&#9;TRUTH AND RECONCILIATION COMMISSION 

&#9;BUSINESS SECTOR HEARINGS

DATE: &#9;11.11.97

HELD AT: &#9;JOHANNESBURG

DAY 1

______________________________________________________CHAIRPERSON: Let me try and be a little more cultured. Morning, Goeie More, Molueni, Dumela. It does make me feel like we are in church because most of the congregation is sitting at the back. Quite marvellous really, you don't actually think that you would like to move a little forward? Just in case that there might actually be more people coming it would actually be easier if we then filled. I wish all my congregations behaved in like you, I mean - 

&#9;Can we just observe a moments silence please. 

&#9;Thank you for - I welcome you most warmly to this special hearing on the business sector. 

&#9;I want to first of all to express appreciation to all of you who have sent in submissions and those who have accepted our invitation to make verbal presentation either in their own personal capacities or speaking on behalf of one or other of the various organisations that we have contacted or any of those who have contacted us. I also want to say how deeply grateful I am for the hard work of Dr Fazel Randera who is on my left who has had special responsibility for organising this particular hearing and also to my other colleagues and the TRC staff. We have received what we would consider an avalanche of submissions. I think 55 in all of different qualities and size and we've had some also coming from overseas. Certainly there are some glaring absences of those making submissions amongst organisations we have none representing white workers, none from the agricultural unions, and most glaring and blatant, the absence of any submissions from the oil industry, Shell, BP, Mobil, know that they were the targets of the Anti Apartheid Sanctions Movement and it is a huge gap in our deliberations and records to have nothing from that particular sector. Many would say that they were the most obvious supports of the apartheid dispensation, willingly or unwillingly and it would have helped us considerably to get as complete a picture as possible of the period under review. We have received a written submission from Armscor and I will refrain at the present time from the remarks that I have put down which were that if they do not come to make a verbal intervention we are not yet clear what is going to be taking place there. It does seem as if they may in fact be coming, so my remarks in regard to them will pend until their position is clear. The Carlton is an appropriate and hugely symbolic venue. Governments know the critical importance of business for the success or failure of a nation in the implementation of their own particular policies and so it was not surprising that Mr P W Botha should have sought to woo business in 1981 and in 1990 the Consultative Business Movement organised the get together between business and the ANC. So it is highly symbolic that we should be meeting here to consider the role of business in the whole matter of gross violations of human rights which the Commission is meant to be investigating. How even if they did not specifically research violations they might have helped to create or to sustain a climate where such violations could happen or alternatively what it might have been that they did to make clear their position as being opposed to what the five judges who made a submission to us said supporting a system which they described as in and of itself a gross violation of human rights. You will know that a few weeks ago the new Blue Train was inaugurated and one of the people on that train was saying that he said to his child, we are going on a very important train from Pretoria to Cape Town and the child piped up, is that the gravy train Dad?

&#9;But it did have its advantages in that on that trip from Pretoria to Cape Town I was able to have chats with business moguls and in a non-threatening atmosphere and it was I think useful for those of us who were able to chat together to make clear to some extent what we were hoping we would achieve by the hearings that are taking place over these two-three days. No one today admits to having supported apartheid. What we know is that business operated in a milieu, not obviously of their creation where they gained profits as a result of government policies. Cheap labour, the migratory labour system, the system of single sex hostels, the iniquitous pass laws and the severe influx measures that impacted negatively on black family life. The operation of job reservation and the colour bar. I know that some of those in the business sector tested against such unjust laws but many acqueiesd at best or positively co-operated. 

