Powerful companies and politicians must be held accountable


25 years after the end of apartheid, South African society has to live with firmly anchored corruption, says Hennie van Vuuren.

25 years after the end of apartheid, South Africa is dealing with the consequences of deep seated corruption and the capture of the state by a small elite. What does this tell us about the state of democracy in South Africa?

Firstly, there is reason for optimism. Most South Africans are not willing to be passive viewers of injustice. It is for this reason that people take to the streets to protest against inequality and state capture. As corruption and patronage networks have come to pervade many public institutions across the country, so too have South Africans’ unwillingness to simply accept the status quo. We see this through protest action at local community level, civil society mobilisation and the work of journalists who courageously expose these networks, large and small. South Africans appetite for democracy remains strong and we will need much more of this energy in the years to come. What we are dealing with right now will not require a simple ‘mopping up’ operation, for change to be lasting we need to fix broken public institutions and waning public confidence in elected leaders who have allowed impunity to flourish.

In your book “Apartheid guns and money” you lay out who profited from economic crimes committed during Apartheid and argue that these activities created the basis for state capture after 1994. How do economic crimes during Apartheid relate to today’s state capture?

State capture is not a new phenomenon in South Africa. Corporations and individuals have a history of profiting from colonialism and apartheid. As Open Secrets has shown through its research, a secretive financial network of shell companies and private banks was essential to the maintenance of the apartheid regime by facilitating the violation of UN embargoes. Along with the commercial banks that bankrolled the apartheid state, those who helped establish this secretive network profited from a crime against humanity. The modus operandi of apartheid’s spies and middlemen is echoed in contemporary scandals. The “GuptaLeaks”, a trove of emails between participants in the state-capture network, has revealed similar patterns of a state captured by private interests. The Gupta network sought to profit by corrupting large-scale procurement at state-owned enterprises, but the bribes, kickbacks and other profits rarely stayed in South Africa. Shell companies and bank accounts were used to siphon off the money while auditors looked the other way or helped legitimise illicit transactions.

There is another thread that we have found, which shows how weapons companies who secretly armed apartheid, such as German submarine manufacturers, aided the apartheid regime and corrupted the democratic government of Nelson Mandela. In a similar vein French arms companies that were friends of apartheid allegedly corrupted former South African President Jacob Zuma. His fight against being held to account for this in court meant that he weakened the country’s anticorruption institutions just at the time that he and his family became close allies of the corrupt Gupta family. The stage was set for state capture.

What effects does state capture have on the support for and trust in democracy and its institutions among South African citizens?

A lazy way to quantify corruption, like the World Bank does, is to place a large price tag on corruption. This leads to staggering facts which suggest that corruption ‘costs’ the global economy hundreds of billions of dollars annually. What we can’t quantify is the impact on democratic institutions and democratic practice – something of such value that we can’t put a price tag on it. In this week’s South African election we can probably expect more people not to vote than those who cast their ballots for the leading party. They no longer trust politicians or the political process. Similarly, we have seen the politicians and corporations linked to corrupt arms deals in the 1990s and the most recent phase of state capture work hard at destroying the public institutions that hold them to account. This is a process of disembowelling democracy so that the rich and corrupt can continue feasting. Most importantly we have a strong active civil society, feisty journalism and rigour in most of our judicial processes. It shows that democracy pulses through the veins of South African politics, this challenges the elites who want to make deals that favour their interests.

What are the effects of state capture on the different parts of South Africa’s society? (i.e. black, white, poor, rich, men and women)

State Capture and corruption affect the lives of every South African in different ways. Consider the fact that an additional 2,8 million South Africans were defined as living in poverty between 2011 and 2015. This meant that the poverty headcount increased to 55.5% of the population. As the economy has creaked to halt South Africa has lost an opportunity to employ an additional 2.5 million people had the economy grown at rates similar to other emerging market economies. Instead money has been thrown at state owned enterprises that were looted by corrupt politicians and their private sector enablers in big banks, auditing firms, accountants and elsewhere. The people most affected are undoubtedly the most vulnerable in our society, working class women of colour. The streets have become less safe, it is harder to find work and basic public services are taking massive strain. However almost nobody is immune to the impact of state capture – from power outages to poor water supply there is no escaping the impact, even for the lower and middle classes. For the top 1% of South African society state capture is an inconvenience but not an impediment to prosperity. The latest phase of state capture is a mode of extraction that has been going on for decades. Far too many of these folks have one foot in Dubai and bank accounts in Luxembourg. Our society is unlikely to change through the actions at the top, but through the call for accountability from below.

In general, what are the most pressing issues in the coming 25 years in South Africa?

Our struggle in the next quarter century must be focused on social and environmental justice. Right now, we have no clear plan of how to deal with growing unemployment, poverty and inequality. The consequences of climate change are likely to make this situation far worse in the coming years, and disproportionately impact the poor and vulnerable. If we are serious about tackling these issues we need to ensure that the powerful corporations and politicians that often act with impunity and are disconnected from the lives of most people are held to account for their actions. If we can stem economic crime and the culture of impunity amongst our elites, it would help ensure that the issues of social and environmental justice are dealt with the care which they deserve. If we fail to do so, we will be a society in constant conflict over a dwindling pool of resources. The struggle to tackle these issue will define our society for decades to come.