RYK VAN NIEKERK: Lord Peter Hain now joins us, he’s the South African-born British politician, a previous anti-apartheid activist and a visiting professor at the Wits Business School. He’s also one of the most vocal local and international critics of the President Jacob Zuma, corruption and the looting of state coffers. He is currently in South Africa, Peter welcome to the show, the ANC recalled Jacob Zuma on Tuesday, it has been expected since Cyril Ramaphosa became the ANC president but it’s probably one of the most significant events in our short democratic history.
PETER HAIN: Yes, it is and as a former South African myself, having been brought up in Pretoria, born to South African parents, who were jailed and issued with banning orders for their anti-apartheid activism in the 1960s and then forced into exile with their four children, of whom I am the eldest. I feel very strongly that what has been going on in South Africa in the last ten years in particular under President Zuma has betrayed the freedom struggle for which my parents sacrificed a great deal, other than including, of course, Nelson Mandela’s sacrifice, which was much, much more. So whatever happens with this current situation and it’s obviously in the national interest of South Africa that it’s resolved quickly and the country can have a properly functioning government and deal with all the economic and other problems that we face in South Africa. I hope that can be resolved quickly but my main concern is that the country gets back onto the path that Nelson Mandela, when he was president and leader of the ANC, set it on, which is respect for fundamental values of justice and equality and decent integrity, instead of the rampant corruption and cronyism, which has so badly infected the whole of the South African public and government life.
RYK VAN NIEKERK: Do you think this can be the turning point?
PETER HAIN: Well, I hope so because what is very clear to me as somebody’s parents who were active alongside the ANC and the anti-apartheid struggle back in Pretoria in the 1960s, I have had close links with the ANC for decades now, both under apartheid, in the anti-apartheid movement, of which I was a leader in Britain, and subsequently and still do. So I think if the ANC doesn’t change and make this change decisively then it’s going to die and the country is going to continue to decline when it’s got so much potential. As you mentioned, I’m a visiting professor at Wits Business School and the students I teach are studying MBA courses and they are some of the brightest people I have come across anywhere in the world. The country has got such a lot going for it but it’s being dragged down by basically a corrupt presidency and that corruption and cronyism is damaging the whole fabric of the society.
Cyril Ramaphosa – a skilled negotiator
RYK VAN NIEKERK: Do you know Cyril Ramaphosa?
PETER HAIN: I do.
RYK VAN NIEKERK: What do you think, do you think he’s the man to turn it around?
PETER HAIN: He’s been the man who’s been chosen by the ANC and I think that’s a good thing. Remember, he’s a very skilled negotiator, he was a mineworkers’ leader, he negotiated the new constitution with the former representatives of the apartheid government, he’s also experienced in the business world, as well as being popular in the country. I think it’s very difficult to get a combination of former trade union leader, former business leader, as well as a capable and highly respected government figure, to find somebody of equivalent stature as your elected president, as that seems to be where it’s going and I certainly hope for the sake of South Africa, as well as in the ANC, that this happens sooner rather than later.
RYK VAN NIEKERK: We’ve seen significant optimism in South Africa since his election as ANC president, investor confidence, business confidence, consumer confidence; it almost seems that it’s maybe overdone. Can one person make such a big difference in the short term?
PETER HAIN: The president of any country, including South Africa, can make an enormous difference, just like President Zuma made an enormous difference in a very damaging negative way. Cyril Ramaphosa could when he becomes president make a big difference but people shouldn’t have any illusions about the tasks facing him, to clean up the government, to clean up the administration, to clean out the cronies and get competent people into running Eskom, running SAA, running Transnet, as well as the revenue agencies, Sars and the other state agencies and enterprises, and just basic functioning of local city and municipal government. It is a formidable challenge at a time when unemployment is high, economic growth has been low, the economy has been downgraded in its international credit status to near junk level and if this transformation doesn’t happen smoothly it could still be downgraded. So there’s a formidable set of challenges and then the crippling legacy of apartheid, the apartheid regime bequeathed massive poverty, a huge deficit of skills in the black majority population, which is a deliberate instrument of the apartheid policy and so damaging in the modern world where skills are everything. With China and India producing over seven million new university graduates a year you need to have skills to succeed as a modern economy. The legacy of apartheid was to deliberately deprive the majority of skills, so that legacy, as well as the housing problems and the lack of water and electricity, and in Cape Town’s case the water crisis, which is a monumental failure of the Western Cape government, the Cape Town city government, as well as the national government of President Zuma, an absolutely monumental and catastrophic failure of governance to foresee what everybody knew was going to happen. These problems are formidable, so Cyril Ramaphosa will not be able to turn everything around overnight or even in months or over a few years but what he can do is put the country back on a path that Mandela began, having rescued South Africa from the depravity of apartheid, and put it back on a path, which I think has got future success because I think there’s a lot in the country, there’s resilience, there’s a lot of potential in the country and there’s a lot of other countries that have been decimated by corrupt government such as Zimbabwe that don’t have going for them.
