Angry appeals show true colours of business
Published in Business Day on 13 January 2009
JACO BARNARD-NAUDÉ
THE apartheid reparation cases in the US courts continue this week amid news that similar cases are now being prepared in Europe. The corporations that have been sued in the US have done everything in their power to resist these claims and the hearing this week is the latest in a long series of appeals against court judgments in favour of the claimants.
It is an understatement to say that big business, abroad and in SA, has generally spoken out against these claims — it condemns them in the strongest possible terms. Daimler- Chrysler has gone so far as to say that it will terminate most — if not all — of its operations in SA should the claim against it proceed.
Business’s dismay with the reparation cases is, of course, hardly surprising to anyone familiar with the capitalist fundamentals of big business. Big business makes big profit — that is its raison d’etre. The degree to which big business will voluntarily contribute to charity or take responsibility for other social ills depends on whether such activities will contribute to the overall maximisation of shareholder wealth.
From this point of view, the idea of reparation is repulsive because it would signify an admission of responsibility for apartheid era atrocities; it would signify that somehow the maximisation of shareholder profit during apartheid was undue.
The ultimate message of neoliberal capitalism of this ilk is often formulated in the ambiguous slogan that “capital” — the disembodied idol of big business — is not, and cannot be expected to be, moral. This also forms the basis of business’s appeal in the courts this week: corporations are not moral agents. Given that this is the general mantra of neoliberalism, it is no wonder that the only way to get business to take social responsibility is to force the “moral agents” — the people who form and associate in these businesses — to do so by legal means.
When SA was in the first moments of its transition from totalitarian rule to constitutional democracy, big business feared for a moment that the new government would put two and two together and realise the huge role capital had played in extending the life of the military industrial complex.
Big business feared that the new government ( brimming as it was with former “communists”) was going to get it into its head to hold it to account for some of the atrocities, such as, for example, the one that happened at Gencor’s Kinross mine on September 15 1986. That morning more than 170 workers were killed in an underground polyurethane fire. Of these, 152 were black. The mine published only the names of the dead white workers. The deceased black workers were identified only according to their ethnic group.
By December 1997, when the Truth and Reconciliation Commission (TRC) concluded its three days of hearings on the role of the business sector in the perpetration of what is an officially recognised crime against humanity, it was clear that big business had nothing more to fear. The hearings took, for most part, the form of a to-and-fro about whether apartheid was good or bad for capitalism. Now and again, the question regarding undue benefit was raised but business repeatedly declared its indignation with any suggestion that apartheid allowed profits to soar.
The TRC did not have the power to order big business to pay social reparation to the amount of billions of rands — it could only recommend this to the government. This it did. The government decided to ignore the recommendations. After all, the Berlin Wall had fallen, philosopher Francis Fukuyama had declared neoliberal democracy as the “end of history”, and SA needed to take its place in the global village.
So the “reparation” that was forced on big business took the form of affirmative action and black economic empowerment. It remains doubtful whether these have succeeded or are succeeding in bringing about the kind of redistribution of wealth that can be said to address the structural inequalities left by apartheid.
In the meantime, business has had to rely as recently as a year ago on a “socialist style” bail-out to save capitalism. It seems that state intervention is acceptable to the corporate hegemony only when it is ultimately geared at resuscitating the “free” market.
In the same week that the apartheid reparations cases are in the news, speculation is mounting that apartheid- era perpetrators, such as Eugene de Kock, will be given a presidential pardon — which is conceptually not very far removed from amnesty.
One of the strongest and most valid criticisms of the TRC process was that there was nothing in it that would countervail for victims the benefits perpetrators received through amnesty. That criticism is as applicable now as it was to the TRC more than 10 years ago.
The Zuma administration has indicated its support for the apartheid reparation cases — which is a step in the right direction, one supposes, if judged against the vehement opposition the Mbeki administration displayed against these claims.
Nevertheless, it seems that the South African government is assuming the stance that reparations are tolerable — as long as it is not actively involved in the process . Only time will tell whether it is pardons or real reparation that win the day. Needless to say, my money is on reparations.
- Barnard-Naudé is associate professor of jurisprudence at the University of Cape Town and a director at the Institute for Justice and Reconciliation.
I too support these reparations suits but I have to say, it strikes me that the need for them, given some of the content of Professor Barnard-Naude’s piece, is regrettable.
I have never had occasion to consider reparations cases. But drawing on some exceedingly hasty and general reading, reparations suits founded on the commission of wrongs are, at the core of it, wrongful gains-based cases. That is, the claimant advances that the wrong committed by the defendant is causally connected to a gain which the defendant made. Thus the claimant seeks not the quantum of its loss but rather the extent of the defendant’s gain. And as I roughly understand an apartheid-based wrongful gains claim: big businesses are the wrongdoers. These businesses bolstered the apartheid government. That activity of propping up the apartheid state enabled that state to commit atrocities. There is a causal linkage between the support that businesses gave to the state which enabled that state to commit abuses on the one hand, and profits generated by those businesses on the other. The claimants seek to recover those gains from the businesses.
As I have already mentioned, I am still pretty new to the substantive allegations for such lawsuits. (Although it should be said that a little experience with tort law renders the substantive requisites for wrongs-based reparations cases fairly accessible inasmuch as the basic goal seems to be to stop thinking about the complainant’s loss and to start thinking about the defendant’s gain.) But even though I am still finding my reparations feet as it were, I believe that these claims, as Professor Barnard-Naude eloquently makes out, are a good way to get a little justice around here. For a start, and as he puts forward, the efficacy of affirmative action in addressing the structural inequalities left by the apartheid regime is at least questionable. In short, we may well need to find a better way to get that sorted. Second, it was, and continues to be, naïve to think that big businesses will run the risk of prejudicing their income-generating potential by admitting to (a) being at all complicit in the commission of apartheid atrocities and (b) cementing such admissions by making honourable payments to those who were wronged. So if we are ever to see them cough up for their role in the commission of past wrongs, we need to find a better way.
These claims, as I suggest in my opening paragraph, are at once desirable and unfortunate. I have already said a few words as to why I reckon these lawsuits are appealing. But to turn to why they are a cause for sadness: these wretched corporations dismiss so easily the words that ask for justice. They react only to the sword that will fight for it. And that is precisely why people have to resort to litigation. If the need for these reparations suits is to be summed up in a single turn of phrase, well then we can all of us identify a worthy nomination easily enough: corporate greed, plain and simple.
I too support these reparation suits but feel a bit uneasy about their execution. Its a bit like opening pandora’s box. When one thinks about all the players at the time of apartheied, the foreign corporations are the only ones (and the richest) that are identifiable. A bit like sitting ducks for the taking. The local personal perpetrators have been covered by the TRC. Then the question arises as to who benefited? Not only the “military machine” benefited. Jobs were created for white and black alike. And not all whites were guilty of being willing participants in atrocities, in fact very few knew of the extremes it went to. It is not a case that one can fight without emotion. When speaking of corporate greed, one is guaranteed to summon the support of all that are helpless employees in the corporate treadmill, but considering the fact that profit is not illegal, in fact it is essential to maintain a corporation’s survival, it becomes too technical and boring to engage any interested parties. When profit becomes excessive, and also forced to increase by X% a year by shareholder pressure, I agree it becomes gluttonous and when the excess can be quantified, and the extent that funded the offending regime, then a case might be feasible, but I fear that is a pipe dream which may waste more legal fees than the outcome will be worth. The lawyers may get to a figure, but what do they know about finance I wonder.