Corruption: SA's Big Business must find its voice
- Mark Heywood
- 06 Aug 2015 12:50 (South Africa)
Last week a closed discussion was held between a group of intellectuals, academics and activists on the subject of racial equity in South Africa. Or, to put it more precisely, the discussion was about the social, economic and political factors that are driving growing racial inequality. I asked a question about the silence of South African big business on the great questions of inequality and grinding poverty. My question was raised in the context of agreement on the need to draw on all OF the countries’ resources to reverse inequality. A prominent person, sympathetic to business, replied: “Business is in the departure lounge at the airport.”
If some business is indeed in the departure lounge it is extremely short-sighted, sad, irresponsible, unconscionable and maybe even downright criminal. You can bet your bottom dollar that business will return because our platinum, agricultural resources, and most importantly our untapped consumer markets will not disappear with their disappearance.
As the departing businessmen and women drink their last gin and tonics many mutter darkly to themselves or in e-mails to their boards; they blame their own failures at the door of over-regulation of the labour market, policy uncertainty, growing corruption and the coming political instability. ‘Beware the march of the EFF’, they think – oblivious to the fact that the Economic Freedom Fighters is partly their Frankenstein’s monster.
Statistics show our country to be in a social crisis much more than an economic crisis. The statistics of misery are terrifying. Adult deaths due to HIV and tuberculosis – still in the region of 200,000 a year - lead to levels of mortality that make us akin to a country at war. Only a tiny trickle of young people exit our education system with a marketable qualification, the rest head for permanent unemployment. Three quarters (75%) of black female youth are unemployed.
I could fill a whole page with misery-numbers. But would it make any difference?
On the other hand, judged by profitability and evidence of conspicuous wealth we are not doing so badly.
Business speaks out freely on the economic semi-crisis. But why doesn’t it speak out on the socio-economic blight, its causes (including bad business) and consequences? Is there no heart or soul in those shiny new buildings that blossom evergreen off Sandton streets? Why are so many business people (for they are people after all) unable to show solidarity or empathy for the blights of inequality, widespread hunger and homelessness. Staged and riskless stunts such as the CEO sleep-out – however worthy in terms of earnings - will not do. It is not enough. It is a perplexing silence.
Ironically – although we do not wish to emulate the Chinese in their political habits – visionary thinking by business à la China might find the solution to sluggardly growth in addressing the social crisis, rather than ignoring and exacerbating it. But to start to do this, so-called big business has to rediscover a moral and constitutional compass. It has to start to take a stand.
Businesses have a stake in our country. They are important and crucial. Mice like me from civil society continually court the mouse-trap. But business has social and economic weight. It can be heard – not in its ‘own’ interest, but in the more inclusive public interest of which it should consider itself a part.
Admittedly, very occasionally business will poke its nose out from under the covers. Let us retrieve the words of the terrible heresy uttered by one Reuel Khoza, then chairman of Nedbank, in the 2012 Nedbank annual report: “Our political leadership's moral quotient is degenerating and we are fast losing the checks and balances that are necessary to prevent a recurrence of the past. We have a duty to build and develop this nation and to call to book the putative leaders who, due to sheer incapacity to deal with the complexity of 21st century governance and leadership, cannot lead,” he stated.
Sounds true enough to me. The fact that Gwede Mantashe responded like Tom the cat should not turn people like Khoza into heretics. It’s time to call time out the emperor with no clothes.
Yet, the next year First National Bank (FNB) backed down on its ‘You can Help’ advertisements , with Sizwe Nxasana humbling himself in the face of the African National Congress’s threat to stop banking with FNB.
Why is business so timid? Compared to the wounded roar of the likes of Blade Nzimande, business really has insights about the modern world and the power to contribute to change. But the failure of good business to speak out reinforces the belief that business is entirely self-interested. And that’s not good for good business.
So, what could or should good business do? Predictably some will respond to this question by arguing that business is doing more than enough already. Corporate Social Investment (CSI), they will say, adds up to more than R6-billion (approximately $600m) a year. Before you wipe the sweat from your brow consider that that is less than 5% of the $15.8-billion (R205bn at current exchange rates) made in profits by our biggest 13 companies.
Let it be said loudly, scraps from the table does not social change make.
CSI is worthy and innovative at times but it is also timid, and it admits to being so. Very little CSI goes towards agents of change in our country, or to social movements like the Treatment Action Campaign that seek to reinforce rights (Where in the world would a movement that has played a large part in saving 3-million lives face going out of business? Our world of course). I said as much recently when I found myself on the same stage as a representative from the Vodacom Foundation, at an event hosted by the Discovery Foundation at Constitution Hill. After a wonderful, glossy presentation full of children and adults in Vodacom T-shirts glowing with their own goodness (and there’s no question that CSI does improve lives for a few days or builds schools, clinics and the likes), I asked why some of their largesse did not go towards organisations seeking systemic change rather than Christmas decorations. The answer was straightforward. We need the government to licence us. Touché.
The Constitution creates rights and duties for both natural and juristic persons, so there is no question that business has a stake in our society.
So, in the famous words of Lenin, albeit in a very different context: What is to be done?
In the face of growing social strife and deepening inequality it is time business leaders began to speak, act and plan differently. Don’t praise the nobility of Nelson Mandela and violate his vision. The Constitution creates rules for business as much as it does for government. It requires that business not act in a way that harms the environment, exacerbates food insecurity, denies people access to essential health services.
Good business would stigmatise its own trespassers. It would speak out against Lonmin’s culpability in the Marikana massacre and denounce the living conditions it tolerates for its employees.
Good business would name and shame corrupt business; according to a survey by PwC eight out of 10 managers commit economic crime in SA. Read that again. Eight out of 10.
Good business, understanding the proven link between good health and economic productivity, would condemn alcohol or cigarette companies that target their deadly wares at the young; it would take a position on profiteering from health and medicine by some private hospitals and pharmaceutical companies; it would blow the whistle on tax evasion and illicit capital transfers.
Finally, good business would admit that if the purpose of an economy is to serve the well being of all its people, then the South African economy is failing. But wise business might also see how an economic growth plan, centred on fulfilling the Constitutional duties of the government, particularly investing in quality healthcare and basic education, could create decent jobs, local spending power, a bigger domestic market and a more skilled and productive workforce.
Good business would use its position of power to stand up for the greater good. This is a legal duty not a political choice. Our economic policy – and the kowtowing of business – is unconstitutional because it is deepening inequality. One hears of an activist judiciary, activist philanthropy, activist academia. But where is activist business? Does it fall to the Young Turks to imagine a different business model?
So where to start? A commitment to immediately eliminating all corruption would return R1-trillion to our fiscus which – invested properly – will also kick-start growth.
So, big business, the question you should ask yourself is: will you start by joining the marches against corruption? Go on, sign up. DM