Corruption: Apartheid's Inconvenient Truth

2013-07-31 04:33

Turn the knob. You will find untold truths about South Africa’s transition. These truths, often inconvenient, reveal a counter-narrative to the worn-out South African story.

Ours was a staged transition. The props on the stage shifted marginally: political power slightly to the left, economic power remained stationary, and the state was tinkered with lightly. The haughty actors, Captains of Industry, never quite changed their tack. The stage was set.  Almost everyone attuned themselves to the melody of the transition, except corporate South Africa.

The recent furore over ‘Constructiongate’, the unimaginative tag for one of South Africa’s biggest corruption scandals, has left us with more questions than answers. The scandal is not the first of it’s kind. In 2010, Pioneer Foods, Tiger Brands and Premier Foods were found guilty of bread price fixing, in turn, increasing the cost of bread to consumers.

Cartels they call them. A different shade of scandal, not dark enough to be scorned at and not light enough to be ignored.

The reportage of the scandal was interesting. It helps to know that ‘Constructiongate’ has been public knowledge as early as March 2007. Why did the scandal receive so little attention? Our media is supposedly preoccupied with scandal, one would guess that they would’ve picked this one quickly.  Why did it take so long for the proverbial name-and-shame to happen?

It is difficult to invalidate these questions.  It is also true that, sadly, these questions do not allow us to dig deep enough. They offer little room to probe the nuances that define corruption.

Corporate South Africa and White Exceptionalism

The year is 2013 and you’re asked to write a telegram on corruption in South Africa. You would most probably end up with something like this: “Public sector bad and private sector good, white good and black bad.” Luck is on your side because popular opinion will probably support your assumptions.

The counterpoint to this is simple. Corruption is not ingrained in any race, it is not a phenotypical trait that black South Africans have. Corruption is not a deep-seated malady that exists in the public sector only.  ‘Constructiongate’ got me digging and thinking about how little corporate South Africa has changed after South Africa’s transition. By change, I mean real structural change. Save the handful of bills, regulations and charters – I’m more concerned about the ‘DNA’ of corporate South Africa.

It is public knowledge that big business has always been a force for good and bad (in varying levels) in South Africa and elsewhere in the world. It is also widely known that the system of Apartheid was not only modelled around draconian laws and systemic exclusion, but around the inner-workings of big business as well.

For the most part, the lines between the public and the private were most blurred during the Apartheid more than ever. Business, save for the church, was one of the Apartheid regime’s biggest partners.

The most noticeable feature of this is the Afrikaner Nationalist movement, The Broederbond. A secret organization that effectively controlled the major organs of the state, academia and big business. The 12000 member strong organization was the preserve for the wealthy and white Afrikaner elite. The Bond had uncumbered influence over the National Party’s policies, leadership debates and squabbles.

More significantly, the Bond mastered the art of patronage. It’s members, Afrikaner white educated males, were parachuted to the highest levels in government, business and elsewhere. The net effect: blurred lines that enabled Apartheid corruption and patronage to not only thrive, but to be concealed as well. Big business and the state hacks were at the centre of it all.

If you want to be enthralled by the level (and nature) of corporate corruption in Apartheid South Africa, the 2005 113 page dossier titled ‘Apartheid’ Grand Corruption’ will entertain you. The report author, Hennie Van Vuuren details a myriad of economic crimes (both public and private sector) that debunk many myths.

Van Vuuren points out that ‘macro-economic co-operation between business and apartheid regime was a common conspiracy.’ The Infogate Scandal, Swiss bank accounts, capital flight, fraudulent invoicing and other types of covert crimes are all detailed in this dossier. Simply put, Apartheid as an unjust system was sustained through the acts of corporate South Africa working in tandem with government and politicians.

But Van Vuurren’s report is also important for our current dilemma.

This argument needs to be made – the nature of South Africa’s corruption is intergenerational. Those who were involved in acts of corruption before 1994, unjustly benefit from the fruits of democracy, even while they have not changed their tack.

The Staged Transition and it’s Bitter Fruits

Much has been said and written about South Africa’s transition. For the most part, much of this will soon appear as fiction in the annals of history. Our staged transition was partly a cop-out. The compromise meant that much was traded of for not only little, but for unwanted fruits as well.

The state in 1994 was virtually bankrupt. The sanctions in the late 80s and early 90s closed off South Africa’s trade corridors to the rest of the world. The unmatched looting by the Apartheid regime and it’s associates didn’t help either. Sure, the 1994 election brought significant political change, but other realities, like the hands that control the economy, education and labour remained untouched.

One of the transition’s bitter fruits is that some of the most significant issues were presumed to be too politically sensitive. The result: a number of deals brokered (known and unknown) to facilitate the transfer of political power. Sadly, a number of things remained untouched – corporate South Africa’s inner DNA or culture is one of these.

There has never been any real incentive for big business to change it’s tune in post-apartheid South Africa. If anything, big business has had the time of it’s life in the ‘new South Africa’. The ‘white male’ archetype still calls the shots and the spoils of war never trickle down to those at the bottom. And corruption, like any bad chronic disease, continues it’s reign in corporate South Africa.

Apartheid created a liability-free and laissez-faire environment for big business to thrive. This in turn worked in the regime’s favour.

The transition did not alter this, it couldn’t. The economy was (and still is) in the hands of a few who could in turn decide what they want to do with it. So, it shouldn’t have come as a surprise that eighteen construction head honchos could call a meeting to fix prices and collude. The same conditions that enabled them to thrive decades ago continues to serve them.

The apology by Murray & Roberts CEO, Henry Laas is a good illustration of corporate South Africa’s arrogance. You might be tricked into thinking that his earnestness is a good thing, until the odd moment in the apology where he asks for Murray & Roberts not to be ‘penalized too significantly.’

The cracker goes like this:

“We accept that Murray & Roberts should be penalised for it’s historic collusive conduct, but not to the extent that it will significantly handicap our ability to contribute towards future infrastructure development.”

A nice way of having you cake and eating it.

With each passing day, the story of South Africa’s transition becomes clearer. Much was given and little was given back in return. Very little has changed. Had the transition been a true changeover, corporate South Africa would be singing a different tune.


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