Showing posts with label Dikgang Moseneke. Show all posts
Showing posts with label Dikgang Moseneke. Show all posts

Sunday, August 19, 2012

Don’t let narrow interests affect constitution, warns judge

THE constitution is not cast in stone but it should never be changed "only to pander to narrow, sectarian interests", said Deputy Chief Justice Dikgang Moseneke on Friday. In his Ruth First Memorial Lecture delivered at the University of the Witwatersrand, Justice Moseneke addressed, though not explicitly, many of the continuing, sometimes heated, debates about the role of the judiciary in South Africa.

Some in government, including President Jacob Zuma, have questioned the way courts have set aside decisions and laws of the democratically elected executive and Parliament. Others have taken a view on the other end of the spectrum: that any attempt to change the constitution would be a threat to constitutional democracy.

Justice Moseneke said the constitution was the most recent expression of the "collective convictions" of the people of South Africa. Debating whether it was "perfect, or whether it is a sufficiently progressive bargain" was a necessary, and useful, debate — provided it was remembered that the constitution had been settled by "the democratic principle". "The unanimous representatives of the people installed it as our first law," he said. "Of course the people, through their representatives, may change it. They have indeed done so at least 15 times before. Amending the constitution is the prerogative of the people who installed it, provided the requisite majority is present and the formalities of the Constitution are followed," he added. The constitution "never was, and is not, cast in stone and yet it should never be changed only to pander to narrow sectarian interests", he said.

Justice Moseneke said the constitution enjoined all organs of state to be transparent, accountable and responsive. "These values cannot now dissipate under the madness of incumbency," he said. This applied equally to the judiciary. "In my personal and judicial life I may not act unlawfully or inimical to the vision of our people as encrusted in law and valid policy."

He said he welcomed public debates on the "merits of the reasoning and outcome of my judgments", adding: "And yet it is singularly unhelpful to suggest that because one differs with a judgment or outcome the judge concerned is serving an ulterior goal or political party.

"Judges are accountable to all our people and to no political or ideological tendency … In some instances, judges get the facts or the law wrong. That tells us nothing about their judicial probity. Our democratic system, like most in the world, readily acknowledges judicial fallibility and arrests that risk by creating a hierarchy of courts with appellate responsibility."

It was important to "debunk the mystery around judicial function", he said. The role of the courts was "not proactive, but reactive ... We don’t choose cases; they choose us."

Thus the role of judges was also limited by the kinds of cases that came before them and their facts, he said. So while the courts had done a remarkable job with cases of discrimination, socioeconomic rights and workers’ rights, there had "sadly" been very few cases coming before the courts on land restitution or expropriation.

"It may be that the property and restitutionary provisions in section 25 of the constitution on land have been underworked," he said.

At the end of his lecture, the deputy chief justice got a standing ovation from the packed auditorium at the New Wits Arts Gallery.

Source: Business Day

Sunday, September 4, 2011

JSC bruising keeps Justice Mogoeng on the ropes

Justice Mogoeng Mogoeng's interview for the Constitutional Court chief justice position by the Judicial Service Commission in Cape Town on Saturday was no heavyweight fight. Despite the only contender's initial swagger as he entered the Eastern Ballroom of the International Convention Centre at around mid-morning to open his interview with an attack on those, especially the media and legal commentators, who had been critical of his nomination by president Jacob Zuma, this was a mismatch for Mogoeng. One where, especially in the session following lunch, he had to contend with several bruising jabs from commissioners over whether he had the intellectual capacity to be the "flag-bearer of the judiciary"; gender insensitivity; perceived homophobia; and his ethics.

Such was the flurry of punches that, at one point, the contender cracked, snapping at the JSC's chair, deputy chief justice Dikgang Moseneke, to stop being "sarcastic" when he was pushed on his "jurisprudential position" behind dissenting on the Le Roux v Dey Constitutional Court judgment. In that judgment, Mogoeng was the only justice of the 11 who heard the case to hold that it was defamatory to call someone gay. He didn't state why -- casting a shadow over both his judicial rigour and the way his attitude towards gays and lesbians was perceived. When asked about the matter by commissioner Engela Schlemmer, Mogoeng initially admitted, "I think I should have provided reasons. I erred in not providing reasons," he said. He then added he did not have sufficient time to "reflect on the matter" before potentially writing a judgment and hence, had not. When pushed by both Schlemmer and Moseneke on his "jurisprudential position" behind his initial dissent, Mogoeng was initially evasive and eventually cracked when called on the very specificity of the question, snapping at Moseneke to stop being "sarcastic". Eventually, unable to cough up a jurisprudential position, he backtracked, and said: "I say now: I should not have dissented."

