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Stop sleeping, wake up and act against corruption

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Lord Peter Hain is a former British Cabinet Minister and anti-apartheid campaigner whose memoir, ‘A Pretoria Boy: South Africa’s ‘Public Enemy Number One’, is published by Jonathan Ball.

Blame for the infamous ‘Zupta' State Capture decade has mainly focused upon a corrupt president and his cronies. But South African and global businesses were culpable too. It took, and it still takes, two to tango.

This is a text of a lecture at the University of Cape Town on Saturday, 11 March 2023

SARS wouldn’t have been disabled without Bain & Co infamously and unlawfully carrying out president Zuma’s personal instructions at 17 one-to-one meetings.

Nor could the Guptas have money laundered billions out of the country without global banks like HSBC, Standard Chartered and Baroda enabling them to do so.

And that sorry story continues to this day with ministers and local councillors still wanting backhanders to dispense contracts or grant licences to companies eager for the work and willing to pay.

It is high time the business community owned up and ostracised anybody still playing this game. Because if that happened, corrupt politicians and officials would have their looting massively curbed.

No excuses

That’s why I hope that the whole SA business community will take a lead. Exasperation with the President’s lack of decisiveness, or under-resourced and previously disabled prosecutors, frustration with useless or corrupted policing – all these things are no excuse for business failing to step up.

They will not help build a successful economy, kick start growth or attract foreign investment until they do so.

Every business should say: “Never Again” to collaboration with the corrupters.

Implementation of the Zondo Commission’s 2022 report is the task not only of the President and his Cabinet, of Parliament and law enforcement agencies, but also South Africa’s business community.

Zondo’s recommendations were many and varied, principally:

  1. An Independent Public Procurement Anti-Corruption Agency;
  2. A permanent Anti-State Capture and Corruption Commission;
  3. Improved and extended whistle-blower protection;
  4. Enhanced and improved parliamentary oversight;
  5. Amendments to the electoral system.
  6. An end to “cadre deployment”.

Significantly, the reforms proposed are institutionalised and managed outside executive government and are independent of it: they would establish a constitutionally based, countervailing force against state corruption at all levels. But whether these reforms will be fully implemented remains to be seen.

Meanwhile, crime and corruption continue unabated, albeit in different forms to the infamous Zuma/Gupta decade.

Examples of South Africa degenerating into a ‘Mafia State’ include: illegal mining; sabotage at, among others, Eskom and Transnet; continued assassinations; organised criminal activity in the public and private sectors; extensive procurement corruption, including at ministerial level; organised disruption in the transport industry; insurrectionary outbreaks and threats; attacks on the Constitution and independent journalists by leading politicians in the ANC and EFF.

While the government of the day and state institutions bear primary responsibility for the restoration of a corruption-free and functioning state, it is not only up to them.

Private sector involvement

The committed and energetic involvement of the private sector is essential – both to acknowledge its complicity in State Capture and to prevent any recurrences or new outbreaks.

The private sector, including the professions, played an important, material role in State Capture in many diverse ways.

Professional actors, including firms of auditors, lawyers and management consultants, assisted and enabled State Capture.

Business, both local and international, bribed directly, paid “facilitation fees” in vast amounts and were otherwise involved in corrupt procurement.

Whistle-blowers were not encouraged or protected, indeed hounded or killed.

Cooperation with law enforcement agencies was largely absent.

Banks failed abysmally in their duty to prevent, detect and report financial irregularities and suspected financial crime, including money laundering on a vast scale that saw billions of looted rands flow through their digital pipelines to their international branches, especially in Dubai, Hong Kong and London.

It is no exaggeration to say that South Africa, including the private sector, even where it was not directly involved in State Capture, slept through those years – and in some cases is still doing so.

Programme of measures

But more than passive obedience to the law is now required of the private sector if the continuing decline of the South African state and the very fabric of society is to be reversed. A positive programme of measures is necessary.

These should include, first, a universal and uncompromising refusal to pay backhanders for public procurement contracts: if every tendering business refuses, politicians and state officials will also have to behave ethically.

Second, education within businesses and related institutions as to what constitutes corruption, how to identify corruption and what steps to take if it is encountered.

Third, dedicated executives or divisions within entities to ensure lawful and ethical compliance in all dealings.

Fourth, encouragement and protection of whistle-blowers such as Cape Town’s own Athol Williams, a former Bain & Co global partner who has been outrageously treated.

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Fifth, an active alertness to new patterns of crime and corruption and cooperation with investigation and law enforcement agencies.

Sixth, an end to silence where the state is failing or threatening to fail, including calling state functionaries to account.

Seventh, a refusal by consultants or legal firms to sanctify wrongdoing in state-owned enterprises or government with “whitewashing” reports.

Eighth, relentless action by professional bodies to ensure lawful and ethical practice.

Ninth, the necessity for Business Leadership SA, Business Unity SA, the JSE, SA Institute of Chartered Accounts, other business institutes, educational bodies, chambers, relevant business and trade bodies, to be proactive in ensuring red lines that must not be crossed; providing training courses; endorsing corruption prosecutions; and issuing a code to protect anti-corruption whistle-blowers.

Business reputation restored

It is also important that privately owned companies which are not service providers, nor State Owned Enterprises, also owning this agenda to ensure that South Africa’s business reputation, which was consistently ranked in the world’s top five, is restored.

All this is essential to re-establish international investor confidence that was high under the Mandela and Mbeki regimes.

Foreign Direct Investment is so vital to the country’s future economic success, growth and prosperity, as well as to eradicating poverty and unemployment, yet it is currently way below the minimum level required for economic recovery.

In short, there must be a universally adopted strategy to restore legal and ethical practice in the South African economy, with the business sector providing the kind of strong lead it has palpably failed to do.