Now we've come together, not in order to pillory anybody. We have not come in order to ridicule anyone and in a sense we haven't even come to put in the dock. We want to hear your story. We are not so naive not to be aware that governments are powerful and often room to manoeuvre by business is restricted. You know that wonderful story Jesus tells of the publican and the Pharisee. The publican is vindicated, because all he says is I have sinned, I am a sinner. I acknowledge who I am rather than engaging in the self justification which the Pharisee indulged in. The world would and we would, the country would welcome such critical self scrutiny and we give thanks for some of this in some of the submissions and one wants just to refer to that from the Handelsinstituut because you see when you ask to be forgiven within the Christian dispensation, then the other, the wronged is under obligation to forgive. And what is this business of forgiveness? That is the acknowledgement that wrong was done and expression of contrition, sometimes they say remorse, the sorrow for the wrong done which triggers off the confession and then there is the forgiveness. But the process is not complete because there is the matter of restitution, of seeking to repair the wrong that accrues from whatever was done for which the person is contrite, and I myself have suggested to some of the business leaders that there are things like seeking to engage in training of those who have for so long been excluded from the possibilities of acquiring skills to enable them to engage in the business of, the competitive business of participation and that there ought to be, one hopes, real participation from people who in the past were excluded from the decision-making processes in business and obviously one is not talking about a tokenism here. And a genuine desire to advance people who have been held back, not because they didn't have gifts that would have enabled them if those gifts had been allowed to flourish and blossom to have those gifts develop and become skilled people and one wants to be able to see the business sector being more representative of the demography of the land and that there is a crucial role that you can and I hope will want to play in the process of reconciliation and some of you know are already participating in that, assisting deprived communities in all sorts of ways, building clinics, schools and we value all of that as contributing to the healing of our land. But I also am certain that we would have an incredible dramatic effect if in the course of these hearings representatives of the business giants were able to say we want to make substantial contributions to the President's Fund from which reparations, the recommendation of this Commission are going to be made who those whom the Commission designates victims, it will be wonderful to have someone here say we did this, we did that, we want to participate and we want to say here is something that will assist in pouring oil on wounds. Here is 10 million for the President's Fund. None of us could ever claim that money would ever be able to restore to people, loved ones but it will go a very very long way to saying that we have people who can afford it, say we want to be part of the feeling of this beautiful land whose future is clearly one that God wants to see being a scintillating one.

DR RANDERA: &#9;Let me introduce my colleagues. Over there is Russel Ally, he is a committee member of our Human Rights Violations Committee and he is based here in Gauteng and Mdu who is also a member of our Human Rights Violations Committee, he's based in our KZN, KwaZulu Natal and Freestate. Fazel Randera is a Commissioner and a member of the Human Rights Violations Committee. He is also our bossman here in the Gauteng office. We have to touch or forelock each time we see him. Alex Boraine who is the Deputy Chairperson of the Commission, he and I are based in Cape Town, Bongani Finca is a Commissioner and member of the Human Rights Violations Committee and he is in charge of our office and region in the Eastern Cape based in East London. Hlengiwa Mkhize a commissioner in the chair of the Reparations and Rehabilitation Committee and is based here in Gauteng. Now you want to -

Thank you Father, can I just introduce our researchers and our special guest for today, Dr Morlene Nkosi is now the MD of Morley Nkosi, the associates. He has studied in the United States of America in the pass with a Bsc in Economics at New York University an MBA from Rudgers and a Phd from the new school for social research. He was a former university professor and development consultant. Dr Nkosi will be summing up at the end of the day and we would like to warmly welcome him.

&#9;I also want to introduce Simon Segal who has been employed by the Commission as a researcher for the special hearing and Ms Tracy Steyn who is visiting us from the United States of America and has been assisting us as well as a researcher for this hearing. Thank you very much.

CHAIRPERSON: Right you are. Professor Sampie Terblanche. Dr Boraine will administer the oath. 

PROF TERBLANCHE: (sworn states)

DR BORAINE: Professor Terblanche, you may begin.

&#9;Thank you Dr Boraine, in the time at my disposal I will try to give a description of the economic, political and ideological framework in which the South African business sector has conducted it's business for the greater part of the 20th Century. I hope the Commission will allow me to give a short historic overview of how the systemic framework was institutionalised and maintained.

&#9;On the day that President Nelson Mandela was released from custody in February 1990, he said:

&#9;"The white monopoly of political power must be ended and we a need a fundamental restructuring of our political and economic systems to address the inequalities of apartheid and create a genuine democratic South Africa". 