It was a telling admission. And a body blow for a potential chief justice hoping to assert his intellect. It caused Koos van der Merwe, the IFP MP on the JSC, to ask Mogoeng if he had a short temper. The judge answered in the negative before being chastised by Van der Merwe for his "arrogance". "I have sat on this commission since the beginning and this is the first time in 15 years that an applicant is so arrogant that he has done what you have done. It points to your unsuitability as a chief justice," said Van der Merwe.

Gender activists in the massed public gallery could be seen visibly squirming as Mogoeng sought to defend his reduction of sentences in various rape cases he had presided over because, he said, rape "varies in degrees". Commissioner Krish Govender had, mindful of the "violence and trauma" inherent in "all" rape incidents, pushed Mogoeng on his reduction of sentences for convicted rapists -- especially since the judge had identified mitigating circumstances which in some cases included the perpetrator being married to the survivor and in another (S v Sebaeng) where the perpetrator had, as Mogoeng noted in his judgment, demonstrated a "tender approach" in raping a seven-year-old. Mogoeng asserted that he had merely noted the "degrees" of rape in his written judgments and also pleaded being a young judge who "was learning from my superiors and I followed my superiors" in reducing sentences. Asked by Moseneke if he would rewrite those judgments, Mogoeng demonstrated one of several Zuma-like moments with a "Maybe. I don't want to put myself on the spot. Maybe."

While Mogoeng was found wanting with rigorous questioning from commissioners such as Govender, Moseneke and Schlemmer, he also undoubtedly had several firmly in his corner. If the JSC interview were a boxing match, then minister Jeff Radebe would undoubtedly be Mogoeng's sweat-dabber in the corner, towel at the ready to dry the brow -- or staunch the blood -- between rounds.

Radebe and the three ANC MPs on the JSC, including deputy ministers Fatima Chohan (home affairs) and Ngoako Ramathlodi (correctional services) together with Advocate Dumisa Ntsebeza (one of four presidential appointees to the JSC) were instrumental in ensuring Mogoeng had breathing space between probing, questioning combinations with much softer questions and observations. After Mogoeng's defence had crumbled following his inability to provide any jurisprudential reasoning behind his dissension in the Le Roux v Dey judgment, Ramathlodi stepped up to note that the judge was a "mirror image" of himself. Both, noted Ramathlodi, had grown up poor, in the rural North West, but had succeeded in becoming "an inspiration" to the rural youth back home.

Earlier in the morning, many of these commissioners had argued against a submission by the DA's Hendrik Schmidt, that discussion should take place about whether nominations for more candidates ought to be reopened. Further discussion on the matter is likely to take place on Sunday at the Grand West in Hotel after the interview of Mogoeng, at the same venue, closes. Yet, despite the obvious partisanship of some members of the JSC, the complete irrelevance of others (especially those from the National Council of Provinces) and Mogoeng's early morning broadside at critics, the prospective chief justice must have felt like being at the end of Muhammed Ali's fists for long periods on Saturday. He was asked about his ethics in not recusing himself in cases prosecuted by his wife (there were no clear guidelines, but he did feel "discomfort" at the time) and his paucity of seminal, reported-upon judgments and ability to inspire and lead the Constitutional Court and the larger judiciary ("I have full confidence in my intellectual depth").

Jacob Zuma met Mogoeng Mogoeng for the first time at a dinner in Mafikeng in 2008
He also attempted to rebut perceptions that he was sympathetic to the executive by citing four cases where he had ruled against government and denied claims that he had a close relationship with Zuma that might have influenced the president's choice. Mogoeng said he had "no relationship whatsoever" with Zuma, and stated that a 2008 meeting with the president -- exposed by the Mail & Guardian -- had been their first and that he had met the president three times since then. But Mogoeng reiterated that he had spoken to Zuma only at their first meeting, and their last meeting, which took place when he was informed of the president's decision to nominate him for the chief justice position. Mogoeng added that he did not believe this would lead to a "corrosion of the separation of powers".

