Paying for Apartheid

Paying for Apartheid

Two major lawsuits–filed in the United States against multinational corporations including GM, IBM and Citigroup for aiding and abetting apartheid–are at a critical juncture.


Two major lawsuits–filed in the United States against multinational corporations including GM, IBM and Citigroup for aiding and abetting apartheid–are at a critical juncture. Their outcomes could set legal standards by which corporations are held accountable for cooperating with regimes that violate human rights. This possibility has sent shock waves through international corporate boardrooms, which also fear court orders to release files that would expose apartheid-era activities.

The plaintiffs include a diversity of apartheid victims, including prominent author Dennis Brutus, who was shot in the back and imprisoned by the South African security police; Sigqibo Mpendulo, whose teenage sons were murdered in their living room by security police; and Dorothy Molefi, the mother of Hector Peterson, who was shot to death by police when he was 13 at the start of the Soweto uprising of 1976. The photo of his limp body in the arms of a friend has become an iconic image of the victims.

Ntombi Mosikare, who works for the Khulumani Support Group, a South African organization that is a lead plaintiff and represents apartheid victims, said, “Those that helped the apartheid government do its dirty work should be made to pay.”

US attorneys Diane Sammons and Ed Fagan were the first to file. Their suit includes employment discrimination claims and asks for unspecified monetary relief. Currently there are eight lead plaintiffs in the class-action suit, which could expand to millions of plaintiffs. Michael Hausfeld and Agnieszka Fryszman filed their lawsuit five months later, in November. It seeks unspecified individual damages on behalf of Khulumani itself and ninety-two of the 33,000 victims represented by Khulumani. Both suits include South African attorneys.

On May 19, a federal judge, John Sprizzo, of US District Court, Southern District of New York, a Reagan appointee, will for the first time make substantive rulings on the initial lawsuit (combined with a similar suit filed by Connecticut lawyers). On May 28, a federal judicial panel is expected to decide whether all the lawsuits should be consolidated.

The approximately thirty US and European defendants–some are in both lawsuits–include banks (e.g., Citigroup, JP Morgan Chase, UBS AG, Credit Suisse, Deutsche Bank, Barclays Bank), oil companies (Shell and ExxonMobil), vehicle manufacturers (Ford, DaimlerChrysler, GM) and technology companies (IBM and Unisys). The complaints claim that the banks provided the funding that kept the apartheid government in power; that without oil, the police and military could not have functioned and the economy would have collapsed; that vehicle manufacturers supplied military vehicles and that technology companies supplied the resources for the national identity system. Companies were targeted not simply for doing business with South Africa but for allegedly supporting the apartheid system and profiting from crimes against humanity.

Business heavyweights, including the US Chamber of Commerce, the National Association of Manufacturers and the National Foreign Trade Council, have backed up the corporations, criticizing the law on which the reparations suits are based. Known as the Alien Tort Claims Act, which dates from 1789, it grants US courts jurisdiction over certain violations of international law. This act formed the basis of Holocaust lawsuits, which were successfully argued by some of the lead lawyers in the South African cases.

“Business was central to the economy that sustained the South African state during the apartheid years,” concluded the South African Truth and Reconciliation Commission, which investigated the crimes of apartheid. One witness, Craig Williamson, a self-confessed bomb killer and undercover agent, testified, “Our weapons, ammunition, uniforms, vehicles, radios and other equipment were all developed and provided by industry. Our finances and banking were done by bankers who even gave us covert credit cards for covert operations.”

IBM conceded that its equipment may have been used for repressive purposes, but also noted that “it’s not really our policy to tell our customers how to conduct themselves,” according to a 1985 Washington Post article.

While most of the corporations refused to comment on the lawsuits, Shell South Africa said it “vigorously denies any suggestion that the company was supportive of the apartheid regime in South Africa. Shell remained in South Africa during the apartheid era because we felt that to leave was not the best way to bring about change and development.” Similarly, a spokesperson for ExxonMobil commented that it “condemns the violation of human rights in any form, including the apartheid policies of the former South African government.”

Not surprisingly, governments are joining the corporate side. In April, Switzerland, which was a key supporter of South Africa during apartheid, shut down public access to archives documenting corporate links to the apartheid government. A spokesperson for the Swiss finance ministry said that since other countries were not offering comparable access, “opening our files would be a disadvantage to Swiss companies.”

Surprisingly, South African President Thabo Mbeki has criticized the lawsuits, saying, “We consider it completely unacceptable that matters that are central to the future of our country should be adjudicated in foreign courts.” His minister of trade and industry went so far as to say that the government would not allow any foreign judgments to be enforced in South Africa.

US Secretary of Commerce Donald Evans, describing the lawsuits as an “unhelpful” development, urged the South African government to make clear that it does not support them.

The battle over corporate responsibility for international human rights violations is only beginning. One way to avoid long court struggles was suggested by former Carter and Clinton administration official Stuart Eizenstat, who has helped settle Holocaust claims. In 1997 a convention established standards to combat international bribery, to which more than thirty countries agreed. Eizenstat proposes that a similar international convention establish guidelines on corporate responsibility for human rights violations. Corporations could sign on to the agreement and abide by voluntary monitoring. If lawsuits were filed, the standards could provide guidelines for the courts.

For some South Africans, a gnawing feeling persists that the injustices of apartheid have not been laid to rest. In reply, Archbishop Desmond Tutu, who was chairman of the Truth and Reconciliation Commission, said, “There has been considerable generosity on the part of the victims. It should have been answered by those who benefited from apartheid, but the beneficiaries have engaged in sophistry.” While emphasizing that the victims have the right to compensation, the archbishop added that it would be better if the issues were settled outside of court.

Currently, Anglican Archbishop Njongonkulu Ndungane is trying to negotiate a settlement in South Africa. Archbishop Tutu says if the litigation continues, he hopes it can be decided expeditiously. Otherwise “it will keep us emotionally at a point we have gone past in our journey to reconciliation.”

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Katrina vanden Heuvel
Editorial Director and Publisher, The Nation

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