In a systemic analysis of South Africa's recent history, it is appropriate to ask when and under which circumstances the political and economic systems to which Dr Mandela referred was created, systems whose mental restructuring was, according to him, already long overdue in 1990. I want to put forward the argument that both the system of white political dominance and the economic system of racial capitalism and the legal structure and ideological justification in which they were embedded, were constructed and institutionalised during the last decade of the 19th Century and during the first quarter of the 20th Century. From 1924 until 1974 the systems of white supremacy and racial capitalism were maintained intact and if anything, strengthened. They became even more exploitative, discriminating and unjust. In the 20 years from 1974 to 1994, South Africa's racist political and economic systems experienced a serious survival and legitmation crises to which I will come. 

&#9;From say 1890 to 1924, three important things happened in South Africa. Firstly the political system of white political dominance was institutionalised mainly by the act of Westminister of 1909. Secondly a series of legislation was enacted by the Cape and Union parliaments to create and exploitate the African Labour repressive as the legal foundation of the system of racial capitalism. &#9;Thirdly close symbiosis or partnership has been forged between the white politicians operating in the political system of white supremacy and the white business people operating the economic system of racial capitalism. Without this symbiotic relationship both systems could not have lasted for more than a century. White politicians and business people were most of the time, from say 1910 to 1994 hand in glove with each other to protect their mutual interests in the maintenance of the structures of white power, privilege and wealth on the one hand and the structures of black and mainly African deprivation, discrimination, exploitation and poverty on the other hand.

&#9;If you would ask me whether the multitude of discriminative and derivative legislation which was enacted to create and maintain the oppressive racist system was motivated by political or economic considerations, it would be difficult to answer. The political economic social and ideological considerations behind these legislation were closely intertwined but I would have to make a choice I would say that most of the racist legislation was enacted and maintained mainly on behalf of white economic considerations. White farmers, white business people, white employees, all of them were instrumental in the creating the racist system. 

&#9;At the end of the 19th Century the goldmining industry was confronted by an African Peasant Society which was reluctant to deliver the required number of workers to wage labour. The Africans were satisfied to meet their economic needs by traditional farming and by rather profitive small-scale maize farmers. It is estimated that the small African maize farmers produced more maize in the decades before the Anglo Boer War than white maize farmers. To solve the labour problems of the mines a tendency developed from the 1890's onwards to deliberately create a labour repressive system or more correctly to extend the labour repressive system from agriculture to mining. The repressive labour systems a passive role in the early phases of industrial legislation in several countries. In the case of Britain, the enclosure movement destroyed the whole structure of peasant society and created a wandering poor as a reservoir of cheap labour. This reservoir of unskilled labour played a decisive role in the launching of the Industrial Revolution at a relatively early date in Britain. 

&#9;Important differences exist however between the labour repressive system that was introduced in South Africa from 1840 onwards and the systems of other countries. In the case of other capitalistic countries the social dislocation and proletarisation caused by labour repressive systems lasted only 30 or 40 years before a section of the working population was able to command higher wages and was shortly incorporated into the social and political institutions. 

&#9;The labour repressive system in South Africa had several unique characteristics. Apart from it's conspicuous racial character, the repressive measures were very hard and were applied relentlessly. These characteristics as well as the longevity of labour repression in South Africa can only be explained within the context of the political and economic power structures that were in place when the successive mining, agricultural and industrial revolutions take place in South Africa.

&#9;After the Anglo Boer War, Milner appointed on behalf of the gold mining industry the South African Native Affairs Commission Sanac to seek solutions for the severe shortage of African Mine workers. Sanac recommended that Africans access to land and farming should be curtailed drastically to deliberately proletarise Africans to induce adequate numbers to enter into wage labour at very low wages. The philosophy of Sanac was accepted when the Land Act was promulgated in 1913. The Land Act was more successful than any other measure in prolateriatanising a very large percentage of the African population and in creating a very exploitative and unjust system of labour repression. The relation of structural dominance of whites over blacks was created by the Land Act and the racist legislation from 1910 onwards comes apparent when we note that the real African workers in two major sectors, mining and agriculture did not increase between 1910 and 1970. The real wages of migrant labourers in mining were in 1972 lower than the level of 1911. 

