Ebrahim Moosa - Opinion | 16 October 2017
There has justifiably been an eruption of outrage in South Africa over ‘state-capture,’ directed at both the opportunistic familial magnates looting the state, as well as the civil servants and enterprises enabling their corruption.
Of late, even a handful of multinational corporations have become fair game for rebuke and calls for retribution. Included amongst these are accountants KPMG, public relations firm Bell Pottinger, consultancy McKinsey & Co. and software company SAP SE, who all stand accused of facilitating, being party to or turning a blind eye to dodgy deals involving the Guptas. Some of these corporates have already fallen to the sword, whilst others remain caught up in protracted legal and PR battles, seeking to assert their innocence.
The penchant for accountability in this climate is indeed admirable, as corruption – more than anything else – exacts its most painful toll on the already less privileged.
South Africa has consistently ranked as one of the most unequal societies in the world, and as is widely acknowledged, the consequences of a prolonging of this status quo will be devastating on our social fabric, and continued stability as a nation.
State capture, and corruption in general‚ and among the enablers of this continued inequality, and as such, have to be dealt with decisively, given its profound consequences for the average person on the street.
Says Richard Calland of the University of Cape Town, “It steers public monies‚ which could be used for social and redistribution of wealth programmes‚ towards the pockets of a small number of people‚ who in the process‚ conspire with those in fiducial relationships with the voters and boards of State Owed Entities.”
“This is precisely what is compromised when you take the wealth of a nation and divert it into a slow horse‚ fast cars‚ loose living and Dubai,” adds Paul Hoffman of the Institute of Accountability. “By doing this you make it difficult to develop a state and push it closer to a failed state.”
What is curious, however, about the current fit of outrage directed at companies and individuals implicated in the Gupta charade is that similar calls for accountability and walkouts were almost non-existent in the numerous other cases where corporates harmed our social fabric, and undertook actions that were undeniably corrupt, and which had the effect of deepening inequality in our nation.
Setting aside the role played by capital in entrenching apartheid, there still remain a long line of examples to cite, many from just the past decade, of other corporates who were brazen in their theft and subversion of the public.
To list but a few:
Bank collusion – From at least 2007, several leading South African and international banks are alleged to have connived in price-fixing and market allocation in the trading of foreign currency pairs, thereby undermining the value of the Rand.
Breadgate: Six years of scheming between big bread bosses nationwide culminating in inflation of bread prices and limiting of consumer choices. It was revealed that it was general practice in the industry for the implicated bakeries to all raise their prices at more or less the same time, all in the hope of preventing consumers from switching to a cheaper brand. The result, said the Competition Tribunal, "was that the poorest of all South Africans paid more for their bread than any other person."
World Cup construction cartel: At least seven major construction and engineering firms met secretly twice in 2006 to allocate tenders on World Cup stadium projects and to agree on a 17.5 percent profit margin.
Fresh produce cartel: Allegations that South Africa’s largest fresh produce market agencies are slashing prices to undercut market entrants, most notably emerging black farmers. The Competition Commission accuses the companies of agreeing to charge “way below” market price in the mornings, forcing smaller competitors to match the low price, and then increasing prices later in the day when the smaller competitors have run out of stock. This would force new entrants to the market, to close as they would sell their stock below market value, without sufficient stock to continue trading when agents increase their prices.
Most of these corrupt and anti-competitive practices have been investigated and, in a number of cases, prosecutions have followed and hefty fines have been imposed.
The hypocrisy of the current state-capture fiasco, however, lies in the fact that all these serial perpetrators continue with business as normal today, without the faintest fear of boycott for their past behaviour, nor any stigma attached to their brands.
To the contrary, many of these tainted corporates are the darlings of investors and a media which otherwise deems itself a voice of moral authority and a guardian of the public interest. Noteworthy mentions among those implicated in the aforementioned crimes are the likes of Standard Bank, Absa, Barclays, Investec, Pioneer Foods, Tiger Brands, Murray & Roberts, Group Five, Basil Read and more.
In a column published by the Daily Maverick in 2013, journalist Ivo Vegter argued that public sector corruption is, by its very nature, more abhorrent, as its consequences are borne primarily by taxpayers and citizens. Private sector corruption, he implied, could not be deemed to be of equal footing, as the affected parties are limited to individual clients and investors, who are far less in number than, for instance, the total citizenry affected in a country rampant with corruption.
The distinction is justified. However, from the aforementioned examples, it is clear that the prominent role many corporates now play in handling daily essentials of South Africans, as well as being agents for government in developing our infrastructure and trading in the national currency, shifts them from functioning in a purely private domain to one where they become accountable to the wider public for their actions.
Just like the Guptas, KPMG and its ilk have been hauled over the coals for being enablers of corruption and impeding national progress, the demands of this new playing field dictate that other corporate crooks too be made to feel the pinch for their actions.
Sacrificing one perpetrator at the altar of public opinion, whilst allowing other big fish to escape scot free, lends itself to strengthening perceptions that corruption in South Africa only becomes blameworthy when perpetrators fit a particular predetermined profile.
The benchmark for walkouts, calls for boycott and accountability from companies should be uniform. All those who through their corrupt shenanigans harm the national interest and entrench inequality should be called out, irrespective of their standing, connections of identity.
We can stand determinedly against the self-serving looting of the Guptas, but that should not stonewall criticism or the exacting of accountability from other players.
As Professor Steven Friedman has asserted, we have to insist that these inconvenient conversations happen despite the attempts to discredit them.
We can reject state capture, whilst still taking seriously calls for a fairer economy, and a more equal distribution of wealth in an ailing South Africa.