Special Hearings — Business Hearings — 1997-11-11

GERHARD VAN NIEKERK: Chairman, I think I fully agree with that and I think if you go back into our own history, that was something that we said to each other in the early seventies; and I'm talking now1972, 1973, as a junior manager in that organisation at that stage I was also personally involved in that where we said, clearly things have to change.  We took that decision, we've moved into different parts of the world, we aggressively trained our management to; in a life insurance organisation, the nature of your top management, is that it takes up to two plus decades to actually get somebody actually coming through from the bottom up, if you want the training.  Many of them need to, need high academic qualifications, you need to be an actuary or accountant or a legal person or something like that.  We certainly, if I look at my management structure at the moment, it is true that at the top twenty five, there are no, at the moment, no black person represented there.  The, at the next level, there are a number of them coming through and I would venture a guess that if we sit here in three or four years time, that there would have been a natural progression of people coming through into top level of the organisation.  It has been a home-grown effort, it has been something that has been made difficult over the years because maybe we were ahead of our time and clearly those people are at a premium.  We have lost many many people that we have trained to competitors.  But we've made that effort and I think we started before the crunch really came in terms of the Soweto uprisings and all those kinds of other things that spurred a lot of action within the communities. So I believe that if we have to put us on a spectrum, with most people, that yes, we still haven't made it properly, but that we started earlier than most and that we are aggressively pursuing the target.

CHAIRPERSON: Bongani?

BONGANI FINCA: Thank you, your Grace.  You have argued in your submission very strongly the question of mandate.  That you regret that you did not seek mandate from your members, to oppose in a strong and effective way  the policies of the previous government.  But then you go on to say that you actually were seconding some of your key staff in an advisory capacity to the government.  And I don't seem to hear that you were concerned about mandate.  Were you not aware that you were dealing here with the government or  which was illegitimate in the eyes of the majority of the people in the country.  It had been declared by the UN to be pursuing policies which considered to be a crime against humanity, it was a beast of a government.  But you continued to second  your staff

GERHARD VAN NIEKERK: No I think that was a misconception Mr Chairman, we did not second people to go and work in government.  What I said is that we made people available to serve on some advisory bodies like the; our chairman was invited to serve on the president's economic advisory council, that was a particular decision that was taken, but for the rest there were no particular secondments in the way that I would understand that word, to mean that people

BONGANI FINCA: Could I just withdraw the word secondment.  I'm dealing with a language that is not my own.  The word secondment, that means something else.  I mean you sent advisory, you gave advisory assistance to the government, a government which to the majority of the people of this country were pursuing laws which were atrocious.

GERHARD VAN NIEKERK: Is it wrong to actually engage somebody where you have an opportunity to impact those policies.  I have difficulty in understanding, that that is per say a wrong action.

BONGANI FINCA: The crux of my question is mandate.  You said that you could not oppose the policies of this government, although they were obviously very cruel and violating human rights because you didn't have a mandate.  Did you have a mandate to actually send advisory assistance to this government?

GERHARD VAN NIEKERK: We did not perceive that that was necessary for that particular action, no we didn't see that.

BONGANI FINCA: Chairperson, my second question is on the question of investments.  Did your company feel that it was necessary to have an ethical code to guide its investment policies, did you feel that if a company that, in a particular business which was responsible for violating human rights of people, that company is in fact by investing in that particular venture, actually benefiting in gross violations of human rights and participation of gross human violations.

GERHARD VAN NIEKERK: It was an issue that came up from time to time.  But I think the difficulty that we were faced with in South Africa; if I can sketch the economic realities of the day, is that we had a situation, where we were a successful organisation in terms of, well a lot of people supported our products and polices and a lot of money became available for investment.  We had a strict exchange control environment where you only allowed to invest money within the country.  The volumes of money between ourselves and our competitors in the end, said that you; and in that environment, the equity market was clearly the best place for us to invest our clients' monies.  And it was very difficult as those people themselves started to form conglomerates because they were not allowed to actually take their money and invest in global industries focussing on their particular areas, that there were so many organisations that were somehow involved that it became physically impossible for you to, even if we tried, that we would not have been able to actually implement such a policy.  It was not a possible thing for us to do, considering the volumes that were actually flowing through the life assurance pension fund industry that was taking place during that period.  It was a period of very very rapid growth.

DR RANDERA: (?)   Mr  Van Niekerk, two questions, one is, it's been said that in the past Old Mutual refused to make meaningful investment in the townships, townships meaning where the black people lived.  Pleading that these areas are far too dangerous to risk policy holders funds there.  Has that policy changed at all?

GERHARD VAN NIEKERK: Well, if we can go back in history

DR RANDERA: Just come back to what Bongani was asking earlier on and taking off from what you said, that there was no questions of mandates.  Was that based on a mandate as well?

GERHARD VAN NIEKERK: No, if I can go back in history.  You know, we fought, and that is one area where we tried very very hard to get rules changed, because, fine we were not allowed to, the law made it impossible for us to invest in those areas.  We were, in many of these areas, eventually we got permission and you can go and look at most of the townships and the rural areas, we have actually invested in property, these days, because it makes sense, because where we can conduct our business from and we can make space available to other people.  So clearly it was never a point of issue for us.  If it was possible and made sense, we would have done it, but for many many years it was just not possible.  And subsequently we have done a number of those kinds of investments.

DR RANDERA: Sorry Mr Van Niekerk, maybe I'm being a bit dumb, but when you say laws, what laws actually prevented you from investing in an area, I mean I

GERHARD VAN NIEKERK: The Group Areas Act

DR RANDERA: I know about the Group Areas Act.  I know about Separate Amenities Act, but I don't know of any law that said, I cannot actually invest my money in housing, or infrastructure in the townships