Special Hearings — Business Hearings — 1997-11-12

MR KESANI: Mr Chairman, thank you very much firstly for allowing us to present our submission today.  I also want to start off by complimenting you on the choice of venue.  This marvellous (indistinct) at one stage refused entry to people of colour and as time went on they then allowed people of colour to come here for only for the people of colour to realise then they couldn't afford their rates.
 Also, by going back to our activities - activist days we had a saying for capitalism.  At the time that we said that capitalism had two faces and both of them were ugly and as I present my paper I think you'll probably begin to understand why we are saying this.
 In our submissions we are looking at the role of the corporate sector, the role during the Apartheid era, the role of the Reserve Bank and the role of certain Black business people.
 The implementation of the policies of the Apartheid regime reaped (indistinct) havoc on the Black population of our country.  People of colour had every aspect of their lives controlled in that their movements from the cradle to the grave were monitored and restricted.
 The schools and hospitals they could be admitted to, the areas of their residence, the places of their work, the skills they could acquire, the market that they could sell their labour to were all governed by statuary legislation.
 A (indistinct) of laws such as the Land Act, Group Areas Act and various legislation governing labour and influx control ensured that the Black population's development and progress was limited.
 Black business had to (indistinct) with a host of legislation which impeded its advancement.  Black business had to operate within the confines of demarcated areas in their townships.
 In this scenario, what was the role of the corporate sector?  Was it an innocent bystander, claiming it had no responsibility for the actions of the Apartheid Government, or was big business actively colluding with the Apartheid regime to an act legislation that would restrict the advancement of the Black people?
 There was hardly any opposition or protests from the captains of industry to the injustices meted out the Black population.  Their silence in fact suggests tacit approval of the policies of the Apartheid Government. 
 Prof Terblanche called it a conspiracy.  We would prefer to refer to it as the unholy alliance of big business and Government.  After all the implementation of these harsh laws not benefit their business enterprises resulting in increased profits.
 For profit maximisation was to them a greater priority than human rights.  The corporate sector's benefits included cheap docile and readily available labour, absence of any form of competition from Black business, mobilisation of capital resources from the Black population for utilisation by big business, the most viable business and industrial areas reserved for big business, employment opportunities and advancement to senior management positions and to the board of directors reserved for Whites to the exclusion of the Black people.
 Power remained exclusively in the hands of White people.  Corporate social responsibility;  what pro-active role did the corporate sector play in ensuring a better life for the Black employees and their families in terms of health, education and housing during the Apartheid era.
 Here I make this as a comparison to the benefits received by White employees.  I say the role of the big business in social responsibility was minimal.  The resources invested in social responsibility programmes was negligible.
 Forced removals, the implementation of the group areas act, forcibly removed thousands of people from their homes and businesses causing hardship, aggravation and loss of income.  The social fabric of (indistinct) viable communities was destroyed.
 The case of example I paid you;  district six, the (indistinct) of Durban.  Properties were expropriated by the Apartheid Government at way below market prices.  Big business benefitted from these force removals in that is snapped up properties directly or indirectly via Government structures such as the community development board at bargain basement prices.
 There are numerous instances of properties expropriated by the state from Black business and sold almost immediately to the White business sector.  Big business also captured the custom build by Black business over many years of hard work.
 During the time when people were thrown out cross roads in the Cape during the cold winter months, I do not recall any opposition from the White business sector.
 Our financial institutions.  The financial institutions such as banks, building societies, assurance companies, pension funds, etcetera were owned and controlled by the corporate sector.
 These institutions mobilised billions of rands from the Black population and utilised these funds for investments in and loans to businesses owned primarily by Whites and for development of businesses and residential property, hotels, holiday resorts, etcetera for the White community.
 There was little or no investments in the Black townships.  The financial institutions rational for this was that investment in Black areas posed great risks.  Whilst it was good to accept moneys from the Black community, it was risky to invest in or lend to them.
 I'm not here for (indistinct).  I'm saying that as far as the way forward is concerned, Prof Terblanche talked about our wealth tax, I would prefer a one off payment, a fund to be started off where a levy could be imposed of say between one to five percent on the nett assets of the corporations that benefitted directly from Apartheid and to set up this fund with the idea of providing some form of reparations to those who suffered under Apartheid, to the disadvantaged, to the people in small business, training skills, mentorships, all sorts of things could be provided.
