Apartheid Reparations and Foreign Investment

Could IBM, Fujitsu, Ford, General Motors , Rheinmetall and Daimler be guilty of “knowing participation in and/or aiding and abetting of the crimes of apartheid; extrajudicial killing; torture; prolonged unlawful detention; and cruel, inhuman and degrading treatment”?

Should they be tried for this crime in a US federal court?

If they are found guilty should they jointly pay billions of dollars to a group of black South Africans who have brought the class action suit under the peculiarly named Alien Tort Claims Act in the New York federal court?

Here is a copy of the ‘Second Amended Complaint’ including a list of plaintiffs and defendants that is available on the Khulumani Support Group (an Apartheid victims support organisation) website. It spells out all the ways in which the plaintiffs believe each company or category of company became guilty of a crime by  bolstering, arming or funding the Apartheid regime. Note that since this time the list of defendants has been narrowed to those mentioned in the first paragraph of this post.

An interesting aspect of this fascinating drama is that Thabo Mbeki’s government openly opposed this case on the grounds:

  1. it threatened South Africa’s sovereignty to try such a matter in a  US court, especially because the much praised domestic negotiation  had agreed that the Truth and Reconciliation Commission was the binding forum and chosen process;
  2. it would discourage foreign investment.

Jacob Zuma, on the other hand, has removed government’s objections to the process and last year had Justice Minister Jeff Radebe write to the American court and tell it the South African government believed the US court to be “the appropriate” place in which to resolve the matter.

The Zuma regime was surprisingly joined by the Obama regime in endorsing the US court as the appropriate place for the motion to proceed. The amicus curiae brief the US government sent to the court is a useful summary of the facts of an extremely complicated matter and can be read in full here – I found the link on Simon Barber’s excellent “American Notes”  blog.

The go-ahead for the US court to hear the matter from both the US and the South African government is based primarily on the fact that while amnesty would have been the result of full participation in the TRC process, the defendants – and, in fact, most businesses operating in Apartheid South Africa – never participated in the process. Thus there was relatively minimal disclosure (at the TRC anyway) of business’ dealings with the Apartheid regime and hence no amnesty.

The founding myth of the Rainbow Nation is that we have dealt with the past and go into the future with knowledge and forgiveness. The case in the US federal court challenges this assumption and asks some extremely difficult questions that have consequences way beyond South Africa.

Here are some of the questions as I see them:

  1. The TRC process failed in a number of ways; will cases like this one help redress the failure, or will they undo the few successes – with regard to reconciliation and forgiveness – the TRC did have?
  2. The TRC process created a collective victim group and a collective perpetrator group in a way that allowed single people (including legal persons) to avoid carrying the can or receiving any significant compensation for Apartheid human rights abuses. Won’t legal processes with more clearly defined defendants and plaintiffs redress this?
  3. Won’t raking the muck of the past continue to cause conflict and division, especially between black and white South Africans in the present and the future?
  4. How does a publicly owned company that has operations across the globe assess risk associated with politics in the countries in which it operates – especially when oppressive governments are its direct clients and customers? Recent examples might include Nestle in Zimbabwe and Google in China.
  5. If the domestic government is not a customer, it still sets a regulatory environment that might make the company guilty of an offence if it complies with the law. Yes?
  6. Is disengagement from a particular country dominated by an oppressive government always the right approach?
  7. What does this say for domestic businesses?
  8. Should aspirant black business men and women have refused to accumulate capital in Apartheid South Africa – except as criminals?

The list of questions could probably go on ad-infinitum, but that will do as a start.

One thing you may have noticed I left off was the Mbeki government’s first objection based on the fact that such cases might deter foreign investment. Such cases might place more onerous due diligence requirements on any company that operates across borders and in countries where governments might become guilty of human rights abuses. No company is specifically going to punish an ANC led, democratic South Africa if a US court finds it culpable of bolstering the previous NP led Apartheid South Africa. It’s not logical and it is not in the company’s interests.

One thought on “Apartheid Reparations and Foreign Investment


    The Editor ,
    Cape Times .

    Dear Madam ,

    It is sumitted that the editor cannot see the wood for the trees .( editorial ,
    Bad Company , January 12,2009,page 8 ).
    Or , to put it more kindly, has the editor deliberately failed to focus on the U.S Government’s
    risk potential of laying itself open to reparation claims , in the trillions of dollars ,from all the millions of its its own citizens,
    who over the generations , were the victims of slavery ( many people would argue , however, that slavery was a blessing
    in disguise for the descendants of U.S. slaves , who were spared the horrors of being born an African in the benighted African comtinent ) .
    The vicims of U.S slavery and South African Apartheid – who will receive priority from the American Goverment for its largesse ?
    What has the editor to say ? Will readers be treated to some out -of-the- box thinking ? Or will it be left to some or

    other wise “Intellectual “( acting as a shill for the Cape Times ) , to point the likely way forward in the Insight pages ?
    One thing is sure , the issue of reparations for slavery will set (bankrupt America ) on fire, so to speak .
    What with slavery , and Apartheid , reparations , one really has to pity the poor American taxpayer . Just where is all the
    filthy lucre to come from in the Alice-in-Wonderland country that is the U.S.A
    Incidentally , don’t forget that reparations -addicted third-world Africans ( the S.A goverment included) are handing out the begging bowl s to Amerca

    for yet more alms to compensate them for U.S pollution induced climate change ( or is it climate warming ? )
    To cap it all , Archbishop Emeritus Demond Tutu has called for a Marshall Plan-type handout to prevent the South African
    “powder keg from exploding ” ( see Ms, Ella Smook’s Cape Argus report of February 13 , 2009 , page 8)
    Yours faithfully ,

    Norman Clemo .

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