It was a bruising day for Mogoeng, but the bout is not over. The JSC hearing is set to continue on Sunday at 9am.

Source: Mail & Guardian

Wednesday, August 17, 2011

Dikgang Moseneke: It's not about what the ANC want

Zuma overlooking Moseneke has interesting implications. They belonged to different liberation movements, separated by ideology but united by the goal to defeat apartheid and to establish a democratic order in which the oppressed African majority would enjoy human rights. Jacob Zuma of the ANC and Dikgang Moseneke of the PAC - a 1959 breakaway of the ANC - were jailed on Robben Island by the apartheid regime for their political activities.

On his release Moseneke, who had studied law and politics through Unisa while in prison, pursued a career in law. He practised as an advocate in the Pretoria Bar before he joined the private sector, where he held high-profile positions. For his part Zuma, who informally taught himself to read and write, became a career politician and government MEC. Both had taken part in the drafting of the new democratic constitution they would later be expected to uphold in their different capacities.

Zuma was central in delivering the violence-prone IFP to the transitional negotiation table that led to the adoption of the Constitution. While practising law, Moseneke took part in the technical drafting committee. Once the interim constitution was adopted and Moseneke had left the Bar, then-president Nelson Mandela persuaded him to leave his lucrative plum business career for the high court as a judge. Moseneke was among a few black judges expected to uproot the apartheid era jurisprudence and build a new one based on the new Constitution.

The Constitution of which the drafting had united Moseneke and Zuma, had also become a source of the necessary separation as part of the division of powers between the judiciary, executive and parliament. Enter then-president Thabo Mbeki, who appointed Zuma as his deputy and Moseneke as deputy to Chief Justice Pius Langa. This meant Zuma and Moseneke held similarly powerful positions respectively in the executive and judiciary.

Zuma later became head of the executive with the power to appoint a chief justice. When Justice Langa retired, he appointed Justice Sandile Ngcobo, who was due to retire from the court, overlooking Moseneke. Ngcobo delivered his last judgment on Thursday last week after his own court had earlier dismissed as unconstitutional Zuma's attempts to extend his term of office. Zuma was very comfortable with Ngcobo. Ngcobo had ruled favourably in cases crucial to Zuma's political life.

When the Constitutional Court found valid Scorpions search-and-seizure warrants on Zuma's lawyers, Ngcobo was the only dissenting voice. When the court found that the government was duty-bound to establish an independent anti-corruption unit, Ngcobo dissented. Now that Ngcobo has retired, the legal fraternity has been anxious about whether Zuma would appoint Moseneke, with whom he appears to disagree in his judgments and political thought.

Yesterday, Zuma nominated for the chief justice post Judge Mogoeng Mogoeng, a lay preacher, who joined the Constitutional Court in 2009. At the heart of Zuma's decision to overlook Moseneke are the remarks he made a few years ago shortly after Zuma's Polokwane victory, that he would spend his tenure in the judiciary serving the people of South Africa - "it's not about what the ANC want".

Zuma reacted angrily to the comments, as he believed, quite wrongly, they were oppositionist to the ANC. The political furore the statement caused was followed by a meeting between ANC Deputy President Kgalema Montlanthe, Moseneke and Langa, who was still in office. After the meeting, preceded by claims that judges were "counter-revolutionary", the ANC issued a statement, saying it was satisfied with Moseneke's explanation. According to Motlanthe the meeting concluded that Moseneke's statement was misunderstood as he sought merely to stress judicial independence from all political parties. Motlanthe later told a gathering in Cape Town the ANC accepted Moseneke's explanation.

