[DEBATE] : (Fwd) Khadija Sharife on apartheid reparations

[Patrick Bond]

Fixing the Legacy of Apartheid
Khadija Sharife | April 29, 2009
Foreign Policy In Focus
www.fpif.org

It’s still there nestled in a box as a painful keepsake: the “none 
blacks” placard I stole as a toddler from the door of a café in Durban, 
where my mother — who easily passes for a European — met a white friend 
for coffee. “My four-year-old daughter did that for fun,” the café owner 
explained. “They know not to come here.” That wasn’t strictly true: the 
flapping kitchen door revealed a black woman wearing a hairnet, gloves, 
and an apron: less a human being than a human resource.

Of course, that world of apartheid — of racial domination via political 
and military subjugation — is long gone. Yet after more than 15 years, 
several democratic elections, and countless celebrations of political 
legends such as Nelson Mandela, Oliver Tambo, and Steve Biko, the 
economic system that underpinned the apartheid regime has yet to be 
acknowledged — or fully laid to rest.

But with a recent ruling that opens the way for suits against the 
transnational corporations that supported apartheid, the South African 
government must now confront the economic skeletons in its closet.

Economic Compromises

Soon after the 1985 crash of the South African stock market and the 
government-imposed moratorium on repaying $14 billion in outstanding 
debt, former president Thabo Mbeki negotiated several “historic 
compromises” on the part of the African National Congress (ANC). In this 
way, the new South African government obtained political freedom but at 
a price: economic capitulation. This was, according to noted academic 
and commentator Ali Mazrui, “Black people assuming the crown of 
political power and white people retaining the jewels of economic 
prosperity.”

These compromises included a blanket corporate amnesty and the 
ratification of the General Agreement on Tariffs and Trade (the 
precursor to the World Trade Organization). The new government also 
honored all apartheid-era debt (estimated at $24 billion in 1994). 
Finally, South Africa accepted the structural adjustment-like policies 
of international financial institutions such as the International 
Monetary Fund’s 1993 “Christmas gift” of $850 million with its built-in 
economic austerity and the Growth, Employment, and Redistribution 
Program, formulated under the eye of the World Bank that endorsed the 
inherited policies of the apartheid regime.

The apartheid regime, falsely packaged as a pure pigmentocracy, relied 
overwhelmingly on corporations anxious to access South Africa’s vast 
stores of natural resources. There was gold and diamonds. There were 
deliberately cheapened sources of labor. And there was a huge market for 
banking, oil, automotive, technology, and other products and services. 
This corporate lifeline financed, facilitated, and sustained a regime 
that the UN declared a crime against humanity. Apartheid-era Prime 
Minister John Vorster identified this corporate support as the “bricks 
in the walls” of the regime’s “continued existence.”

This regime and its rand lords have receded into the annals of history. 
Yet the global apartheid enforced by dollar lords via the Washington 
consensus has never really left.

But this may soon change.

Let the Lawsuits Begin

Several weeks ago, U.S. Judge Shira Scheindlin gave the green light to 
plaintiffs litigating multinationals charged with aiding and abetting 
the apartheid regime. Though Scheindlin pared down the reparation 
lawsuits, she found that automotive, technology, and defense 
corporations such as Daimler, IBM, Fujitsu, Ford, General Motors, and 
Rheinmetall did indeed knowingly aid and abet a regime that engaged in 
torture and extrajudicial killings.

This should not come as a surprise: Prime Minister P.W. Botha’s Defense 
Advisory Board, for example, composed of top business leaders from 
Barclays, Anglo-American, and other corporations, advised him from the 
inside on the apartheid regime’s security policies that were integral to 
industry.

The U.S. and South African governments blocked the initial lawsuits 
filed in 2002 by South African writers and activists such as Lungisile 
Ntsebeza and Dennis Brutus as well as Jubilee South Africa and the 
Khulumani Support Group. Initially, the South African government under 
former Minister of Justice Dullah Omar had vowed to remain neutral. That 
would change after Colin Powell, on behalf of the Bush administration 
approached Omar’s successor, Penuell Maduna, in 2003. Prodded by 
Washington, Pretoria ultimately invoked national sovereignty in opposing 
the lawsuits.

The South African government claimed that such legal actions would 
discourage foreign investment. It also argued that the Truth and 
Reconciliation Committee (TRC) had already addressed reparation issues. 
Finally, it suggested that the case — to be prosecuted via the Alien 
Tort Claims Act — amounted to judicial imperialism. In this way, the 
South African government undermined the constitutional rights of its 
citizens to seek redress through legal means. This stance was a key 
component of the defendants’ joint motion to dismiss.

The government’s objections don’t hold water. In her decision, 
Scheindlin quoted former World Bank economist Joseph Stiglitz’s argument 
that “suits seeking to hold foreign companies accountable for their 
unlawful collaboration with a prior regime will not discourage foreign 
investors from investing in that country in the future.”

Moreover, the TRC has a different perspective than the government on 
this matter. Though mandated to investigate individual wrongs, the TRC 
submitted an amicus brief in August 2005 arguing that multinationals 
never applied for amnesty; that lawsuits on the part of private citizens 
neither undermine nor conflict with the constitution, courts, or 
government or with the processes of the TRC; and that private 
corporations may be held legally and legitimately accountable as a 
matter of civil law.

“To the contrary,” wrote Scheindlin quoting from the TRC’s report, “such 
litigation is entirely consistent with these policies and the findings 
of the TRC.”

Sadly, on narrowing claims, Scheindlin dismissed the accountability of 
the banking sector, although foreign banks repeatedly financed and 
rescheduled outstanding debt. As late as 1989, foreign banks 
collaborated to reschedule $8 billion in outstanding loans on very 
lenient terms. They provided no such leeway for the liberation government.

Civil Society Triumph

That Scheindlin is willing to hear the case signals a triumph for civil 
society. It represents a global victory for human and environmental 
rights activists and for the many victims of the apartheid regime.

Tens of thousands of South African plaintiffs now hope for a settlement. 
In addition to Judge Scheindlin’s decision, there has been political 
change in Washington and Pretoria: President Barack Obama once lobbied 
for corporate divestment from apartheid South Africa and apartheid foe 
Jacob Zuma will be taking office as South Africa’s president on May 9.

While the ANC’s basic economic structure remains largely intact, Zuma 
has stressed that by setting priorities such as a strong safety net and 
investing in job creation, the ANC can make a difference. There’s no 
indication as yet regarding Zuma’s position on the reparation lawsuits.

And yet, regardless of the government positions, this landmark decision 
sets a global precedent for corporate accountability and transparency. 
By finally laying to rest the ghosts of apartheid, the lawsuit may well 
usher in similar moves targeting the economic systems of global apartheid.

It’s time for South Africa to be the compass of the world — again.


Foreign Policy In Focus guest columnist Khadija Sharife is a journalist 
and visiting scholar at the Center for Civil Society (CCS). She’s based 
in South Africa.