RYK VAN NIEKERK: But the structural problems in our economy are dire, we have inequality, poverty, unemployment and those are long-term goals to achieve and that won’t be solved overnight. Yet we are 20 years into democracy and I think many people would have wanted to see more having been done in those years. Consequently there is impatience within South Africans, you add to that the Bell Pottinger narrative as well, how do you see the social dynamics in South Africa changing under Cyril Ramaphosa?
PETER HAIN: I think it’s important to be absolutely straight up with what has been achieved by the ANC, there’s a tendency now, especially amongst the opposition, to basically rubbish everything the ANC has done but the ANC did rescue the country from apartheid and it rescued it from civil war and the collapsing economy in the late 1980s, which is essentially the reason why the apartheid government changed because things were going down the hill. The ANC built millions of houses, it brought water and electricity to millions of people, the number of people attending school has doubled, there are 400 000 extra university graduates, most of them black, there are a lot of achievements that the ANC brought to South Africa. But sadly that has been betrayed under President Zuma and the ANC will face the consequences, it already has at the polling booths and in the elections for city administrations it has already faced those consequences. So I don’t think everything is bad, I think there’s still the potential to turn this around with decent leadership and leadership that abolishes cronyism and appoints people to positions on merit, rather than because of who you know or whose pocket you can stuff with thousands of rands. I think if you can do that and you can clean up the government and that’s a tall order because corruption is like a cancer in the body, it goes everywhere, then I think there’s a lot of hope still.
Exposing corruption and state capture
RYK VAN NIEKERK: Talking about corruption, you have been quite spectacular in the way you put the matter on the international agenda, especially during your speech last year in the House of Lords, and you’ve also handed over a dossier with proof of corruption and state capture to UK and US authorities, that is while in South Africa not a lot has happened. Do you perhaps know what the status is of these UK or British and American investigations are?
PETER HAIN: First of all I was asked to do this by an ANC stalwart totally opposed to corruption and a number of independent and very, very brave whistleblowers in the South African system of various descriptions, who I am obviously not going to name or describe for their own safety, they furnished me with the evidence. I don’t just research this evidence, I’m provided with the bullets so that I can fire them. As a result of which banks like HSBC are being investigated for contravening honest banking regulations and that investigation is being proceeded with now, and the whistleblower concerned has been in touch through me to the Financial Conduct Authority to help with that investigation and clarify some of the evidence that I handed over. Hogan Lovells is the latest international law firm to be investigated by the Solicitors Regulation Authority after I referred them to that body. They deny wrongdoing but they clearly whitewashed their investigation of corruption in the South African Revenue Service, there’s no doubt about that, and other evidence produced by the Forensics For Justice leader, Paul O’Sullivan, is even more damaging and damning. So these investigations are going on and the message for me to the KPMG, McKinsey, Hogan Lovells, the SAP, the HSBC, Standard Charter, Bank of Baroda and the rest of them, and probably others, who have got mixed up feeding at the trough of corruption and got hefty fees for it, is do not touch it with a barge pole because as we found with Bell Pottinger, the public affairs agency that ran that viciously racist and pernicious campaign of propaganda mainly through social media and they went bankrupt as a result. Not because of global operations but because of what happened here in South Africa and what they did. The reputation damage to these institutions is global, as well as South African and basically everybody has got to steer clear of doing any work with anybody who is corrupt. That’s got to be the message to international corporates and I think many of them now understand that, even if, sadly, they didn’t before.
RYK VAN NIEKERK: But has the reaction from the private sector internationally been aggressive enough against these companies?
PETER HAIN: They’ve undoubtedly had damage to their business, they have lost accounts, all of them, they have told me that because they have all come to see me and they are all very worried about it. So I think international business has got to understand that there are reputational consequences in today’s world if you do feed at the trough of corruption in South Africa or, for that matter, elsewhere. You get exposed and very brave investigative journalists have done that, as well as organisations like Corruption Watch, Forensics For Justice and amaBhungane with their investigative journalistic work, uncovering a lot of this as they have done so effectively and I think that’s why there’s change on the way in South Africa, however bumpy it is and however difficult it will be. It’s largely due to those civil society organisations, the media and brave whistleblowers who have been prepared to stand up against gangsterism, corruption and the complete betrayal of the values of the freedom struggle.
Wits panel discussion – money laundering and corruption
RYK VAN NIEKERK: You are hosting a panel discussion later this week on money laundering and corruption at Wits. You have a very esteemed panel, Pravin Gordhan, Ismail Momoniat, the deputy general of treasury, and Stefaans Brümmer from amaBhungane, and David Lewis of Corruption Watch. It’s going to be a fascinating debate and I will most definitely attend but in South Africa if talking and debating was an Olympic sport we would definitely take all the medals. Action is what we need.
PETER HAIN: I completely agree, which is why we have been drawing up ideas for action for the new South African government to implement and for others to take forward. There’s no point in just debating and there’s no point in shouting about it, we’ve got to see action but in the end that’s a matter for government, not for people like me. I was only asked to undertake a specific task, which I have done and that’s expose this in Britain and internationally in my position as a member of the House of Lords in the British Parliament. It’s really in the hands of South Africans to take this forward.
RYK VAN NIEKERK: That was Lord Hain, the South African-born British politician, anti-apartheid activist and a visiting professor at the Wits Business School.