nature, whether or not carried on for the purposes of deriving a profit’.
Presumably to prevent the misuse of chapter 2 by overzealous prosecutors the bill proposes that a manager of an operation or enterprise shall only be prosecuted if, inter alia, the National Director of Public Prosecutions believes that an organised crime has been committed. The bill does not provide a definition of organised crime however.
It is submitted that, given the broad definition given to a ‘pattern of illegal conduct’, and an ‘enterprise’, the term organised crime be defined by the bill so as to exclude organisations and enterprises which are not involved in organised crime. The situation might otherwise arise that the state could prosecute people who manage political organisations or organisations which represent a political interest if any members of such an organisation participate in the organisation’s affairs through a pattern of illegal conduct.
In the United States, where a similar statutory provision exists, the leadership of an anti-abortion organisation was convicted of a crime because some individual members of the organisation had over a period of 10 years on more than one occasion damaged abortion clinics.
Similarly the bill could be used to prosecute leaders of environmental organisations some of whose members damage property belonging to polluting industries, leaders of animal rights groups some of whose members steal animals from vivisectionists’ laboratories, or leaders of political organisations some of whose members damage or steal election posters of rival political organisations. This is clearly not the purpose of the bill.
The bill gives wide ranging powers to prosecutors and police officers because of the unique nature of organised crime. To limit the abuse of such powers it is vital, however, that they be used solely to combat genuine organised crime. It is submitted that a definition of organised crime exclude people who engage in crime - albeit on an organised basis - for purposes other than financial gain, profit or greed.
2.2 ‘Illegal conduct’ not satisfactorily defined The bill defines illegal conduct as ‘any act or threat involving an offence referred to in Schedule1 It is submitted that it is unclear what it is precisely that a person must do to have engaged in illegal conduct. If a person has to be convicted of one or more of the offences listed in Schedule 1 to the bill, to be deemed to have engaged in illegal conduct, then this should be explicitly stated.
2.3 Clause 2(1)(a): too broad and open to misuse The bill provides that any person who receives or retains any property, directly or indirectly, from a pattern of illegal conduct, and who knows that such property is derived from a pattern of illegal conduct, and uses or invests, directly or indirectly, any part of such property in the establishment or operation of any enterprise shall be guilty of an offence.
A ‘pattern of illegal conduct’ is defined so broadly that even petty criminals could be ensnared by this provision of the bill. Any offence listed in schedule 1 of the bill which is committed more than once in a ten year period by the same person suffices to show a pattern of illegal conduct. Schedule 1 offences include any form of theft, malicious injury to property, receiving stolen property knowing it to be stolen, housebreaking, fraud and forgery.
A person who has on two occasions within a ten year period been convicted of, for example, shoplifting underwear could be engaging in a pattern of illegal conduct in terms of the bill. If moreover it could be shown that this person uses the underwear to sell in his spaza store (i.e. he uses the underwear in the operation of an enterprise), such a person could be convicted of clause 2(1)(a) of the bill and be liable to a fine not exceeding R10m, or to imprisonment not exceeding 30 years.
To prevent such a situation occurring two amendments to the bill could be considered. Firstly, for a person to be convicted in terms of clause 2(1) a court must be satisfied that an organised crime has been committed. (Much in the same way that the National Director of Public Prosecutions must be of the opinion that an organised crime has been committed before he can institute a prosecution in terms of clause 2(1) of the bill.) Secondly, some of the offences listed in schedule 1 could be more narrowly defined. For example, theft of items to the value of more than a certain amount, fraud involving monies exceeding a certain amount, and so forth.
2.4 Restraining orders In terms of chapter 3 of the bill, an authorised public prosecutor may apply to a High Court for an order prohibiting any person from dealing with any property in respect of which a reasonable suspicion exists that ‘such property is concerned in the commissioning or suspected commissioning of an offence which forms part of a pattern of illegal conduct; or such property is, or is part of, the proceeds of unlawful activities’
The High Court is obliged to grant a restraining order provided the application is supported by an affidavit of an authorised police officer stating, inter alia, that the property ‘is concerned in the commission or suspected commission of an offence which forms part of a pattern of illegal conduct; or is, or is part of, the proceeds of unlawful activities’.
As the High Court is obliged to grant an order which has far reaching consequences for the person concerned, the following amendments are proposed:
Firstly, an ‘authorised police officer’ is defined as ‘any officer’ of the South African Police Service (SAPS) who is authorised by the National Director of Public Prosecutions or the National Commissioner of the Police. It is proposed that an authorised police officer should have a specified minimum rank for the purposes of the restraining orders provision of the bill.
Secondly, it is unclear what an ‘unlawful activity’ is. It is proposed that unlawful activity should mean a criminal offence or offences. (This also applies, mutatis mutandis, to clause 18(1)(b) of the bill.)
Thirdly, the phrase ‘suspected commission of an offence’ should be deleted. It is too broad, and its potential application and meaning are vague. It could be misused in situations where the state has no evidence that anything unlawful has occurred whatsoever in respect of certain property. The state could hide behind this lack of evidence with the allegation that there has been a ‘suspected’ commission of an offence. (This also applies, mutatis mutandis, to clause 18(1)(a) of the bill.)