 Corporates should have an affirmative action policy that will ensure the rapid employment and advancement of the people of colour in senior management positions and to the boards of directors of big companies.
 The corporate sector must be engaged in social responsibility programmes where a goodly portion of their nett income is utilised in providing health, housing and education for their Black employees and their families and contribute it to other forms of social advancement for the Black community.
 Government must ensure that they subcontract a small business to small Black business and not to front companies owned by Whites.
 The role of the South African Reserve Bank.  An often held belief circulating during the Apartheid era was that the Reserve Bank operated independently, free of any Governmental influence.
 This was a myth as the Reserve Bank's fee of operations was influenced and controlled by the Apartheid Government.  Monetary policy and interest rate policy were driven by a political agenda.  How else does one explain the rise and fall in interest rates after and before elections?
 The Reserve Bank's claim of being apolitical is another myth.  The shares of the Reserve Bank were held by Government and the White corporate sector.  Senior management positions at the Reserve Bank from the Governor, Deputy Governor, General Managers, etcetera, were all held by Whites, many of whom were members of the Broederbond and right winged organisations.
 Up to the early nineties, Blacks were employed to the best of my knowledge in menial positions;  to make tea or as cleaners, drivers and security personnel.  Even today there are few senior management positions held by Blacks at the Reserve Bank.
 The Register of Banks and Bank Supervision Division.  The office of the Register of Banks and Bank Supervision Division, although autonomous are situated at the Reserve Bank.  Banking licence, a function of this office, is the approval of banking licences.
 Licences to operate banks were by and large granted to White controlled companies.  Those Black organisations which were granted licences had abnormal conditions placed on them.
 Thus, for example, a requirement would be the bank's shareholders may only be members of the Black community.  Such conditions from an institutions that claimed to be apolitical.
 In 1987 Pik Botha was directly responsible of granting a banking licence to a bank whose name I do not want to mention, but here is a copy of the Hansard in which he says that if the Government were to grant the Muslim community a banking licence it will help me in my work abroad.
 How the Minister of Foreign Affairs influences the Reserve Bank which claims to be independent, I do not know.
 Lifeboats.  Where banks experienced difficulties or had liquidity problems, the Reserve Bank would assist by providing a lifeboat such as in the case of Trust Bank where the Reserve Bank advanced billions of rands at an interest factor of one percent at the expense of tax payers.
 The Reserve Bank has gone on record as stating that had it not rescued the Trust Bank, the country's banking system would collapse as billions of rands of deposited funds would be lost.
 Yet small Black controlled banks in difficulty were not give assistance by the Reserve Bank.  It would appear that these small banks were expandable as their closure would not impact on the country's banking system.
 The way forward.  We support the view that the Reserve Bank should be independent.  However, its actions should be transparent and accountable.  Monetary policy and interest rate policy should be set by a committee of experts reporting to the Governor of the Reserve Bank.  The committee members should be drawn from the private sector.   The Reserve Bank must at all times be apolitical and free of any form of Government pressure or influence.  The senior management and middle management positions at the Reserve Bank must be held by competent Black people so as to reflect the diversity of our new democratic society.
 A rapid implementation of affirmative action is needed.  The powers of the Registrar of Banks must be (indistinct).  He too should be guided by a committee of experts who should advise him on various matters relating to banking supervision.
 The Reserve Bank must have a policy of assisting the establishment of small Black controlled banks.  The current requirement of a minimum, (indistinct) should check to 50 million rand to honourers and not achievable by small companies wanting to establish banks.
 The Reserve Bank must also assist small Black controlled banks that experience difficulty or have a liquidity problem.  Such assistance must not be confined only to large White controlled banks.
 I've got here as the last a role of some Black business, but it could be expanded to say that all of some businessmen.  There were during the Apartheid era members of the Black business community who collaborated with the Apartheid regime.
 These businessmen together with corrupt politicians in the tri-cameral Government were engaged in procuring business contracts, land, houses etcetera for their own benefit to the exclusion of those rightfully of these assets.
 The businessmen were also involved in sanctions busting.  Sanctions busting exercises by encouraging importation of good from abroad for the Apartheid Government and the private sector and exports of local goods, produce, arms etcetera under various guises, for example made in Swaziland to countries which normally would not purchase goods from South Africa.
 They received monetary and other rewards from the Apartheid Government for their endeavours.
 The way forward here is a very simple one.  The present Government must make a data base of these collaborators and exclude from any Government contracts.
 Thank you very much.