The Zondo Report has clearly fingered the enablers of State Capture – now it is time for fair and meaningful reparations
Seldom do democratic governments institute full public investigations into their own complicity in maladministration, malfeasance, corruption and abuse of office while in power.
In South Africa, however, former president Jacob Zuma was forced by a court order to institute the Zondo Commission back in August 2018.
The result of nearly four years of public judicial inquiry into SA’s “State Capture” was an authoritative 5,500-page report into the systematic looting of state resources on a scale unimaginable by most South Africans.
Most infuriating and disappointing was the fact that the State Capture scheme was led from the very heart of Cabinet, driven by a few ministers and executed by an army of bureaucrats who were “ANC deployees” in government departments and large stateowned enterprises such as Eskom, Transnet, Denel and South African Airways.
Although the political impact of State Capture is currently a work in progress, there are lacunae in public engagement around the findings of the report that can and must be highlighted and taken forward.
Chiefly, these relate to the economic, business and financial shenanigans of deals in the State Capture project that have been largely overshadowed by political noise.
Understandably, the Gupta family and their business enterprises have become synonymous with State Capture. Though they certainly have much to account for, it would be a travesty of justice if the other business enterprises were not called to account.
Hidden in the political cacophony is an equally bruising fact: State Capture was facilitated by a number of local and international corporations including, but not limited to, global banks, major audit firms such as KPMG and PwC, global consulting firms such as McKinsey, Bain, the German IT company SAP, Japan’s Hitachi, the US’s General Electric, mining companies such as Glencore, a number of law firms and other business enterprises.
Dealing with these financial behemoths is, in my view, a national strategic imperative for at least two reasons. First and foremost, the SA business sector, broadly defined, is at present infected by the impact of State Capture and the role of the private sector.
Integrity reboot
Unless SA finds a solution for rebooting its macroeconomic integrity and investor confidence, no amount of political and ideological posturing has any chance of success. This is irrespective of the political party in charge of government.
It would certainly be naive to assume that the mere acknowledgement of malfeasance and expressions of regret by Bain, SAP, Mc-Kinsey and others are sufficient to expunge the cancer cells of corruption and misconduct from the SA business sector and the global corporations active in the country.
The McKinseys and Bains of the world have gone so far as to “whitewash” their “mistakes” with the full support of private sector corporations in SA and the failure of public sector regulatory bodies to perform their duties.
A case in point is KPMG, which parted ways with its executives implicated in the Zondo Commission report by offering them “golden handshakes”. None accounted for
The overarching objective of the initiative has to be grounded in the restoration of social justice and salvaging the country’s fragile
democratic order
their criminal conduct, nor did KPMG offer any compensation for its scandalous corporate misconduct. A notional donation of a few million rands by KPMG was more of an insult to the injury caused.
The SA audit regulatory body also did close to nothing. Likewise, Bain SA’s managing partner’s apology to the country – published recently in a national newspaper – typified the crocodile tears of colonial apologias.
Similarly, McKinsey used every trick in the book to cover up the role it played in bringing Eskom to its knees.
Democracy at risk
Second, and related to the first, is the emerging reality that SA’s constitutional democracy is at serious risk owing to the consequences of State Capture. What can only be described as grand larceny through the looting of public resources and hollowing out of the state has set the country back by at least a generation.
Without ignoring the financial crises globally and other exogenous factors during this period, the fact of the matter is that the parlous state of the country’s fiscal and governance institutions has left South Africa unable to unlock its growth potential.
The country is now wrestling with a vicious circle of low growth, sagging business and citizen confidence, the bottoming out of human skills, faltering development prospects, further impoverishment and the spectre of hopelessness.
This is at a time when SA still has considerable growth potential and above-average natural resources and investment opportunities to turn the tide and improve the lived realities of the majority of the population.
However, positive turnarounds are seldom, if ever, automatic. They require intentional and appropriate actions.
To this end, one key and critical strategic intervention is the immediate implementation of an international reparations case against all locally and internationally implicated business entities.
Such a reparations project has to be structured with a view to achieving a fair outcome so as to deal with three interrelated outputs: disclose the nature of their involvement and the full extent of public resources looted; disclose the details of political and public sector collaborators, partners and co-criminals; and draft a new Ethical Charter for business codes of conduct to be signed by each implicated entity, and others. Such a charter would have punitive financial and nonfinancial penalties for firms and their implicated executives and boards of directors.
Effectively tackling the country’s triple evils of poverty, unemployment and inequality is not possible without the active and sustained participation of the business sector. But a corrupt business sector cannot be a reliable partner in turning around the grave circumstances we face in SA. Not only do the government and governance institutions need to regain the trust of citizens but the business sector also requires the confidence of the nation as good corporate citizens.
National campaign
I want to suggest that a national reparations campaign is now needed to establish credible and capable structures to give effect to the technical and sociopolitical requirements of reparations calculations. The Zondo Commission has already generated the vast body of data needed for such an ambitious endeavour.
But the oversight of such a reparations campaign and its technical calculations needs to be entrusted to nonpartisan personalities with established credentials and unquestionable integrity, supported by the government and the judiciary.
The overarching objective of the initiative has to be grounded in the restoration of social justice and salvaging the country’s fragile democratic order. As a corollary, a tangible improvement in the lives of the poor and the marginalised in the short to medium term is the ultimate goal.
Fortunately, the culprits have mostly acknowledged their complicity in crimes of malfeasance, the promotion of corruption and even what Ismail Momoniat, acting director-general of the National Treasury, regards as “treason” in the case of Bain.
The noble task before us falls on the calculation of fair and meaningful reparations.