Zuma's overlooking of Moseneke - which in itself is not legally wrong but politically naive - will have interesting implications. Firstly, if Zuma's problem lies in Moseneke's judicial philosophy of non-deference to the executive, then tough luck to him. Judging by his recent comments about judges who overturn legis-lation passed by Parliament, it makes sense that he liked Ngcobo's executive deference approach. But appointing Mogoeng is unlikely to change the court's philosophical posture. The present political context, in which unconstitutional laws are being proposed and corruption runs rampant, obviously has a psychological effect on the judiciary, who could feel constitutionally obliged to stop the malaise. Zuma's gripe will remain personal and petty rather than substantive. It won't swing the court's activism stance. Not now. The edifice of jurisprudence will take decades to undo.

Secondly, appointing anyone less experienced than Moseneke in Constitutional Court matters and in running of the court itself, means Moseneke remains a towering figure in that court.

Thirdly, avoiding Moseneke means despite his claims that he follows in the footsteps of Madiba, Zuma is unable to be reconciliatory. He is unable to rise above personal petty political bitterness triggered by a misunderstanding which was explained to the satisfaction of his own party.

Fourthly, it means Zuma places high premium not on who is well qualified for the top job, but on who he is politically comfortable with. This also places an unfair burden on Mogoeng because public perception would have a certain narrow political expectation of him. He will have to continue to defer to the executive. It has paid dividends, unless he works to prove a point.

Fifthly, it means Zuma has forgotten the bigger political contribution Moseneke made in the struggle against apartheid simply because Moseneke appears to be too independent for his liking.

Finally, it also means that Zuma would rather work with the Freedom Front and National Party ministers, sharing cabinet secrets with them, than trust a well-qualified freedom fighter with whom he once shared the prison for a noble cause.

Mkhabela - editor of Sowetan
Source: Sowetan

Friday, June 10, 2011

Zuma's move on Ngcobo 'illegal'

It was always highly unlikely that President Jacob Zuma would allow Deputy Chief Justice Dikgang Moseneke to become chief justice, according to advocate Paul Hoffman, director of the Institute for Accountability in South Africa. "You don't think that was going to happen after what the president did last time," he said, referring to Zuma's announcement in 2009 of Sandile Ngcobo's nomination to take over from Chief Justice Pius Langa when he retired.

Hoffman described Zuma's recent decision to extend Ngcobo's term by another five years as "unconstitutional, illegal and invalid". "I say this with a heavy heart. Sandile Ngcobo is a proper judge because he knows what the role of the rule of law is in a constitutional democracy. "And if an Act of Parliament were to be passed that would extend his term, I would welcome his reappointment," said Hoffman. "But as no Act of Parliament that allows this extension has been passed, I must be true to the law and therefore critical of the president's decision."

Ngcobo's 12-year term is coming to an end in September, but Zuma announced last week he would be extending the term to 2016 in terms of the Judges' Remuneration and Conditions of Employment Act. Legal sources said that Moseneke was widely regarded in legal circles as "too independent" for the post. In 2008 the ANC issued a statement complaining that comments Moseneke made at his birthday party had shown disdain for its delegates to the ANC's national conference in Polokwane in 2007, but it later retracted its complaint. At the time Moseneke was quoted by the Sunday Times as saying: "I chose this job very carefully. I have another 10 to 12 years on the Bench and I want to use my energy to help create an equal society. It's not what the ANC wants or what the delegates want; it is about what is good for the people."

Hoffman said Zuma might also be concerned about three coming legal challenges in the Constitutional Court, two by the Democratic Alliance -- the controversial appointment of Menzi Simelane as prosecutions boss and the decision by former acting prosecutions head Mokotedi Mpshe to drop corruption charges against Zuma -- and Terry Crawford-Brown's bid to force Zuma to appoint a commission of inquiry into the R30-billion arms deal in which Zuma himself was implicated. Hoffman said the Constitution clearly stated that a Constitutional Court judge could hold office for a non-renewable term of 12 years, or until he or she reached the age of 70, whichever occurred first, except where an Act of Parliament extended the term of office of a particular judge.

Professor Pierre de Vos, a constitutional law expert, wrote in his online blog, Constitutionally Speaking, that the Constitution was amended in 2001 to accommodate respected former chief justice Arthur Chaskalson and extend his term of office but after much heated debate Chaskalson retired. "At the time, many constitutional lawyers argued that this amendment was unwise and opposed it. Some lawyers who respected and even revered Chaskalson had a problem with the amendment (generally known as the Chaskalson amendment) because it was argued that as a matter of principle it was unwise for politicians to be involved in extending the term of office of a judge, especially the chief justice." The problem was that it would ­create the impression that the judge was not independent, he said.