&#9;During the same period the real wages of white miners approximately doubled. The Land Act was truly the rock on which the whole system of racial capitalism was built and maintained for six decades. The colour bar of 1980 only to mention a few, the Industrial Reconciliation Act enacted by Smuts in 1924 and the discriminatory legislation of the packed government degraded African workers to a position of economic powerlessness. They became ultra-exploitable. 

&#9;Although the application of racial legislation was relaxed by Smuts during the war years in the 1940's, none of the discriminatory measures were removed from the law books by the Smuts government. When the political power shifted from the English orientated United Party to the Afrikaner - Orientated National Party 1948, systems of White supremacy and racial capitalism were still very thoroughly entrenched in the legal and constitutional structures of South Africa. Perhaps we should grant the argument that a form, not necessarily a racist form of labour repression was unavoidable precondition during the take-off phase of the mining and agricultural revolutions until say 1932 when the price of gold increased by 45%. &#9;The increase in the price of gold laid from 1934 the basis for an unprecedented growth period. From 1934 till 1973 the annual growth rate of the economy was 4,5% but if we take the political, economic and ideological power struggles into account, these forty years was par excellence a period in which whites were undeservedly enriched while blacks and especially Africans were undeservedly impoverished. The exploitation that took place during these four decades was so cruel that even the staunchest propagandist of liberal capitalism should not try to justify the deprivation, discrimination and exploitation. 

&#9;The power relations within the structure within the structure of white supremacy and racial capitalism changed drastically to the detriment of all groups other than white when the National Party became the government in 1948. By implementing its so-called apartheid policy to solve the native problem and to allay the fears of the Africans for the Black Peril, the National Party built a mammoth organisational structure in order to control not only the movement of Africans but also their living and working pattern in a very strict manner. 

&#9;A plethora of additional segregational legislation was put on the law book, the existing arsenal of discriminatory measures was extended quite considerably and made stricter and also made applicable to the coloureds and Indians. A very high rate of economic growth was maintained in the 1950's and 60's, whilst the per capita income of whites was 10, 6 times higher than African per capita income in 1946, white income was 15 times higher in 1975. If ever there was a period of upward redistribution of income, mainly from Africans to Afrikaners then it was the period of high growth in the 1950's and '60's. Given the power structures of white supremacy and racial capitalism it was a period of high growth with a trickle up effect. 

&#9;An important and always recognised part of National Party policy in mainly the third quarter of the century was Afrikaner favouritism. The National Pary used it's fiscal powers to tax the welfare English speakers and to increase social spending on the alleged poor-white Afrikaners quite considerably. The National Party policy of Afrikaner favouritism was however even more advantageous for the upper section of the Afrikaners. It enriched the richer Afrikaner in a spectacular manner. 

&#9;In an acquired twist of destiny, the emphasis of the National Party shifted from the ideological aim of uplifting the poorest Afrikaners towards assisting richer farmers and the emerging Afrikaner entrepreneurs. By extraordinary generous types of favouritism and Afrikaner haute bourgeois was created. They quickly became the champions of a system of unbridled Afrikaner capitalism. Examples of Afrikaner favouritism were the allocation of fishing quotas, mining and liquor concessions, government contracts and all kinds of inside information, several Afrikaner corporations like Rembrands, SANLAM, Volkskas Bank etc, grew spectacularly due to lucrative favours and inside information received from the NP government. 

&#9;If I were to identify and Afrikaner corporation that has benefited the most from NP favouritism then it would be Naspers from 1948 onwards a very close political, ideological and personal symbiosis between Naspers and the NP government. 

&#9;The Afrikaner Broederbond played a key roll in operating and propagating a philosophy that loyal Afrikaners should only support Afrikaner business and Afrikaner institutions. It was however not fully Afrikaner business that profited in the 19750's and '60's. Apartheid proved to be good for every white business, also the English speakers, Dan Omeira a well known author made in his 1996 book the important point that although English speakers have had moral and theoretical qualms with the NP's racial policy, he knows of no Anglophone liberal businessman who declined to profit from National Party interference in the free market and raise their workers wages. A good example in this regard was the gold mines of Anglo American and other gold mining corporations in the English establishment. 

