For a long time we have argued that corruption and cronyism threaten to gradually undermine not just democratic institutions, but the functioning of the economy.
That threat is no longer distant, neither is the impact gradual. In the mining sector, still one of South Africa’s biggest export earners and a key employer, the damage is being done right now to the productive base of the economy and to the livelihoods of vulnerable people.
Two weeks ago we reported on the M&G Omline how the then personal assistant to the treasurer general of the ANC, and other party insiders, had won prospecting rights to the lucrative and hotly disputed Sishen South iron ore mine under suspicious circumstances. Those rights are at the centre of the dispute between mining heavyweight Kumba Iron Ore and the steel giant ArcelorMittal that threatens an industrial deal between the two. However problematic that deal is, it is crucial to South Africa’s industrial sector.
This week the Mail & Guardian reports in detail on the collapse of the Aurora gold mine, formerly among the holdings of the Pamodzi group. President Jacob Zuma’s nephew and his lawyer as well as Nelson Mandela’s grandson, prominent on the board, and serious questions hanging over the conduct of liquidator Enver Motala, it seems the mine is being stripped of assets and allowed to die. Jobs are already being lost, floodwater is rising and there is no sign of the proceeds of some R81-million in gold that has been mined since this merry band took over.
Meanwhile, in the glorious bushveld surrounding the world heritage site at Mapungubwe, governing party heavyweight Alfred Nevhutanda is sowing dissent and anger among local communities as he lobbies to get coal mining under way. This is an area that should never be mined. There is plenty of coal elsewhere, for starters, but this is a region that not only has rich tourism potential but also has powerful and important things to tell us about who we are as a country.
The transformation of ownership patterns in the mining sector is an important economic policy objective for South Africa, but its use as an instrument for crony enrichment is now doing real and potentially irreversible damage to equally important — indeed, more important — objectives. Job creation and industrial development are chief among these.
There is nothing that the ANC-linked Imperial Crown Trading can add to mining operations at Sishen South other than the ability to extract rents. The rest of the economy, from washing machine manufacturers to vehicle plants and engineering firms, will have to pay those rents.
At Aurora, the impact is more immediate — and more crude. Vulnerable people are being thrown out of work, and a productive asset is spiralling into decline while the Zuma and Mandela names are used as cover for predatory capital.
And in Mapungubwe a heritage jewel is under threat while impoverished communities are deployed as pawns by the politician-miners.
There have long been anxious whispers about the degree of discretion granted to the minister in the awarding of new-order mining rights and about the handling of the public consultation and environmental processes surrounding new mines. Those whispers must now become urgent shouts. Crucially, the big players must stop hiding behind court processes and secret settlements that buy them temporary peace. The stakes are too high and the damage too advanced.
More incredible Mr Simelane
He is at it again. Our manifestly unsuitable national director of public prosecutions has been using all the instruments at his disposal for years to frustrate investigators trawling through the muck of the arms deal. He has been particularly diligent in fending off requests for assistance from local and foreign agencies working on alleged bribes involving the German frigate consortium and BAE systems, the supplier of fighter jets and trainers.
Of all those who hoovered up cash in return for access to decision-makers on the arms contracts, no one was as flagrant as Fana Hlongwane, the adviser to then-defence minister Joe Modise, who was turned into a playboy millionaire by BAE payouts.
Menzi Simelane’s decision to prevent Liechtenstein authorities from maintaining a freeze on some of Hlongwane’s ill-gotten loot not only defied our strongest remaining corruption-busting unit, the Assets Forfeiture Unit (AFU), it defied law and logic too.
Simelane insists there is no evidence of criminal conduct by Hlongwane. In fact there is plenty — on a balance of probabilities the money represents the proceeds of an illegal scheme run by BAE. Hlongwane may have had valid contracts with the company but he has been unable to explain, even to the AFU, what he did to justify his multimillion-rand payouts. In the United States BAE pleaded guilty to criminal charges involving the kind of “commission” structures from which he benefited.
The reason Simelane can demonstrate no convincing legal basis for his intervention is clear. There is none. This was the crudest and most craven kind of political interference. Never mind the typo-ridden CV, or the prevarications at the Ginwala Commission, here is hard evidence that he has no respect for the law and cannot continue as South Africa’s prosecutions chief. He should step down in shame, but, since he won’t, President Jacob Zuma must fire him.