Professor Raylene Keightley, director of the Centre for Applied Legal Studies at Wits University, said the legal provisions that the president used to extend the chief justice's term would be challenged. "We wish to emphasise that the challenge is not directed at the current chief justice, or at his competence, integrity or other attributes. The case raises fundamentally important constitutional issues involving among others, the independence of the judiciary. "Clarity on these issues is of vital importance to the administration of justice in South Africa and our challenge is therefore brought with the broader public interest in mind," Keightley said.

Source: Mail & Guardian

Wednesday, August 19, 2009

Appointment of judicial officers

In terms of Section 176 (3) of the Constitution of South Africa: "The President as head of the national executive, after consulting the Judicial Service Commission and the leader of parties represented in the National Assembly, appoints the Chief Justice and the Deputy Chief Justice and, after consulting the Judicial Service Commission, appoints the President and Deputy President of the Supreme Court of Appeal."
[Sub-s. (3) substituted by s. 13 of the Constitution Sixth Amendment Act of 2001.]

A CV of Deputy Chief Justice Dikgang Moseneke can be found here.

A CV of Justice Sandile Ngcobo can be found here.

Source: the Constitutional Court of South Africa

Tuesday, August 18, 2009

Opposition backs Moseneke for chief justice

Three opposition parties on Tuesday urged President Jacob Zuma to reconsider his nomination for chief justice and give the job to Deputy Chief Justice Dikgang Moseneke.

In a joint statement, the Democratic Alliance, the Congress of the People and the Independent Democrats said Moseneke was "a more suitable candidate" and a "wise and humble jurist" with a fierce commitment to the independence of the judiciary.

They said Moseneke had effectively been an understudy for the post for the past four years. "He has worked closely with Chief Justice Pius Langa, gaining even deeper experience in relation to the Constitution that Moseneke himself was involved in drafting. Justice Moseneke has been groomed for the position of chief justice for four years and has all the experience required for it. He is a judge of impeccable standing, and has a proven track record of fierce commitment to judicial independence."

Source: Mail & Guardian

Friday, November 23, 2007

Report: Mbeki gets pay rise

The South African Parliament officially closed for the year on Thursday with MPs voting for a 7,6% salary increase for President Thabo Mbeki, to R1,27-million a year, backdated to April 1. It was far short of the nearly 60% increase from R1,18-million to R1,89-million recommended by the independent Moseneke Commission in its review of salary packages for public office-bearers.

Source: Mail & Guardian

Monday, September 17, 2007

Joburg hosts magistrates' summit

Speaking at the opening of a two-day Magistrates' Conference in Johannesburg deputy chief justice Dikgang Moseneke said that, "The biggest threat to the judiciary's independence could come from within the judiciary itself by those who failed to uphold ethics". At the conference, Moseneke, as well as Constitutional Court judge Albie Sachs, called on those within the judiciary to uphold ethics. The conference, which was the the first of its kind, looked at issues pertaining to magistrates, ranging from their appointments, to accountability, training requirements, ethics, institutional governance and enhancing the efficiency of the lower courts.

Moseneke said that judges should always, and not only in the discharge of official duties, act honourably and in a manner befitting judicial office. "That implies that all activities of a judge must be compatible with the status of a judicial office...a judge must comply with the law of the land," he said. While not pointing out any specific members of the judiciary, Moseneke said that "with deep sadness we are constrained to admit that a few judicial officers may have attracted the impression that complying with the law is dispensable. It is, however, not right to imagine that one or perhaps two swallows make a summer. The overwhelming majority of judicial officers meticulously honour their oath to office."

Minister for Justice Brigitte Mabandla said that the conference needed to explore whether the magistracy in substance and form was truly transformed from what it was during apartheid. "We need to ask whether there has been a change of mindset within society and the magistracy itself. We need to ask whether in reality the values enshrined in our constitution guide magistrates in their daily work," she noted. "Judicial decisions have a profound impact on society. Decisions that are seen as unfair by citizens have a cumulative impact on making society loathe, fear, distrust the bench as it was the case in the past," Mabandla said.