Peace, stability, the rule of law, is the foundation of prosperity for all. But it does not come cheap.

South Africa will not emerge from its past and current morass of corruption, dysfunctional public services, cronyism, crime, poverty, low to negative economic growth and unemployment, unless each and every one stands up to be counted and demands: “Never Again”, and insists that the country is set back on a path towards a society of equal opportunity for all, with business, politicians, and all civil society institutions mobilising together in support of a programme of empowerment, transformation, development and integrity in accordance with the Constitution and the rule of law.

Rightly a pariah under apartheid, South Africa is now cold-shouldered because of State Capture. I urge you all to cooperate and fight to make South Africa once again a shining light to the world as it once was under Nelson Mandela. DM

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  • Geoff Krige says:

    A very helpful challenge! But it needs to be Geard way beyond South Africa. A reality not even mentioned is the massive damage done in the past and still being done to South African industry is huge contracts going off-shore exactly because South African industries have refused back-handers.

    • virginia crawford says:

      A very good point- losing business because of refusing backhanders. Perhaps Lord Hain could do two things: focus on the British tax havens where so much loot is hidden, and make sure the billions promised at COP last year are held back until everyone in the Zondo Report has been prosecuted.

  • Robert Pegg says:

    The gravy train will never stop while politicians are riding it. It’s actually worse in some countries, believe or not.
    Peter Hain can chirp all he likes from the UK, but it happens there as well. An example is backhanders to Arab countries, sanctioned by the government, to ensure weapons contracts. Half of London is owned by Arabs who have benefitted from contracts with UK companies.

  • Carsten Rasch says:

    Not much hope for most of the recommendations to happen, as urgent as they are. This country suffers from an addiction to power and money, and, like any addict, the first step is to admit your affliction. The ANC government hasn’t even done that, apart from one or two platitudes emanating from the smug lips of King Cyril the Boneless. In addition, those in power suffer from another condition – a need to be recognised. This need has reached pathological levels, and prevents any admission of failure from the ANC and their cadres.

    • Big Bronco says:

      Lord Hain, you are partially responsible for this mess with your campaign against the white government and getting it removed from power. You did this while you knew what was happening under black rule in other African countries. They were dismally failing all around you. But you were naive. You had this misconception that South Africa would be different and you campaigned your heart out to put the African in power. Now that you know your plan has failed, I do not see you campaign to remove the cancerous ANC government as whole heartedly as you did to remove the white man. YOU sit in your ivory tower, thousands of miles away from the mess YOU helped create. Get up off your butt and come and stand beside the people of SA and fight this corrupt useless government that YOU helped into power!! Start campaigning to remove them. Do NOT shout from your ivory roof top and tell us what we already know. FOR HEAVEN’S SAKE DO SOMETHING POSITIVE TO REMEDY THIS MESS.

  • Jane Crankshaw says:

    But Mr Hain, isn’t this chaos exactly what you fought for in the 60’s?
    It is the racist BEE policies and RET encouraged by people like you that has been our economic downfall! One man one vote has turned out to be the enemy here – taxpayers who are keeping the country afloat should have a much bigger say in how and where their money goes…only then can this collapse be contained and the country rebuilt in the way Mandela envisaged.

    • David Forbes says:

      Jane, that is a ridiculous comment. You are punting the old Progressive line of “qualified franchise”. Peter Hain never supported BEE or the RET, he supported one person one vote, and equality for all. If you think you are above our black brothers and sisters, then you don’t actually belong in this country. There are millions of black people who are completely honest, taxpaying and highly intelligent people. Your comment insults them. It insults Mandela, Sisulu, Kathrada, Hani, Goniwe, Calata and all the others who GAVE THEIR LIVES to end the racist apartheid system. One-man-one-vote is not the enemy here, it is the “whiteness” of people like you.

      • Michael Forsyth says:

        Well said.

        • Roslyn Cassidy says:

          I long ago stopped reading Ms Crankshaw’s posts (and many others on this platform). The entitled, smug, conservative rhetoric of people who seem to understand nothing of their privilege in South Africa or in the world belong in the comments section of the Citizen or the Daily Telegraph (UK). Yours, David, was a breath of fresh air.

      • Clyde Smith says:

        Thanks David, for articulating this excellent response.

    • Anne De Wet says:

      So well put! Peter Hain was part of the engineered downfall of the illegal regime which had at least built an infrastructure albeit sidelining the majority in a criminal manner which has resulted in many if the problems of today. The assets have been disposed of and the income from these disposals has provided the bread for corruption. However, the tax paid by 5% of the population is still been eaten by the politicians who have run this country into the dwang!!!

  • Dennis Bailey says:

    Hear you, Peter. Show me a leader that is beyond reproach, and we might have a smidgen of a chance of returning to some semblance of the Mandela era. As things stand, we are stymied by the politicians in parli who make art of pissing on the very statue of our beloved Architect of democracy by their naked criminality at every turn. And nonetheless, the naive, poverty-stricken, misled majority will still scream: Viva, ANC, Viva – without realising they’re peeing on their feet and sitting in their own defecations.

  • Craig King says:

    Of corse getting whacked for one’s troubles is also a possible outcome in South Africa. Peter needs to go after those British companies who actively drive corruption here too, it’s much less risky and more effective there.

  • Chris Marshall says:

    If you are an accountant, auditor, business consultant, lawyer or other such “professional” person, you have no way of justifying your existence except if you willing and able to reduce risk to others. You do not create wealth, but have a duty to preserve it, otherwise you are merely a parasite in the society that you claim to serve.

  • Stephen Paul says:

    Knowing full well the implications when the ANC invited me and my business to join the “party”, I had one response – EFF off.

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