The recent Truth and Reconciliation Commission (TRC) proposal that business should pay reparations for profiting from apartheid must have left the sector wondering whether it will ever be allowed simply to get on with doing what it thinks it is supposed to do: make money for its shareholders.
South African corporate taxes are complex and democracy has entailed special costs on business. These include employment equity, skills development, HIV/Aids education and treatment, black economic empowerment and, coming soon, mineral royalties in the mining industry. Now, along come apartheid reparations. Whoever said that ”the business of business is business” clearly didn’t have South Africa in mind.
Of course, apartheid reparations are not a new thing. They have been on the cards since the TRC announced, early on in its investigations, that it would be looking into the role of business under apartheid. But perhaps business did not expect the TRC to go so far as to accuse certain mining companies of having provided the blueprint for ”grand apartheid”. This has led Anglo American’s executive director, Michael Spicer, to accuse the TRC of adopting ”a one-eyed monochromatic vision of the past that does not get to grips with the complexity of the issue”.
While Spicer may have a point in accusing the TRC of glossing over some of the ”complexities” in the relationship between apartheid and business, he surely would not dispute the main thrust of the TRC’s argument. This is that South Africa’s modern economy was built historically on the denial of basic human rights to millions of black South Africans, which made them vulnerable to gross exploitation by white farmers, mine owners and business people in general over the better part of a century (and longer in the case of farming).
The hovels that were home to millions of farm workers, the single-sex compounds on the mines and in the towns, the migrant labour system, the appalling wages paid to generations of black workers, the pass system that denied black people freedom of movement, the undermining of black trade unions — all these institutions and practices were in place long before the National Party came to power in 1948 and began perfecting apartheid. And virtually all sections of business in South Africa profited out of these perverse practices.
Certainly it may be argued that by the 1970s and 1980s many sectors of industry began kicking against the rigid restrictions that apartheid imposed on their use of labour, since they now sought a more mobile and highly skilled labour force than apartheid could deliver.
But the hard-fought struggles of black workers for trade union rights during this period bear testimony to the fact that, despite their complaints against certain of apartheid’s restrictions, the vast majority of businesses did not easily concede the privileges and powers that apartheid had showered upon them.
Whether certain business people felt uncomfortable operating under the apartheid regime is not the issue here. Nor is it the issue that some individual businesses did try to alleviate the harsh conditions that apartheid imposed on their black employees. The issue is simply that South African business as a whole grew under apartheid and, in many important ways, benefited from it. This is why the TRC’s case for reparations is so strong, despite the fact that it may not touch on all the ”complexities” of South Africa’s past.
However, Spicer has also made another point, which is that a debate around reparations ”must necessarily take place in South Africa by South Africans through their democratic institutions” so that we can all move forward together. I believe that this has to be the first prize for all stakeholders and therefore welcome the meeting that was held last Friday between the government, business and members of civil society to discuss reparations.
Various forms of reparations have been suggested. The TRC itself recommended a once-off wealth tax or a once-off levy on corporate or private income, but the government does not seem too keen on this idea because it will create ”general anxiety” among sectors of South African society. The former TRC chairperson, Archbishop Desmond Tutu, and the current Archbishop of Cape Town, Njongonkulu Ndungane, have suggested that business sets up a voluntary Marshall Plan-type of fund for reconstruction in South Africa. Spicer draws attention to the Business Trust that was voluntarily set up by business with funding of about R900-million, but the TRC says R900-million is not nearly enough.
I can’t help feeling that this debate is a little sterile and that perhaps it is missing the point. The real point must surely be first to establish precisely what it is that we as South Africans want to do with the money that business pays in reparations. Once that has been agreed, we can decide what resources we already have available to achieve these objectives, and we can look at how much we still need and what contribution business might make to filling this gap.
But to start by debating how much reparations business should pay before we know precisely what we want to do with it seems to me to be putting the cart before the horse.
With this in mind, it is worth noting that the government currently does not seem to be that short of money to spend on reconstruction and development.
For instance, the Reconstruction and Development Programme Fund still has R923-million available in unspent funds. Also, the South African Revenue Service collected R1,5-billion more than was budgeted for in the last fiscal year. Taken together, almost R2,5-billion is available that could be channelled into reconstruction and development.
In addition, the government has already committed South Africa to spending between R30-billion and R60-billion (depending on who you speak to) on the arms deal. If reconstruction and development is really such a priority for the government, perhaps we should cancel a few of these contracts and put that money to good use in uplifting the poor.
My point is really that since the government does not seem to be that short of money for reconstruction and development purposes, should we not be talking rather about precisely what we want to use business reparations money for before we antagonise investors even further by demanding they part with yet another large share of their money?
Once we know what we want to achieve, the next step would be to put in place a procedure for getting there. In this regard, two criteria would seem to be key. The first is to keep it simple. The more complex the procedure, the more it will require a huge bureaucracy to administer it. This will inevitably involve a substantial portion of the reparation funds being siphoned off to finance the bureaucracy and increase the chances of it being plundered.
Secondly, we need to make it a win-win situation for all the key stakeholders in South Africa, from the previously disadvantaged poor to business and the government. By finding a simple mechanism to ensure that the poor can benefit easily from them, funds derived from reparations could play an important role in stimulating domestic demand and promoting economic growth.
In the final analysis, a solution that benefits all stakeholders will be that much more acceptable to all the parties involved.
Dr Duncan Innes is CEO of The Innes Labour Brief and lectures part-time at the Wits Business School