"In the new South Africa people look to the bench to give meaning to the Constitution. The judiciary, broadly speaking, and the magistracy in particular because it is the coalface of the delivery of justice, have the opportunity to entrench progressive values of good citizenship," commented the Minister.

Source: Polity

Monday, August 8, 2005

Pay hike for SA politicos

The Independent Commission for the Remuneration of Public Office Bearers has recommended that a hike of 5.75% be provided to South African elected politicians - including members of parliament and members of provincial legislatures and judges.

The commission - headed by Judge Dikgang Moseneke, who was recently appointed Deputy Chief Justice - said: "Having duly consulted as required by law, and having considered all relevant factors ...as well as other factors prescribed by applicable legislation, the commission recommends that the salaries, benefits and allowances of public office bearers be increased by 5,75% for the 2005/06 financial year, with effect from April 1 2005." The recommendations are made to President Thabo Mbeki in terms of the constitution.

The commission noted that it had considered annual and month-on-month CPIX figures. (Month-on-month CPIX for May 2005 was 3.9%).

Source: News 24

Friday, May 27, 2005

Most judges 'support change'

Moseneke, appearing before the commission after being nominated by President Thabo Mbeki to the post of deputy chief justice, took the opportunity to say that judges needed to be trusted. "If we appoint people as judges we should trust them" - otherwise it would create unnecessary levels of tension.

Moseneke, who ironically first went to work for an Afrikaner law firm, was later one of the founder members of the Black Lawyers Association. He was also a member of the technical committee which helped draft South Africa's interim constitution. "(It was) one of my privileges... quite a special moment... a fundamental vindication of what one stood for, what one was striving for."

Moseneke said he was "minding my own business" when he was approached by Pallo Jordan on behalf of former president Nelson Mandela to help transform the business sector. He helped restructure state enterprise Telkom before being head-hunted to lead pioneering black empowerment group Nail (New Africa Investment Limited).

When Mbeki called him to offer the position of deputy chief justice, Moseneke did not hesitate in accepting.

Source: News 24.com

Saturday, April 30, 2005

Langa is to be chief justice

Justice Pius Langa is to become the country's new chief justice.

He will replace Arthur Chaskalson who is to retire. Langa, currently Chaskalson's deputy, will take up his post on June 1, President Thabo Mbeki's office said in a statement on Saturday.

Mbeki nominated current Constitutional Court justice Dikgang Moseneke as Langa's deputy. The president is required by law to consult parties in the National Assembly as well as the Judicial Service Commission before appointing a deputy.

Source: News 24

Tuesday, December 3, 2002

Moseneke appointed new Constitutional Court judge

President Thabo Mbeki has appointed Judge Dikgang Moseneke to the Constitutional Court with immediate effect.

Judge Moseneke is set to replace Judge Johan Kriegler who retired on Friday. Judge Kriegler was appointed to the Constitutional Court in 1994. President Mbeki said he was confident that Judge Moseneke would carry out his Constitutional Court functions with distinction.

Prior to his new appointment, Judge Moseneke was a judge at the Pretoria High Court. Three other judges were short listed for the post, Judge Ben du Plessis, Judge Kathy Satchwell and Judge Lewis Skweyiya.

Source: Polity

Saturday, June 2, 2001

Moseneke resigns from top posts

Nail CEO and acting chairman Dikgang Moseneke has resigned from all his positions at Nail, Metropolitan and Telkom to take up a position in the judiciary.

Media statements from the three companies announced on Friday evening that Advocate Moseneke will take up his new acting position in the judiciary at the end of July. No details about his new job were released.

Moseneke has been acting chairman and CEO of Nail, the chairman of the board of Metropolitan and chairman of Telkom. "I am also looking forward to the completion of the convergence of Metropolitan and New Africa Investments Limited (Nail), which will be a specific area of focus during the remainder of my time with both groups," Moseneke said.

The companies have not yet announced replacements for Moseneke.

