Daimler’s economic threat

German multinational Daimler has written to the South African government demanding that it clarify the “confusion and uncertainty” about its position on the reparations suit brought by apartheid victims against multinational companies in the United States, and warning that the issue may affect future investments.

The letter, sent by Daimler chief executive Hansgeorg Niefer to Justice Minister Jeff Radebe and Trade and Industry Minister Rob Davies, reads: “As you are aware, Daimler is — considering its options regarding the future production locations for its best-selling C-Class cars.

“As you can imagine, we are searching for a mutually beneficial environment that offers — among other things — reasonable predictability, stability and certainty.

“South Africa is one location being considered.”

However, Niefer adds that “the confusion and uncertainty about the South African government’s actual position regarding the New York apartheid lawsuit are causing pause and uncertainty within Daimler”.


He complains that “the pending litigation incorrectly portrays the conduct of Mercedes-Benz and our parent company, Daimler AG”.

Radebe’s reply, which the Mail & Guardian has also seen, underscores the government’s ambivalence about the case. He acknowledges Daimler’s role in post-apartheid South Africa and the fact that the company participated in South Africa’s Truth and Reconciliation Commission (TRC) process.

Two South African victim groups are suing Daimler — which controls Mercedes-Benz South Africa — IBM, Rheinmetal, Ford and GM in the New York District Court for “aiding and abetting” the apartheid regime in suppressing South Africa’s black majority, and asking for compensation.

They are using the US Alien Tort Claims Act, which allows non-US citizens to sue for human rights infringements in the US courts for acts committed outside the country. The action has been ongoing since 2003.

The government of former president Thabo Mbeki opposed the class action, arguing that the matter should be resolved in South Africa.

The main source of confusion about the government’s stance is an “unsolicited” letter Radebe wrote to the New York court last September, after presiding judge Shira Scheindlin partially ruled in favour of the victims.

The letter reiterates the Mbeki position that South Africa’s truth commission has already dealt with the role of business under apartheid and that the government had acted on the TRC’s recommendations “in a manner it considered appropriate”.

The letter also claims that the plaintiffs have separately assured the government that they want to settle the dispute out of court.

The plaintiffs’ lawyers deny this, saying they want the case to set a precedent.

However, Radebe also told the court that the South African government was of the view that the US court was the appropriate forum to hear the case, immediately triggering a flurry of press reports that the Zuma administration had changed its position in favour of the victims.

This week, when the US Court of Appeals for the Second Circuit heard Daimler’s appeal against parts of Scheindlin’s ruling, Radebe declined to make further submissions.

In a submission to the court, counsel for the South African government, David Goldstein, said: “The Republic of South Africa has not determined whether it intends to make further submission to this court in this matter.

“In the event that the Republic of South Africa does determine to make a further submission to this court, it shall provide that submission to this court.”

The only weighty legal submission by a government was from the US administration, which argued that the companies’ appeal should be dismissed because the court has no jurisdiction to hear it.

An attorney for the Ntsebeza group of victims, John Ngcebetsha, said this week that the plaintiffs regarded Radebe’s September letter to the New York court as a true statement of the government’s position.

Kader Asmal joins fight to hear case in SA
ANC veteran Kader Asmal has thrown his weight behind the corporations facing an apartheid reparations case in the United States because he believes South Africa has the right, as a sovereign state, to hear cases concerning its citizens.

Asmal has entered the case as an amicus curiae (friend of the court) not on his own, but as one of a group of law professors from around the world.

Interviewed this week, he said: “Seriously, it’s about South Africa. I hate multinationals. It’s about defending the previous government’s decision to hear the case in South Africa.”

Asmal is one of 14 legal academics who made a legal submission last December in the long-running, tortuous case which originally pitted a group of South Africans against 50 multinationals accused of “aiding and abetting” the apartheid government.

In 2004, Judge John Sprizzo found that the South African plaintiffs could not sue multinationals under the Aliens Tort Statute and dismissed the class action lawsuit the following year.

The victims successfully appealed, prompting a further appeal by the corporations to the US Supreme Court, which referred it back to the lower court.

The New York District Court last year whittled down the number of respondents to four after a protracted legal battle.

In a judgment in December, Judge Shira Scheindlin partly agreed with the victims and was ready to proceed when the remaining multinationals again appealed against parts of her ruling.

Asmal’s submission was requested by a three-person full bench of the US federal appeal court in the state of New York on the novel question of whether international customary law makes it possible for companies to be held liable for human right violations.

The group of law professors argued in their submission that the Aliens Tort Act does not extend liability.

“There is no customary law extending corporate liability because many nations believe that human rights violations result from conscious moral choice, something that cannot be attributed to a corporate entity,” says the submission.

However, another group of eminent legal academics, including human rights lawyer John Dugard, filed an opposing submission arguing that companies can be held liable for human rights abuses.

“Customary international laws all recognise corporate criminal responsibility in principle, albeit that the precise scope and manner of implementation of corporate criminal liability may vary from one jurisdiction to the next,” argued Dugard.

The court has reserved judgment.

Subscribe to the M&G

These are unprecedented times, and the role of media to tell and record the story of South Africa as it develops is more important than ever.

The Mail & Guardian is a proud news publisher with roots stretching back 35 years, and we’ve survived right from day one thanks to the support of readers who value fiercely independent journalism that is beholden to no-one. To help us continue for another 35 future years with the same proud values, please consider taking out a subscription.

Related stories

South Africa prioritises fossil fuels over clean energy in post-Covid-19 recovery packages

The country is among the G20 countries who have invested in electricity produced from coal, oil and gas at the cost of addressing climate change

Challenges and opportunities for telemedicine in Africa

Telemedicine in Africa is currently limited by the availability of basic infrastructure, but, considering the lack of doctors in rural areas, it is a vital component in addressing the continent’s healthcare needs

Fight the disease of corruption in the same way we fight the coronavirus

Gogo Dlamini, Themba Dlamini’s mother, died of Covid-19, but Mzanzi has a chance to rid the country of fraud and exploitation and instead serve ‘Gogo Dlamini’, the people of South Africa

This time it’s different: African economies may not survive

Amid the headwinds created by the Covid-19 pandemic, it’s time the Aloe ferox, which survives in dry, harsh conditions, is nurtured — but the options are limited

The SADC will regret its approach to Mozambique’s insurgence

The SADC has been lackadaisical in its response to the insurgency in Mozambique and in so doing, is putting several other southern African countries at risk

EXCLUSIVE: OR Tambo’s forgotten speech at Chatham House

‘The choice we are faced with is to submit or fight’
Advertising

Western Cape warned not to be complacent about flat-lining Covid-19...

The Western Cape, which once had the highest number of Covid-19 cases in South Africa, is seeing a steady decline in active cases

Sisulu axes another water board

Umgeni Water’s board in KwaZulu-Natal was appointed irregularly by her predecessor, the water and sanitation minister claims
Advertising

press releases

Loading latest Press Releases…

The best local and international journalism

handpicked and in your inbox every weekday