The Business of Apartheid: The Role of Multinational Corporations and Banks under South Africa's Racist Regime Is Finally Coming to Light. Some Would Rather It Didn't. Bryan Rostron Reports from Cape Town. (Features)

By Rostron, Bryan | New Statesman (1996), August 12, 2002 | Go to article overview

The Business of Apartheid: The Role of Multinational Corporations and Banks under South Africa's Racist Regime Is Finally Coming to Light. Some Would Rather It Didn't. Bryan Rostron Reports from Cape Town. (Features)


Rostron, Bryan, New Statesman (1996)


"Some call me the devil," says Ed Fagan, delightedly. We are in a smart Cape Town waterfront hotel and Fagan, a consummate showman, is thoroughly enjoying himself as he details the multibillion-dollar class-action lawsuit he has launched against multinational corporations and banks, including Barclays Bank, accused of propping up apartheid. "I'm not the devil--but I can be," he says. "The devil's a guy who does a job and gets a bad rap."

Judging by the fury this brash New Yorker stirs up, some clearly feel he is far, far worse than Beelzebub. But then Ed Fagan is the lawyer who successfully forced reluctant Swiss banks and German companies to pay a staggering $6.75bn in two famous Holocaust class-action cases.

Now he noisily fronts the Apartheid Claims Task Force, which has filed a class-action suit at a New York court against a raft of British, American, Swiss, German and French companies, from oil to electronics firms, that Fagan claims sustained and profited from apartheid. Among them are major blue-chip players such as Credit Suisse, LTBS, Citicorp Inc (which owns Citibank), Morgan Guaranty, Deutsche Bank, DaimlerChrysler, Siemens and IBM. Other UK companies, including the information technology giant ICL, will soon join them in the dock.

The case is complex, and Fagan estimates that it may take anywhere between two and five years to resolve. But the accusation is simple. As he wrote to the chairman of Barclays late last month: "The financial institutions and industry groups that provided the funding and support for the apartheid system can and will be held accountable and liable for the profits earned because of their support of apartheid and for the related damages caused by or attributable to this support."

Encouraged by Fagan, South African lawyers setup a hotline for victims of apartheid and have already received more than 2,000 calls. The plaintiffs demanding reparations for complicity with human rights abuses range from Veronica Sobukwe, thewidow of Robert Sobukwe, founder of the Pan Africanist Congress, to Dorothy Molefi, the impoverished mother of Hector Pieterson, he student shot dead by police at the start of the 1976 Soweto riots.

The reactions, however, have been eye-opening. The Swiss fury was predictable. Fagan, ever the canny publicist, took Dorothy Molefi to Zurich to announce the case against Swiss banks. As a posse of furious hecklers howled them down, Fagan hustled away the clearly bemused Soweto matron, eagerly followed by rolling television cameras. But South Africa's ambassador to Switzerland rushed to distance the ANC from the case, announcing that her government "had never supported" such forms of action. Even more bizarrely, Penuell Maduna, the justice minister, who had been thoroughly briefed on the upcoming case, poured further official cold water on it by informing local German businessmen that it was absurdly simplistic to see all blacks here as victims of apartheid.

The South African government, desperate to attract foreign capital, is clearly embarrassed by the prospect of an apartheid reparations class action. Predictably, some critics, including spokesmen for Swiss banks, have taken the line that this case may discourage investment in South Africa and "other developing countries". Ironically, this echoes the justification for doing business here at the height of apartheid. After the Sharpeville massacre in 1960, for example, Chase Manhattan Bank lent South Africa $10m and joined a consortium to put up another $150m, its chairman, David Rockefeller, saying: "We believe it would endanger the free world if every large American bank deprived developing countries of the opportunity for economic growth."

But this case also probably stirs up a more fundamental anxiety on the part of the ANC government, for it threatens to open up old wounds that have been temporarily bandaged over by such notions as "the miracle revolution" and "the rainbow nation". …

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The Business of Apartheid: The Role of Multinational Corporations and Banks under South Africa's Racist Regime Is Finally Coming to Light. Some Would Rather It Didn't. Bryan Rostron Reports from Cape Town. (Features)
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