Source: News 24

Tuesday, May 25, 1999

South Africa: the fraud of "black empowerment"

With less than two weeks before elections take place in South Africa, a share option scandal has broken out involving the country's biggest black-owned company, New African Investments Ltd (Nail), which has interests in financial services and the media.

The scandal has brought into sharp focus the African National Congress (ANC) government's policy of "black empowerment", which has enriched a tiny minority of black businessmen and government officials over the past five years.

Along with many companies in South Africa, Nail is in financial difficulties. Institutional shareholders objected when four company directors, who control almost all the voting shares, attempted to award themselves more than R130 million (£13 million) of share options in a subsidiary company. Two of the directors, Nthato Motlana, a Soweto doctor and one-time anti-apartheid activist, and Jonty Sandler, a white entrepreneur, were forced to resign. Motlana accused "white shareholders" of fomenting the revolt. Black financial commentators sprang to the directors' defence, arguing that lucrative option deals were normal in white businesses.

The two other directors involved, Dikgang Moseneke and Zwelakhe Sisulu, extricated themselves by making abject apologies. They have been discussing with financial institutions about how to turn around the company, which has a market capitalisation of R7 billion (£693 million). They both declared that severe cutbacks were necessary: "It will have to be surgery, not bandages and ointment."

The scandal follows the departure last month of Cyril Ramaphosa, Nail's deputy chairman, who was forced to resign by fellow directors for reasons not yet explained. Ramaphosa was the founder and former leader of the National Union of Mineworkers and general secretary of the ANC, who negotiated the end of white minority rule on its behalf. Today, he is one of the country's foremost super-rich black businessmen and is chairman of Anglo-American and South African Breweries.

On coming to power in 1994, the ANC government abandoned the "socialist" rhetoric it had used to mobilise the South African masses against apartheid. Instead, it insisted that "political liberation" should be followed by "economic liberation", i.e., that blacks should benefit from "affirmative action" in employment, government contracts and privatisations. The government programme of "black empowerment" was aimed at facilitating the "creation of large black-owned businesses". Hundreds of new companies have been launched in the past five years.

At least nine black-controlled investment consortia, or black empowerment groups, have been established. They have gained a stake in several of South Africa's biggest corporations: South African Breweries, Times Media, PO Holdings (information technology) and Metropolitan Life (insurance). Black boardroom involvement is a virtual necessity for bidding on big government contracts.

The government also recently passed quota-based affirmative action legislation in the awarding of government contracts, licenses and privatisation schemes. Companies deemed to have a substantial black ownership are awarded a 15 percent price advantage when bidding for public contracts. A condition for the new license to be issued in July to a cellular telephone company is that a black empowerment group must maintain a shareholding in the company making the bid.

Several local authorities are organising private sector partnerships with international companies like Saur International of France and Biwater of the UK, to help run water, sewage and other services. This means that black empowerment groups will be participating in the commercial supply of water in the townships, under conditions where many consumers cannot afford to pay water bills and are returning to traditional sources of water. The national transport department is also drawing up plans to bring private companies in to run the municipal airport and bus services.

In September 1995 only 1 percent of the market capitalisation on the Johannesburg Stock Exchange was under black control. Today, the figure has risen to 16.3 percent. Last year, black companies made 130 major investments worth R21 billion (£2.1 billion) compared with R5 billion (£0.5 billion) in 1997 and R1.6 billion (£0.16 billion) in 1996. A new generation of black tycoons has been created, including Ramaphosa, Moseneke and Sisulu, Nail's directors.

This has the backing of the most farsighted representatives of big business. In a Financial Times review of the book Empowered but not yet enriched Philip Gawith wrote of the importance of having more "comrades in business". "When the bright young blacks have turned their backs on politics and are intent instead on making a fortune, that will be the signal that South Africa has grown up," Gawith writes.

Harry Oppenheimer, a major shareholder in Anglo-American, a mining company that dominates the South African economy, said recently, "It was vital to make it possible for black people to control some of the big companies in South Africa. It was the right thing to do—part of a necessary response to the efforts for peace made by Mandela and his colleagues. You felt business had to match their efforts.... We owe an immense amount to Mandela. If it had not been for him, we would not have had the peaceful transition."

