Landmark Ruling Allows Apartheid Victims to Sue Multinationals: In One of the Most Significant Legal Rulings in the Post-Apartheid History of South Africa, Victims of the Apartheid Regime Have Finally Received the Green Light from a US Judge to Sue Multinational Corporations That Knowingly Aided and Abetted the Apartheid Regime. the Implications of This Ruling Are Colossal, Not Only for Africa but Globally. Khadija Sharife Reports

By Sharife, Khadija | African Business, June 2009 | Go to article overview

Landmark Ruling Allows Apartheid Victims to Sue Multinationals: In One of the Most Significant Legal Rulings in the Post-Apartheid History of South Africa, Victims of the Apartheid Regime Have Finally Received the Green Light from a US Judge to Sue Multinational Corporations That Knowingly Aided and Abetted the Apartheid Regime. the Implications of This Ruling Are Colossal, Not Only for Africa but Globally. Khadija Sharife Reports


Sharife, Khadija, African Business


In a landmark 144-page judgment last April, Southern District of New York Judge Shira Scheindlin found that some of the world's largest multinational corporations were engaged in aiding and abetting apartheid, torture, extrajudicial killing and other crimes. They could, therefore, be held accountable before a US court.

Judge John E Sprizzo, who stated that the class action suits "could have serious consequences for US foreign relations and US commercial trade", had previously dismissed the lawsuits, but the class action suits were later reinstated by the 2nd US Circuit Court of Appeals in 2007. This was done over the objections of the US State Department and the South African government, who granted a blanket amnesty to all corporations active during the apartheid era.

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The lawsuits Ntsebeza v. Daimler Chrysler Corp and Khulumani v. Barclay National Bank Ltd were later reassigned to Scheindlin. Scheindlin's April ruling also crucially stated: "Under the Rome Statute--and under customary international law-there is no difference between amorality and immorality. One who substantially assists a violator of the law of nations is equally liable if desiring the crime to occur or knowing it will occur and simply does not care."

The plaintiffs' attorney, Michael Hausfeld, has called the judge's landmark decision "a major advancement in international human rights law".

Crimes against humanity

Though 15 years have passed since South Africa's first democratic elections in 1994, the economic system sustaining the apartheid regime has yet to be interrogated in a court of law. Apartheid--meaning 'separateness' in Afrikaans--is often simplistically reduced to a state of racial segregation, minimising the economic structure underpinning the power of the regime. The foundation of this structure--legalised in 1948--was described by South Africa's notorious former Prime Minister John Vorster as: "Each bank loan, each new investment is another brick in the wall of our continued existence".

The processes of apartheid--declared a crime against humanity by the UN in the 1960s--witnessed close collaboration between foreign corporations in the mining, banking, technology, automotive and energy sectors. Corporations such as General Motors, Fujitsu, Barclays, IBM, Daimler, Rheinmetall, UBS and Ford (among others) are accused of intentionally financing, aiding and abetting the regime in exchange for access to natural resources such as gold and diamonds, and cheap labour. The reasoning--business as usual--was quickly justified by corporations such as Ford, who at the time stated: "Why are we in South Africa? We would not be there were there not an opportunity to make a profit."

One example of this alliance between big business and the apartheid state was the Defense Advisory Board (DAB), created in 1980 by Vorster's successor, the brutal P W Botha, for the purpose of devising 'security' policies related to various industries. Botha appointed corporate representatives from Barclays, Anglo American and other corporations to the board.

In his statement to the House of Assembly, Botha commented: "We have obtained some of the top business leaders to serve on the DAB in order to advise me from the inside ... I want to unite the business leaders of South Africa, representative as they are, behind the South African Defence Force. I think I have succeeded in doing so."

The loyalty of foreign corporations investing in South Africa to the apartheid state continued in the banking sector until as late as 1989/1990, when $8bn in outstanding foreign loans was rescheduled on easy terms. The period from 1984 onwards saw a 400% increase in foreign loans, with 260 banks rescheduling the 1985 government-imposed debt standstill on $13bn (of $23.5bn) in outstanding debt. The deal 'hammered behind a veil of secrecy' was headlined by a local newspaper as 'South Africa Makes a Deal .

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Landmark Ruling Allows Apartheid Victims to Sue Multinationals: In One of the Most Significant Legal Rulings in the Post-Apartheid History of South Africa, Victims of the Apartheid Regime Have Finally Received the Green Light from a US Judge to Sue Multinational Corporations That Knowingly Aided and Abetted the Apartheid Regime. the Implications of This Ruling Are Colossal, Not Only for Africa but Globally. Khadija Sharife Reports
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