a second look
Henry Spencer
Legality and morality are two concepts that many South Africans seem to have difficulty distinguishing between.
At a recent conference on corruption, hosted jointly by the South African NGO Coalition and Transparency SA, the question of the world’s socio-economic imbalances whereby 80% of the world’s wealth is owned by 20% of its population was debated. Delegates’ attention was drawn to the fact that much of this imbalance had been achieved through legal, albeit immoral, means.
The current MEC for Finance in Kwazulu-Natal, Peter Miller, said that in his view legality was objective, whereas morality was a subjective matter an ideological, philosophical concept. His tone indicated disregard for the latter.
But his assumption is untrue; quite the converse applies.
Legislation is often propagated by people who have vested interests in its implementation, and could consequently be considered subjective.
Morality on the other hand deals with objective principles such as duty, obligation and fairness, which should be universally desirable.
As a result, legality deals with what we can get away with, while morality involves what we should not try to get way with.
The contradictory application of the two principles is best illustrated in the following cases.
In August last year directors of a leading medical aid company were alleged to be amassing a sum of R23-million by selling off their recently acquired administration arm to Medscheme. They were extensively criticised in the press by the CEO of an NGO.
At a later stage he was threatened with being sued for libel. It was even suggested that, were this to happen, his NGO could suffer. He had said nothing untrue but both he and his NGO could ill afford the financial risk of continuing with attempts to expose an alleged social injustice.
There was nothing illegal in the proposed sale of the administration function. The deal was described by the chairperson of the medical aid as the only manner in which these directors could “accumulate” wealth.
But was it moral? The same medical aid pays its trustees a sum of R3 000 a meeting that they attend this, to trustees of a non-profit organisation.
Yet this too is perfectly legal, albeit morally questionable.
In the loan-shark industry there is the case of the (some would say incestuous) relationship between Cash Paymaster Services (CPS) and a company called Age Secure.
CPS has been awarded the contract to pay social pensions at a number of regions in our country, including Kwazulu-Natal. The company recently improved situations at pension pay points, but it is of paramount importance that its actions continue to be beyond reproach.
Recently a new sister-company, Age Secure, has emerged. This company, among other things, intends to assist the mostly elderly, black pensioners by refinancing their loans at a rate of 14% a month.
The managing director of Age Secure also happens to be the managing director of CPS.
A consultant, and previous director of the South African Council for the Aged, who was also on Minister of Social Development Zola Skweyiya’s advisory committee, has been contracted to advise Age Secure on how its infrastructure should be established. He is based in the company’s head office in Gauteng.
The consultant maintains that Age Secure’s sole intention is to assist the elderly. He implies its aim has little to do with getting a share of the interest paid to loan sharks by the more than 3,6-million potential clients. Does it?
Gabriel Davel, the CEO of the Micro Finance Regulatory Council (MFRC), whose main function is to clean up this industry, speaks of the dubious practices of predatory lending.
Some of these practices include:
Targeting vulnerable people.
Flipping refinancing the original loan.
Research into this R25-billion a year industry has revealed that a quarter of clients borrow from one loan shark to pay debts owed to another. It was also discovered that, because of the ravages of this tainted industry, the take-home pay of 7 000 state employees was less than R100 a month.
This burgeoning industry is not one of which we can be proud; the fact that it is even allowed besmirches our reputation as a civilised country. One would really have to wonder why it is not stopped?
The debt traps engineered by loan sharks represent a 21st-century equivalent of the slave trade, and should be considered equally abhorrent. Yet the actions of those involved in this matter are legal. But are they moral?
The CEO of Age Secure told a journalist that Age Secure and CPS all fall under a holding group known as Applitech, the company that established the technology behind the current smart-card and pay-out services in KwaZulu-Natal.
Interest of 14% a month, if not registered with the MFRC, would constitute usury. Inquiries to this council have revealed that there is no record of registrations under the three names mentioned.
The Usury Act specifically states that micro-lenders who do not register with the MFRC may not charge more than the maximum interest rate, under the Act, of 25% a year, yet Age Secure intends to do just that. This seems to be neither legal nor moral.
The MFRC goes on to say that if a company offers micro-loan contracts, which contain intermediaries, it is possible that such a contract is in contravention of the Usury Act.
These then are some examples of the moral dilemmas with which we as a nation are faced. The dilemma is the choice between what is legally permissible and what is morally acceptable.
The choice is between appropriateness and expediency. This often involves choosing between right and wrong, and until we learn to distinguish between these, until we demand moral rather than legal compliance; until we reintroduce into our language terms such as honour, duty and shame, we have little hope of successfully pursuing our quest for responsible nationhood.
Until such time as our people learn to once more embrace fully the concept of ubuntu, and the ideal of fairness and concern for others, we will have little hope for improvement, and an African renaissance will remain but a dream.
Henry Spencer is the director of the Association for the Aged
ENDS