Africa

Truth and Reconciliation Commission report excerpt

South Africa’s Truth and Reconciliation Commission (TRC) yesterday accused the country’s business sector of helping to sustain apartheid and called for financial contributions from business to make up for past injustices.

The TRC, which described the gap between rich and poor in South Africa as “politically dangerous and economically unsound”, recommended the implementation of a wealth tax, a one-off levy on corporate and private income and a retrospective surcharge on corporate profits. It also suggested the creation of a “business reconciliation fund”, to be administered by business, to help entrepreneurs who were victims of apartheid.

The TRC’s suggestions received a mixed reaction from business. Some recommendations were regarded as detrimental to economic growth and wealth creation. But others, such as the proposed one-off donation from companies and the creation of a special fund, received a more sympathetic response, as they are already being implemented in principle.

The TRC suggested each company listed on the Johannesburg Stock Exchange make a one-off donation of 1 per cent of its market capitalisation. One per cent of the stock exchange’s entire market capitalisation would amount to around R10bn (Pounds 1bn).

The TRC said the new government’s responsibility for the repayment of the previous government’s “odious debt” should be reconsidered. It also recommended that the banking industry develop a subsidised loan scheme for the development of small business and labour intensive industries.

Nevertheless, business people baulked at suggestions that they should be responsible for reparations to victims of apartheid. They were willing to support reconstruction, as long as their financial involvement was not portrayed as payment for past injustices.

Theuns Eloff, chief executive of the National Business Initiative (NBI), an umbrella organisation for businesses to co-ordinate social spending, said South African business supported reconciliation, but believed it was not feasible to add to its already high tax burden. In discussions with the government, the NBI had been assured that there would be no extra taxes to fund reparations.

Mr Eloff said business had already announced its support for the creation of a R1bn trust, funded from one-off donations, to fund job creation over five years.

“We do not see the trust as a reparation fund. Its emphasis is on the future and on the business community’s commitment to South Africa,” he said.

The TRC said certain businesses, especially the mining industry, had been involved in helping to design and implement apartheid policies. “Most businesses benefited from operating in a racially structured context.”

The TRC said the business sector had failed, in the hearings before the commission, to take responsibility for involvement in state security initiatives under apartheid. Certain businesses had colluded with the state in clamping down on trade unions, which had often led to “gross violations of human rights”.

The TRC’s call for action from business comes just as the economy is slipping into a recession which is likely to limit companies’ room for manoeuvre in tackling the economic divide between rich and poor. Growth this year is widely estimated at less than 0.5 per cent, and is expected to be at a similar level next year.

Companies’ ability and willingness to take action on the wealth gap will come under the spotlight today at a jobs summit, a meeting of business, labour and government to hammer out strategies to deal with South Africa’s jobless crisis. Total unemployment stands at 23 per cent or 2.24m people, according to most estimates.

Mar 1960: Sharpeville massacre. Dec 1961: ANC launches guerrilla war. 1963-1964: Rivonia trial – Mandela sentenced to life in prison. Jun 1976: Soweto riots erupt. Sep 1977: Biko killed in detention. Sep 1978: P.W. Botha becomes prime minister. May 1983: Eugene de Kock, notorious killer, joins counter-insurgency unit at Vlakplaas near Pretoria. Aug 1983: UDF, anti-apartheid group, launched by ANC sympathisers. Sep 1985: partial state of emergency declared following hundreds of deaths in township violence. June 1986: nationwide state of emergency. July 1986: pass laws restricting movement of black South Africans repealed. Aug 1988: HQ of South African Council of Churches hit in bomb attack by state agents. Jul 1989: P.W. Botha and Mandela meet in Cape Town. Sep 1989: F.W. de Klerk becomes president, replacing Botha. Feb 1990: ANC, SACP and other organisations unbanned; Mandela freed. May 1990: formal talks begin between ANC and government. Aug 1990: ANC announces ceasefire. Dec 1991: formal multi-party talks begin. Sep 1992: Bisho massacre. Oct 1992: De Klerk apologises for apartheid. Apr 1993: Chris Hani assassinated. Nov 1993: interim constitution agreed. Apr 1994: ANC wins first democratic election. Jul 1995: Act of parliament to establish TRC passed. Nov 1995: Tutu appointed TRC chairman. Apr 1996: TRC’s first public hearing in East London. Oct 1998: TRC prepares final report; ANC, F.W. de Klerk and others object about references to them. Amnesty hearings continue.

Financial Times, October 30, 1998

Categories: Africa, Odious Debts, South Africa

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