Special Hearings — Business Hearings — 1997-11-12

JOHAN RUPERT: Thank you chairperson.
 Chairperson, ladies and gentlemen, thank you for the invitation that you've given us to make a submission.  In the past, the previous government did not take much notice of our views or criticisms.  Up to listening to some of the submissions yesterday and this morning, especially yesterday, we're going to make a slightly different presentation.  However I felt, that there was clearly such, still such a sad lack of communication that perhaps we needed to speak from the heart a little bit and so I wrote this last night and therefore this is a summary and speaking to the submission.
 I think we must start with the role of private sector in society.  Now that will always be a heated debate and I do not think twenty minutes or twenty hours or twenty days will suffice.  But this role of the private sector, is even more pertinent if business is perceived to be operating in an unjust society as we've clearly been doing during the period under review, and before.  Now a public company like ours has a great number of stakeholders.  We have shareholders, we have employees, colleagues.  We have suppliers, clients and the communities or the society that we operate in.  Finally you've got a most unwanted partner, the tax man, which represents the government, that takes forty percent of whatever your economic activity can positively contribute but does not share in the downside.  Now, assuming that we operated in normal society, how would we have been judged by our stakeholders?  Our suppliers and clients have always been treated fairly and I've every reason to believe that we've lived up to their expectations.  We believe that we've treated our employees loyally and fairly, we certainly did not do enough affirmative action.  It is difficult if you are in a company where the staff turnover is far less than two percent and especially if you're under attack and your numbers are constantly diminishing.  What do you do?  Do you appoint somebody above somebody that's had twenty years service or not?  I fully admit that we've not done enough.  
 We believe that we've spent enough time and money on training.  The fact that we could, during a problematic period in one of our Berlin factories, take thirty South Africans, that roughly represented by coincidence the racial balance of our country and that we could increase the productivity in the German plant in six weeks by over ten percent, I think speaks highly of the level of training and the commitment that we've had to that.  Our current minimum salary package, in the Rembrandt Group is over R3 600 a month, and that is for a cleaner in the factory.  
 Our shareholders have also done well but I don't think you're interested in that.  Over the years they've enjoyed superior returns on their investments.  Now we've tried to be good corporate citizens wherever we work in the world.  We've tried to put something back into society in South Africa.  We've felt that we should be judged finally by what you put back into society and not what you take out.
 We've initiated and funded projects throughout the country.  The taxman, has also benefited greatly.  Over the last seven years, we've contributed well over ten billion rand to the fiscus.  Furthermore, the original one point five million that my predecessors invested abroad in 1955, yielded a nett inflow of billions of rands back into this country.  We are a South African company.  The shares are held in South Africa.  We are not some multi-national, yes, we have subsidiaries and we have companies abroad, but the shares are held by South Africans, by pension funds, by life offices.  This was not achieved by any exports of South African raw materials or finished goods.  In other words, we did not build this company abroad, off the "blacks sweat of black workers", unionized workers and hostels.  This money went abroad, people went abroad and worked very hard.  The value of this investment, held by South African residents is today in excess of twenty five billion rand.  By the way, for  many years this exceeded the countries' gold and foreign exchange reserves.  
 Now, I'm immensely proud of those achievements.  It shows what could be achieved by a few people, from the southern tip of Africa who believed in miracles and set out to make them happen.  However, for over forty years in South Africa, we've operated in an unjust society.  I think the first question we must ask, is, did the private sector benefit from this unjust and inhumane system of social engineering?  And I think that's a (unclear) point.  I'm not going to debate it, I think that's a debate that can be held over weeks.  Certainly, if that had to be the case, it is very interesting that we had the total unique situation where, business in South Africa was to the left of government.  Now, maybe not far enough to the left, certainly retrospectively it wasn't too far.  But I cannot recall of a single government abroad, in every bit of economic and political history that I've read, that had to contend with businessmen that actually criticized them from the left.  
 Now, within the private sector, whites were absolutely advantaged at the cost of blacks.  I must say I first came across this when I came to live in Johannesburg in the early eighties and I found; and I started right here in the Carlton centre a small little joint venture with a black friend, which was a black hairdressing salon that later grew into a hair care business.  Firstly the Group Areas Act prohibited us, but in the end because of the partnership had a problem, they couldn't take us to court.  The interesting phenomena that happened was the number of black friends that came with superb business ideas that had no access to capital.  Now you must remember coming from the Cape, and then living in New York, I didn't appreciate the problems one had.  One had a feeling and one knew, the day to day problems, one did not appreciate.  People had great ideas, they had the talent, the skills, they wanted to work.  But they were denied access to capital.
 They weren't allowed the most basic, which is private land ownership, home ownership.  How do you build capital, sir, without having a immovable asset in an area where people will lend against and what caused me and later on the group to start the SBDC.  I don't agree with everything that Professor Terblanche says, but the fact that whites have been advantaged, within in the private sector, sector at the, is undeniable.  And in specific cases certain companies and individuals certainly did benefit.  Now I think the question that I'd like to address is, did our company benefit from apartheid?
