Editorial: The Absa quandary is Zuma's to solve
The sporadic and phlegmatic attempts by the government to look into compensation for the gains of corporate South Africa during apartheid have thus far yielded nothing. More than one inquiry into the apartheid state’s bailout of Bankorp has resulted in reports that appear to have taken residence in obscure corners of the internet. The lack of consequence from these reports is testimony to the passive response from our own government to these matters.
It’s not about the money.
There is always a curious balance of forces in flux that determines how and when history is used to serve the politics of the present. Our fraught history is increasingly being called upon when the economy is sluggish, the rate of joblessness spikes and trust in the current political establishment is eroding. When the present has no answers to our problems, we must look to the past to understand how we got here.
Still, the protestations that demand that the judicial system, the media and, well, everyone else pay as much attention to apartheid-gotten gains as we do to Gutpa-gotten gains have been waved away as the shrill cries of an opportunistic few dawdling on the political fringe.
It is crucial, however, that there is at least an admission that the current successes of a good many individuals and businesses were guaranteed a long time ago by the apartheid state. Those gains have been allowed to multiply without any kind of mechanism, even if it is ritualistic, to make amends.
Roll the years forward and, in 2017, an interim report from the public protector’s office holds Absa liable to the tune of R2.25-billion for the apartheid-state’s bail out of Bankorp.
But it’s not just about money.
Then, as now, it is about how the state acts to serve the interests of the people it believes it represents. And, yes, of course it’s complicated.
A formal, well-documented inquiry, the Davis Panel, all the way back in 2002, found that the primary beneficiaries of a R1.125-billion government gift – because it was just that – to the old Bankorp had been Sanlam policyholders at the time. Although the public protector’s provisional report in effect holds Absa responsible for the benefit derived, it does not in any meaningful way explain why the public protector came to a different conclusion to the Davis panel.
Sanlam then is not Sanlam now. It was a mutual society, dealing on behalf of policyholders and pensioners. So, when you drill right down, the ultimate beneficiaries were a large number of almost exclusively white, largely middle-class South Africans.
This goes some way towards explaining the peculiar nature of the original Bankorp bail out: the apartheid government was working hard for the benefit of the only constituency it cared about – itself.
When the apartheid state was formally dissolved, the expectation was that robust policy would ensure that black South Africans would be adequately empowered to roll back the years of disadvantage. That has not happened.
We are negotiating a moment in our history when the frustration of historical disadvantage has become untenable to a generation of young South Africans who see little opportunity for betterment ahead.
The public protector’s findings and proposed remedial action, if they stay the same in her final report, into the state’s handling of Bankorp will challenge the government. Even if the public protector’s proposed remedial action to the state to demand these billions from Absa is both fair and legal – and it is contentious – it will not exactly be just either. If Absa ends up paying R2.25-billion to the state, some of it will indirectly come out of the pockets of government employees. Government employees of today, when the complexion of the civil service is very different from what it was in the 1990s.
The same is true elsewhere, though less starkly. The British holding company that now controls Absa may seem like a fine colonial cow to milk. But it paid fair value to South African shareholders at the time it bought those shares and is in return owned by institutions and pensioners spread around the world.
Rest assured, however, things are going to get very political – and very weird – very quickly after our report today.
A previous administration weighed up their options and decided it just wasn’t worth the trouble and the risk to go after Absa or Sanlam. But, more than the apartheid-gotten gains of big business, this interim report of the public protector presents a quandary to the government of Jacob Zuma: Should he set up yet another commission of inquiry? The remedial action, still provisional, leaves it in his hands to decide.
If the public protector’s report remains unchanged and the state does seek these funds from Absa, the net take of a successful claim will be reduced by legal fees and downstream reductions, such as the eventually reduced tax receipts from Absa and its shareholders. That moral calculus is difficult, but important, if we are to deal in justice. What exactly does R2.25-billion get us?
Buckle up – fierce politicking ahead.