2.5 Civil asset forfeiture In terms of the bill assets subject to a restraining order can be forfeited to the state if the High Court finds on a balance of probabilities that the property in question is inter alia ‘concerned in the commission or suspected commission of an offence which forms part of a pattern of illegal conduct. The validity of a forfeiture order is not affected by the acquittal (in a criminal trial) of a person accused of committing an offence which forms part of a pattern of illegal conduct.
To give an example (a true story as reported in the US press):
‘William Jones, a second-generation nursery man in his family’s Nashville (Tennessee) business, bundles up money from last year’s profits and heads off to buy flowers and shrubs in Houston (Texas). He makes this trip twice a year using cash, which the small growers prefer. But this time as he waits at the American Airlines gate in Nashville Metro Airport, he is flanked by two police officers who escort him into a small office, search him and seize the $9 600 he is carrying.
A ticket agent had alerted the officers that a "large black man" had paid for his ticket in cash which is unusual. Because of the cash, and the fact that he fits a "profile" of what drug dealers supposedly look like, they believed he was buying or selling drugs. Mr Jones was free to go. But the state kept his money - his livelihood - and gave him a receipt in its place. No evidence of wrongdoing was ever produced. No criminal charges were ever filed.
In terms of the bill a South African Mr Jones could be in a similar situation (once the state had obtained a restraining order). It is sufficient for the granting of a forfeiture order for the court to be satisfied on a balance of probabilities that the property is concerned in the suspected commission of an offence. There is no need of proof of an offence having actually occurred. Moreover, even if a South African Mr Jones were charged with dealing in drugs - the offence which allegedly earned him the cash - and acquitted in a criminal court on that charge, the forfeiture order would still stand.
Civil actions are usually between private individuals or privately owned organisations. The costs of fighting a civil action (in terms of time and the cost of counsel), and the possibility that a court could award further costs against the losing party in a civil action, inhibits most potential litigants from instituting a civil action unless they have a strong case.
These considerations do not apply in the case of civil asset forfeiture where the opponent is the state. The National Director of Public Prosecutions or a prosecutor authorised by him does not incur any personal risk in an application to the High Court for a forfeiture order. Because the possibility of abuse is great with civil asset forfeiture, safeguards should be considered to minimise the possibility of an injustice occurring.
Some safeguards are contained in the bill. The bill makes provision for a person whose property has been forfeited to apply to the High Court for an order excluding his interest in the property concerned from the operation of the order. At a hearing for such an application the applicant may testify and present evidence and witnesses on his own behalf. Moreover, the High Court may make provision for reasonable legal expenses incurred by a person whose property has been placed under a restraining order or has been forfeited. The High Court may, however, make such provision only if the person cannot meet the expenses concerned out of his unrestrained property.
These safeguards are not sufficient. Court actions involving property and financial assets are likely to be intricate. While permitting an applicant to testify in person will save him counsel fees, it will place him at a disadvantage vis-a-vis the state which will be able to afford legal counsel and financial experts to represent its interests.
Moreover, people who are neither wealthy nor indigent should not be discriminated against by the requirement that they are entitled to assistance only if they have no money or assets available to them to cover their legal expenses. (Wealthy crime bosses will in any event have the financial means to obtain the services of the best legal teams.) Mr Jones - to continue with the above example - might, in theory, have sufficient resources to hire legal counsel, but to do so could oblige him to forego the university fees for his daughter, or the purchase of fertiliser vital for the successful continuation of his business.
Everybody who has had his property forfeited by the state should be assisted by the state to make an application to the High Court to have his property excluded from the forfeiture order. It is submitted, therefore, that clause 13(2)(a) of the bill be deleted.
2.6 Criminal gang membership
The bill proposes that a court, after having convicted an accused person, finds that the accused was a member of a criminal gang at the time of the commissioning of the offence, may regard this as an aggravating factor for sentencing purposes.
To determine whether an accused person is a criminal gang member the court may take into account ‘two or more’ factors which are listed in the bill. It is submitted that some of the factors are vague and unclear.
A ‘documented reliable informant is not defined and the SAPS does not keep a register of informants categorising them into ‘reliable’ and ‘unreliable’ types. ‘Residing in or frequenting a particular criminal gang’s area is too broad and could place people under suspicion merely by virtue of where they live. Moreover, the factor ‘admitting to criminal gang membership’ could on its own suffice for a court to find that a person is a member of a criminal gang.
Yet the bill suggests that the court take into account at least two of the listed factors.
It is submitted that the listed factors be omitted altogether. Judicial officers, prosecutors and accused persons are in a position to call any witnesses and present evidence they deem necessary to show, for example, that a person is or is not a member of a criminal gang.
2.7 Technical points In reading clause 2(1) it is not clear whether subclauses 2(1)(a) to 2(1)(e) are separated by ‘and’ or ‘or’. If it is ‘or’, it should be stated as such at the end of the sentence to clause 2(1)(d).
