About this site

This resource is hosted by the Nelson Mandela Centre of Memory, but was compiled and authored by Padraig O’Malley. It is the product of almost two decades of research and includes analyses, chronologies, historical documents, and interviews from the apartheid and post-apartheid eras.

Cronyism

According to Transparency International (TI) corruption declined slightly in 2006, although the country dropped five places on the TI's Corruption Perceptions Index (CPI) On the Index South Africa scored 4.6, compared to 4.5 in 2005 but the country ranked 51st compared to 46th in 2005. I63 contrives were ranked in the survey. With a score of 4.6 SA failed the official test of 'honesty: as did all countries in Africa except for Botswana ranked   ( 5.6) and Mauritius ranked 42nd ( 5.1). (a perfectly 'honest ' country would score 10).

"The prosecution of leading politicians for corruption, the increasingly common demand for bribes by the police, and the massive wealth accumulated by some of those who wield power in post-apartheid South Africa have generated a growing public perception that graft and the abuse of office are increasingly widespread. According to a poll released at the World Economic Forum in Davos, 63 % of South Africans believe their leaders are dishonest.  Various high-profile cases have fuelled this perception.

Tony Yengeni, the former ANC speaker of Parliament, was sentenced to four years in prison for accepting bribes from a weapons manufacturer but released after only serving four months and greeted like a hero by ANC leaders. South Africa's police commissioner, Jackie Selebi, has maintained a close relationship with an organised crime boss, Glenn Agliotti, who is accused of the murder of a corrupt mining magnate, Brett Kebble. There is also a series of corruption investigations around the government and other individuals' involvement in a £4 billion arms deal and a British police inquiry into BAE's sale of aircraft to SA."

(Guardian Unlimited, 29 January 2007).

Against cronyism

MAIL & GUARDIAN

11 November 2005 06:40

The three big black economic empowerment deals announced this week suggest South Africa's empowerment process is in a transitional phase. Some interesting new models are being tested. But this does not change the fact that deeply disturbing trends are being entrenched.

The upside is clearest in the case of De Beers, which announced what looks like the most thorough staff empowerment scheme yet, along with a method for channelling some benefits directly to mining communities before debt flowing from the transaction is paid off. If smart women like Wendy Lucas-Bull and Cheryl Carolus can use the proceeds for some genuinely entrepreneurial investment, creating new wealth and jobs rather than just lavishing it on big houses and luxury German sedans, we'll cheer as loudly as anyone.

But tiresome as it is to repeat: the overwhelming impression is of a well-intentioned economic reorganisation drifting toward crony capitalism.

Big business deals probably need to involve individual leaders, and they probably need to feel they are getting substantial benefits -- we are not suggesting that spreading miniscule dividends among rural women's cooperatives is the only way to redistribute wealth. But white-owned companies are still extraordinarily cynical about whom they choose as partners.

De Beers and Sun International both work in heavily regulated industries and depend on good relationships with the government for their wellbeing. Each is notable for including serving or former state officials in its empowerment consortium. Aerosud relies for its existence on offsets and other industrial participation agreements arising from parastatal and government aircraft imports -- so its interests are also deeply enmeshed with the government's decisions.

Ruling party stalwarts and ex-officials are there in numbers, some with the imprint of the revolving door still fresh on the backs of their heads -- Manne Dipico, Popo Molefe, Valli Moosa, Carolus, Max Sisulu and Moss Mashishi, for starters.

Apparently it is no longer enough to exit swiftly from government to emerge on the business stage. Hints of a cooling-off period for officials moving into the private sector seem to be spurring some people into hurried pre-emptive action. Perhaps Ronnie Mamoepa, spokesperson for the Foreign Affairs Department, and Murpy Morobe, who runs communications in the Presidency, are tired of catching flak. Morobe now has a stake in Sun International, while Mamoepa gets a slice of Aerosud.

Nor does the fact that Mamoepa and presidential adviser Titus Mafolo bought their shares from the parastatal Industrial Development Corporation seem to have raised eyebrows. The Sun International deal was facilitated by the Public Investment Corporation, another semi-state body, just 18 months after Valli Moosa quit as a Cabinet minister. Maybe everyone concerned is too boggled to say anything, but this is shameless stuff.

There are some remarkable black entrepreneurs who, without strong connections, are beginning to benefit from the kind of thorough empowerment envisaged by the government's recently released codes of good practice. When they are recognised in these big equity deals, and when the kind of structure that De Beers has developed is the norm, rather than the exception, then we'll know that a sustainable empowerment model has arrived.

If the boot fits, wear it

October 2002: The United States prepares for war on Iraq. South Africa's ambassador to the United Nations, Dumisani Kumalo, succeeds in having Security Council debate thrown open to the general membership of the UN. He makes an impassioned plea for a multilateral solution to the weapons inspection impasse. Unilateral action by powerful nations cannot be tolerated. "The norms and fundamental principles of international law must be our basis to establish the conditions for peace, justice and human dignity."

October 2002: African National Congress funding vehicle Imvume Management trades two million barrels of crude oil under the UN Oil for Food Programme. The Iraqi regime has allocated the oil to Imvume after visits and correspondence from top ANC officials.

October 2005: The UN's Independent Inquiry Committee (IIC) finds that the Iraqi regime turned Oil for Food into an international influence peddling and bribery racket subverting the letter and spirit of UN-mandated sanctions. Imvume, the IIC says, "profited from Iraq's efforts to deliver business opportunities to South Africa in return for political support".

November 2005: Governments as far afield as Australia, France and India promise or initiate probes into allegations levelled by the IIC against their nationals. India's foreign minister, allegedly a beneficiary of Iraq's oil largesse alongside his country's ruling party, is suspended. The South African government has yet to formulate a response, saying it is "studying" the IIC report.

In the days and months before the US-led invasion of Iraq, South Africa was consistent: respect international law and the institutions that underpin it, was its theme. This was not support for a dictator, but of a principle. We applauded.

Conclusion #1: When doing the right thing, don't seek to benefit from it. Your motives will be questioned.

Conclusion #2: The United Nations and international law are not a pair of old boots to be discarded when they don't suit the occasion. When a UN inquiry says our nationals participated in the subversion of international law, we have to act -- even if servants of the ruling party are implicated.

This resource is hosted by the Nelson Mandela Centre of Memory, but was compiled and authored by Padraig O’Malley. Return to the Nelson Mandela Centre of Memory site.