SAFTU statement on Public Protector’s report on Absa/Bankcorp

20 June 2017

The South African Federation of Trade Unions notes the finding by the Public Protector, Busisiwe Mkhwebane, that Absa Bank and its predecessor Bankcorp “unduly benefitted” from an apartheid era government bail-out. 

She also found that the government and the South African Reserve Bank failed to uphold their constitutional duties by not acting on a recommendation that public funds for the bail-out should be recovered from Absa. 

The federation welcomes the fact that the Public Protector is investigating allegations against companies in the age of apartheid, but is concerned that this must not be an excuse to divert attention from the growing number of urgent allegations of corruption in the more recent period.

The finding is based on a report by Ciex, a company based in the UK specialising in covert recoveries which said that the conduct of the Reserve Bank and the government regarding the Absa bailout, between 1986 and 1995, which included a number of banks in the Bankcorp group receiving unlawful funds during the apartheid era, were inconsistent with various sections of the Constitution.

Her three main findings are:

- The government and the Reserve Bank “improperly failed to recover R3.2-billion from Absa as a result of an illegal gift” given to Absa between 1986 and 1995;

- The public was prejudiced by the conduct of the government and the Reserve Bank because of the failure to recover the “gift” despite spending £600 000 for services “which were used”; and

- The government “improperly failed” to implement the Ciex report after commissioning and paying for it.

The finance ministry is also found to have failed to comply with its legal obligation to ensure that the Reserve Bank complies with the South African Reserve Bank Act.

The Public Protector also recommends changing the South African constitutional clause dealing with the role of the Reserve Bank. It currently states that the Bank’s primary object “is to protect the value of the currency in the interest of balance and sustainable economic growth”. She proposes that this be changed to “is to promote balanced and sustainable economic growth… whilst ensuring that the socioeconomic well-being of the citizens are protected”.

While this would be an improvement, the solution surely has to be the nationalisation of the Reserve Bank, so that it becomes a public service rather than a profit-making company.

The Special Investigations Unit (SIU) will now have to investigate the Public Protector’s findings and if the law was broken those who are guilty must be charged and punished.

SAFTU warns however that these investigations must in no way be used as a way to deflect attention from the our modern-day looters, now exposed in recent allegations of corruption involving the President, government ministers, SOE executives, private companies and the Gupta family.

The federation has been among the most vocal in demanding that these crimes be urgently investigated and the offenders prosecuted and punished, but at the same time has always opposed the idea that corruption and ‘state capture’ are new problems. These are not new but just the most recent and flagrant examples of corruption in a capitalist system which has always been inherently corrupt. 

‘State capture’ is not a new phenomenon introduced by Zuma and the Guptas. On the contrary it is a process which goes back to Jan van Riebeeck, Cecil Rhodes, all the colonial war-lords and apartheid bank-rollers who made vast profits and looted the country’s natural resources at the expense of the African people, in particular the working class.

These colonial and apartheid oppressors captured the state and used it to impose the most brutal, racist and tyrannical measures to force the black majority into slavery and poverty. And their successors still dominate the economy and, indirectly the state today.

The Public Protector is therefore right to look into crimes dating from these period, but this in no way excuses or justifies today’s plundering of public resources by the crony capitalists led by Zuma and the Guptas. 

Their conduct is in some ways even worse that those of older periods given that is done in the name of the African National Congress, to which thousands gave their lives so that we could live in a free and democratic society.

These hyenas have aped the worst features colonial and apartheid capitalism. They even have the audacity to pretend that they are doing in as part of a fight against white monopoly capital. This flies in the face of the fact that this class has thrived under the ANC government. Not only have Zuma and his cronies sat back and done absolutely nothing in 23 years to weaken white monopoly capitalism they have strengthened it while adopting all its worst features in order to enrich themselves.

SAFTU therefore insists that while the Public Protector, and the Hawks and NPA, must continue to investigate apartheid era crimes, they must be consistent and move quickly to investigate all the allegations which are backed up by findings of Mkhwebane’s predecessor, Thuli Madonsela and the flood of email revelations, which clearly point to illegal activity and identify those responsible. 

All those implicated must all be charged, prosecuted and punished and the President and his whole cabinet removed from office without delay.

Issued by Patrick Craven, SAFTU Acting Spokesperson, 20 June 2017