    I'll try to give you a brief overview of Rembrandt's role during these troubled times.  Rembrandt was founded by Afrikaners and with Afrikaner support.  Quite frankly, nobody else would invest.  So, it basically was the wine farmers in the western cape that had the only assets.  Now over the life of the company we've had only two Chief Executive Officers, and its well known, and I will address some of the statements made in the recent past that both my father and I have been and were outspoken opponents of apartheid.  We viewed the system as an immoral oppressive attempt at social engineering.  Now with the advent of apartheid, I wasn't born yet, but, especially the Afrikaner had a couple of simple choices.  One either agreed, or you immigrated or you tried to oppose the system from the inside.  Now my forefather arrived here in 1662.  And my family and I have always considered ourselves South Africans and proudly so.  So, we chose the latter option to stay and to oppose the system from the inside, using what NP Van Wyk Louw described as 'lojale verset'.  Now it's, I do not know Wynand how you translate that.  Loyal resistance I would say.  All my adult life I pleaded for full majority rule, not a limited franchise and I'm on record as doing so.  Now what happened to Afrikaners who disagreed with the systems, system?  What did we have to face?
 Now I'm afraid not unlike certain signs today, after being voted in power, for quite a long time, the Nationalist Party viewed themselves as the permanent government and then the critical distinction between government and state disappeared.  Therefore any attacks on the Nationalist Party's racial policies, became viewed as attacks on the state.  Helped by some newspapers, the SABC and other influential opinion forming bodies, any opponents of racial discrimination were therefore quickly vilified as unpatriotic liberals and of all things Mr Kronen will laugh, communists.  I've been called a communist more often probably than you.  For those in the room who do not believe the ferocity the attacks on our family, I have files and files full of newspaper clippings that I'd be glad to show you if you contact me in Stellenbosch.  On the outside, on the other hand, we were attacked racist fascists.  Now during these attacks, despite these attacks, we remained what is now called, a profile of patriotic bourgeoisie, practicing 'lojale verset'.  We tried to build progress through partnership.
 Now the most remarkable thing is, that the same people, the same executives, working for Rembrandt, doing the very same things, generated a return on investment outside South Africa of some fifty percent higher than inside our own country.  And furthermore, to the best of my knowledge, we've only once dealt with the South African government or state and I did it against my father's wishes.  That was with the establishment of the cellular telephony in South Africa a couple of years ago.  I believed that it was a fully transparent process and Mrs Marcell Golding and Johnny Copeland can attest to, that led to Rembrandt helping their unions pension funds to make hundreds of millions of rands through an (unclear) deal.  
 Now we did not export raw materials or finished products out of South Africa, we've not been accused of benefiting or of doing any specific deal with the state or government.  And at three thousand six hundred rand a month that we pay our floor sweepers in our Rembrandt factories, that's more than maths teachers in high schools.
To summarize, we believe that we've had no sweetheart deals, no sweat shop labour in the Rembrandt group, no regular (unclear) protection and yet substantially higher returns on investments outside the country than inside.  In the same investments fields by the same management.  Admitting that we had not done enough, I fully admit that I still fail to understand those who say we benefited from apartheid.  The sad contrary is true.  Had the founders of the company emigrated, they would have had far superior returns on their investment.  South Africa however, would have lost jobs, taxes and foreign exchange.
The two point eight billion that South Africa earns, out of Ridgemond wouldn't have materialized.  However, these broad types of statements are still being made without getting specific.  We heard it yesterday.  I'm sorry to get personal but another example of false accusations is the statements made by various people that Doctor Rupert said, quote
"We have to find a solution that won't end up giving us 'one man one vote'".
There was a little word left out and I have the transcript of the speech.  The word that was left out, was 'once'.  What he said was,
 "We have to find a solution that won't end up giving us 'one man one vote once".
I think you'll agree that there's a vast difference in using that to try and prove your statements.  Now, McCarthyism has entered the English language as a captual word, used to denigrate those who allegedly make fraudulent accusations against others.  It's ironical that this term can now be used to aptly describe statements made recently.  
In a country with massive unemployment problems, with large deficits before borrowings and nagging foreign exchange reserves, I would like to say, that we've done our best for the country, economically.  And finally, it was right here in Johannesburg that a very prominent member of the previous government said the following to me in front of one of South Africa's most imminent and powerful businessmen,
"Rembrandt is not big, we will break you."
And more ominously,
"Politics is a cut throat business and I mean that literally".
Now despite all of the above, did we do enough to fight apartheid?  Did we do enough as the BMF have correctly said to advance black management?  No.  At the time we certainly thought we did.  In retrospect, one could never have done enough.  I was fortunate enough to have met the late Steve Biko in the early 1970's when he was the head of SASU.   As an Afrikaner, the immorality, of his and other murders, will forever live with me as a permanent reminder, of the cruelty of man to man, has perpetrated during the evil years of apartheid.  And I hope and pray that our fellow citizens will forgive us.  Thank you.