Anglo-American organised the finance for a spin-off company, Johnnies Industrial Corporation (Johnnic). The National Empowerment Consortium (NEC) purchased it, with Ramaphosa as chairman. Some companies operate as joint ventures with white businesses. Others fulfil government requirements by appointing one or two blacks to the board, allotting a slice of equity to a fledgling empowerment group and appointing a few black managers.

Global crisis upsets black empowerment

Few black South Africans have money of their own to buy into such equity, so almost every empowerment deal has been built on debt. The banks made arrangements for these "capitalists without capital" by setting up a "Special Purpose Vehicle" (SPV) and issuing shares with a life of three to five years. The shares are pledged as security for the loans used to buy them. This means that the SPVs depend for their success on continually rising share prices and moderate interest rates. In the context of the present economic instability, the banks are the real beneficiaries of black empowerment.

The economic outlook for South Africa is bleak. The economy has been hit by a collapse in the world price of gold, a commodity that plays a crucial role in the country. In 1980 the price of gold was $850 an ounce; last week it fell to a 20-year low of less than $280. Gold has traditionally been held as a hedge against inflation and a safe haven from turbulent stock markets. But the IMF is proposing to sell off 150 tonnes of gold, 10 percent of its gold reserves. The Bank of England has also announced plans to auction off half the UK gold reserves in July. Anglo-American, which controls the world's diamond industry and is the largest gold and platinum producer, is leaving the Johannesburg Stock Exchange next week and will move its primary listing to London.

Last October share prices collapsed on the Johannesburg Stock Exchange. The JSE's all-share index fell by 40 percent from its high point only six month earlier. The banks and financial services index lost almost 60 percent in the same six-month period, threatening many black empowerment companies like Johnnic, where shares values have fallen by 50 percent. Funding arrangements for its black investors expire in less than a year. If the share price does not rise rapidly the lenders could reclaim their security and the empowered black owners would get nothing, wiping out black ownership on the JSE.

The ANC government has appointed Ramaphosa to head a newly appointed commission to look into ways of "putting the movement on more solid foundations". One proposal is for more active participation by black-owned companies in the mining industry. At present, about two-thirds of mineral rights are privately owned and one third belong to the state. The government is planning to vest all mineral rights in the state so that black-owned companies can be given access to South Africa's plentiful minerals. Deep gold mines will not be affected by the plans because they require extensive investment in capital equipment beyond the means of small black-owned companies.

Anglogold, the world's largest mining company, has announced it is shedding its high cost operations to focus on its core assets. A year ago it sold off seven loss-making shafts from the Vaal Reefs gold mine to African Rainbow Minerals (ARM), a small black empowerment company. Last week ARM bought another six shafts. Other mineral reserves, like scattered deposits of shallow coal, are also being transferred to small black-owned companies. The only way these companies can survive on the world market is by increasing the exploitation of the predominantly black labour force. The massive speed-up will have terrible consequences for workers in an industry that already has one of the highest accident rates in the world.

The ANC and the "fat cats"

The ANC election manifesto calls for "A better life for business people", stating: "The ANC recognises that South Africa's business people are critical partners in the development of our country." The manifesto cites one of the achievements of the past five years as "the removal of apartheid barriers hampering economic growth and development and the introduction of better conditions for investment." Another is the creation of "conditions for the participation of black people and women in the economy as entrepreneurs and owners of wealth and the encouragement and growth of small and medium business."

Peter Vundla, an advisor to Thabo Mbeki, who is set to succeed Nelson Mandela as South African president, recently told Victor Mallet of the Financial Times that he has "no problem with fat cats".

Government claims that its policy of black empowerment provides an escape route from the squalor and misery of the townships are completely hollow. This programme is used to divert attention from the desperate problems confronting the working class, by transforming every social issue into a question of race. It enables a narrow layer of super-rich black entrepreneurs to enter South Africa's capitalist class, whilst the vast majority of the population remain deprived of their rights to education, a healthy life and employment.

Mbeki and the ANC are committed to implementing IMF austerity polices. In an attempt to attract greater investment from the transnational corporations they are offering a partnership with black consortia as a means of controlling the working class and imposing the necessary draconian conditions.

Source: World Socialist Web Site