TRC Final Report

Volume 4

Chapter 2

Subsection 5

■ COSTS AND BENEFITS OF APARTHEID

48 To understand the relationship between business and apartheid, it is helpful to explore the ways in which apartheid policies aided or hindered business, and to outline the role that business played in influencing apartheid legislation.

49 Business was not a monolithic block and it can be argued that no single relationship existed between business and apartheid. It is, however, also true that overwhelming economic power resided in a few major business groupings with huge bargaining power vis-à-vis the state. This power could have been more aggressively used to promote reform. The state, on the other hand, actively repressed black business, favoured Afrikaner capital (through access to contracts, licences, subsidies and so on), while apartheid labour policies benefited industries dependent on low-cost labour (mining and agriculture).

50 It could also be argued that apartheid was in some ways harmful to businesses with greater skill requirements. Most of the submissions pointed out that state-business relationships differed between economic sectors, according to size of firm and along language and ethnic lines. It is necessary, therefore, to adopt a differentiated approach, at least as regards the early apartheid period.

Afrikaner business

51 The English business sector drew attention to the special relationship between Afrikaner business and the National Party (NP) government. Anglo-American said that NP hostility prejudiced its ability to conduct business. Its bid for Samancor, for example, was nullified on political grounds.

52 SAB also complained of NP bias, which prejudiced its business both in the retail and liquor sector and in the wine and spirits industries:

53 The life assurer SANLAM accepted that its Afrikaans origins “could have contributed to and facilitated cordial business relationships with government, especially after the NP came to power in 1948 ...” saying that, “successful marketing implies sound relationships with decision-makers.” However, apart from having easier access to government, SANLAM said, “it did not enjoy preferred status with the NP.” SANLAM claimed that it became the first large company to redress economic imbalances when it sold the life assurer Metropolitan Life to black investors in 1993. SANLAM also created a development fund to contribute to empowerment.

54 Professor Sampie Terreblanche agreed that the NP favoured Afrikaans business, for example through fishing quotas, mining and liquor concessions, government contracts and “all kinds of inside information”. In later years, however, this policy of Afrikaner favouritism was replaced with a policy of patronage towards those businesses that co-operated in the military industrial complex. In return for support, former State President PW Botha granted reforms proposed by the Wiehahn and Riekert Commissions, which allowed for significant changes to apartheid labour law and influx control. Terreblanche argues, however, that Mr Botha’s intention at all times “was to entrench and perpetuate white control”.

55 The ANC submission identified the “spectacular economic growth” of Afrikaner controlled companies like SANLAM and Volkskas, which were “especially favoured by the apartheid regime”. SANLAM’s assets rose from R30 million in 1948 to R3.1 billion in 1981, while companies over which it exercised effective control had assets worth R19.3 billion. The submission noted that Rembrandt (together with SANLAM and Volkskas) “were key players in the Afrikaner Broederbond” and “close confidants and advisers of political leaders of the apartheid state”.

56 The AHI was far more self-critical than other representative business organisations. It admitted that it had “committed major mistakes” in its support for separate development, its lack of moral and economic objections to apartheid, its insensitivity to issues involving human rights and its acceptance of the absence of a proper labour relations law. It accepted moral responsibility for this. It noted, however that:

57 COSATU expressed a similar view to that of Terreblanche, contending that, while the NP government explicitly set out to nurture Afrikaner business, its overall policy climate created the conditions for the rapid accumulation of capital by white capitalists in all sectors of the economy.

Black business

58 As outlined in the submission by the National African Federated Chambers of Commerce (NAFCOC), the apartheid state systematically undermined the black business sector. This was done by means of discriminatory legislation, the application of the Group Areas Act, the allocation of licences and in other ways.

59 Such actions not only stifled the black business sector, but also provided the space for white business to take advantage of the opportunities denied to black business. The Group Areas Act prevented black businesses from operating in white areas and vice versa. Those black business people who obtained business licenses in designated areas (for petrol stations, liquor outlets and so on) benefited in the limited sense that competitive pressures were artificially reduced by apartheid. While this provided a measure of protection for these (few) entrepreneurs, such protection was not always forthcoming. According to a submission from Indian-owned Avalon Cinemas, although they were prevented from operating in white areas, white-owned Ster Kinekor succeeded in its bid to operate in Indian Areas.

60 According to the submission by the Islamic Chamber of Commerce and Industry, there were also members of the black business community who “collaborated” with the apartheid regime, were involved in sanctions-busting and, “together with corrupt politicians in the Tricameral government were engaged in procuring business contracts land, houses etc. for their own benefit to the exclusion of those rightfully deserving of these assets”.

61 Despite such cases, it is clear that the overall impact of apartheid was to undermine black business systematically and perniciously. Furthermore, by limiting the development of black managerial expertise, the acquisition of business skills by black managers was prejudiced (see BMF submission).