Clause 21(1) states: ‘Any person affected by a forfeiture order who appeared at the hearing of the application under section 19(3), may...’. Clause 19(3) does not refer to the hearing, clause 20(3) does.
Clause 25(2)(a) refers to sections in the Criminal Procedure Act no 56 of 1955. The Criminal Procedure Act no 51 of 1977 repealed Act 56 of 1955 in its totality, except sections 319(3) and 384.
3. Legislation vs implementation Analysis of the legislation used to combat organised crime reveals that the bulk of the legislation has been on the statute books for a brief time only (see list below). Much of this legislation has not been properly applied and implemented because of a lack of resources and adequately trained and experienced personnel in the criminal justice system.
It is crucial to the bill’s success that the people dealing with it are properly trained and knowledgeable of its provisions. Organised crime bosses have the resources to hire the best legal minds to defend them in court and, if necessary, to appeal their cases to the Supreme Court of Appeals and the Constitutional Court. It would be tragic if the first cases brought in terms of the bill result in court judgments which result in the acquittal of the accused, or if it is found that the state forfeited the property of innocent people. This would result in a further loss of trust people have in the criminal justice system - something the state can ill afford.
It is submitted that structures, investigation teams, training courses and the requisite personnel are adequately developed and trained prior to the promulgation of the Prevention of Organised Crime Act. This was done with the Criminal Procedure Second Amendment Act no 84 of 1997. This act (which restricted accused persons’ right to bail under certain circumstances) was passed by Parliament in November 1997 but only came into operation in August 1998. The intervening nine months were used to train judicial officers and prosecutors in the operation of the new act. It is submitted that the same procedure be followed for the envisaged Prevention of Organised Crime Act.
Legislation to combat organised crime:
Investigation of Serious Economic Offences Act no 117 of 1991 (Act has been repealed and replaced by the National Prosecuting Authority Act of 1998.)
Corruption Act no 94 of 1992
Interception and Monitoring Prohibition Act no 127 of 1992 (Act came into operation in February 1993. The Judicial Matters Amendment Act no 34 of 1998 has expanded the scope of Act 127 of 1992.)
Special Investigating Unit and Tribunals Act no 74 of 1996
International Co-operation in Criminal Matters Act no 75 of 1996 (Act came into operation in January 1998.)
The Proceeds of Crime Act no 76 of 1996 (Act came into operation in May 1997.)
Extradition Amendment Act no 77 of 1996
Money Laundering Control Bill 1997 (The bill has not been tabled.)
National Prosecuting Authority Act no 32 of 1998
Witness Protection and Services Bill, [B9-98]
(The statutory protection of witnesses was first introduced in 1991 through an amendment to the Criminal Procedure Act.)
4. Bill based on insufficient analysis and research In the first half of 1997 the SAPS identified 192 organised crime syndicates with a combined figure of 1 903 primary suspects operating in South Africa. The SAPS also identified some 500 target groups with a combined figure of 1 184 primary suspects. A target group being ‘an organised criminal group which has come to the attention of either the SAPS or the intelligence agencies, but of which, due to numerous factors, the whole structure or extent of criminal activities is not yet known.
The police concede that their figures relating to organised crime are tenuous: ‘The exact impact of organised crime on society is difficult to assess, due to the fact that this form of crime in not always easily visible. In a 1998 report the police make the rather cautious statement that ‘certain signs exist that organised crime may be on the increase in South Africa’ (our italics). Moreover, since the first half of 1997 the SAPS has not released updated figures on the number of identified organised crime syndicates and primary suspects, and target groups. No pre 1997 figures are in existence either. This prevents an objective assessment as to the quantitative growth, if any, of organised crime.
It is generally accepted that organised crime is on the increase in South Africa. What is not clear, however, is:
whether South Africa is merely ‘catching up’ with other comparable countries. That is, the perceived increase in organised crime could be because of the limited extent of this phenomenon in the pre-1994 era (when exchange controls were strict, border controls tight, and the police had at its disposal draconian powers to combat any form of crime); and
what kinds of crime are committed most frequently by organised crime syndicates, and which of these crimes are growing at a faster rate than others. The 1997 police figures indicate that crime syndicates specialise in the following crime types (in order of frequency): drug trafficking, vehicle related crime, and commercial crime.
Answers to these questions are crucial if the state is to develop appropriate responses to the organised crime threat in South Africa. If the level and growth of organised crime is similar to that of other comparable countries an excessively tough response which provides the police and prosecution service with extraordinary powers, to the point of impinging upon due process rights and civil liberties, might be excessive.
Alternatively if the growth of organised crime is concentrated around certain forms of crime, specific counter measures are required. For example, if the police is correct in its assessment that drug trafficking is a major area of activity for organised crime groups, then tighter border controls, money laundering legislation and better resourced drug rehabilitation centres could be considered.
Such focused counter measures might be more effective than the promulgation of a catch-all piece of legislation such as the Prevention of Organised Crime Bill which seeks to combat all forms of organised crime and criminal gang related activities at high cost to civil liberties and due process rights.
Compiled by Martin Schönteich
Parliamentary Affairs Manager
South African Institute of Race Relations
23 September 1998