&#9;During the 1960's and early 1970's these mines continues with migrant labour, the compound system and extraordinary low wages. If we take these low wages and poor health and safety situation in the compounds and mines into account, the question arises whether the human rights of the migrant workers were not grossly violated during the 1960' and the early 1970's. &#9;

&#9;Although the Progressive Party raised very important criticisms against apartheid during this period I am not aware of similar criticism in Parliament by the Progressive Party against the way Anglo American and other gold mines exploited migrant labourers. During a speech made in Stellenbosch in May 1972, Mr Harry Oppenheimer defended the low wages of migrant workers in his mines with the feeble argument that although we can pay higher wages, such higher wages would put the Afrikaner gold mining companies out of business. 

&#9;A comprehensive policy of social engineering was implemented by Dr Verwoerd and his successors to increase the capital intensity of the economy in an attempt to make it less dependant on African labour. Due to these policies the capital labour ratio increased dramatically over the last 30 - 40 years and the South African economy became seriously distorted. 

&#9;The present tendency towards jobless growth can to a extent be blamed on Verwoerdianism. What should be emphasised however is that many business, both Afrikaner and English operated enthusiastically within the separate development of Verwoerd and made huge profits, for example in border industry operation. 

&#9;The power relations within the structure of white political supremacy and racial capitalism change yet another time as also happened in 1948 during the middle of the 1970's. This paradigm shift brought about a close and rather abnormal collaboration between this securiatic state of P W Botha and private business in a joined attempt to perpetuate white supremacy. the business sector, both English and Afrikaans business supported the Botha Government rather enthusiastically in three of his policy projects. Firstly in his relentless attempts until 1986 to make a success of the Verwoerdian separate development projects. 

&#9;Secondly, in Botha's ambitious total strategy project to counteract the alleged total onslaught and to perpetuate white supremacy and racial capitalism. 

&#9;Thirdly in implementing Botha's new apartheid strategy that was in fact launched on request of the business community in an attempt to break out of the stranglehold of stagflation. 

&#9;Due to the close collaboration and overlapping interests of main partners in PW Botha's policy agenda, rather artificial integration of state and capital took place. In 1979 and '81 the Carlton and Goodhope conferences took place to enhance agreement on policy issues and to institutionalise the role for private sector capitalist in the growing beurocratic state. The different kinds of intertwinement between the government and business raised the question about who was coopting whom and at what price. This is a rather difficult question to answer. Perhaps the best answer is that everyone of the main players in the comprehensive total strategy compact of power was of the opinion that we was coopting the other through the close collaboration between this securocratic government and private business with Armscor as the pivot on which everything hinged. A military industrial complex was created. 

&#9;This complex was from a financial point of view extraordinary advantageous in a declining economy to those businesses that were part and parcel of the structural pairing.

&#9;It was not surprising that an overt and covert agreements between private and public sector institutions and lucrative transactions between Armscor and its multitude of subcontractors set a scene for all kinds of corrupt wanglings that in due time, especially when Botha's reform generated after the rubicon into a policy of cooptive dominance that became institutionalised as a system of structure corruption. 

&#9;As part of the total strategy P W Botha replaced the policy of Afrikaner favouritism with a policy of patronage towards those business co-operation with him in the military industrial complex and in sanction busting. Botha granted the business the so-called new apartheid strategy in the Wiehan and Rickert reforms. Although these measures went a long way towards of meeting business demands for a more flexible labour market we should not forget that the main purpose of these measures was to entrench and to perpetuate overall white control. The business sector, both English and Afrikaans that requested the new apartheid strategy, now claims that it has been instrumental in the abolishment of apartheid. This is a rather opportunist and perhaps even a hypocritical claim.

&#9;It should be remembered that the new apartheid strategy was only a modern version of apartheid and definitely not an antiapartheid policy. Although it improves the wages and living conditions of the black insiders in urban areas, it caused directly and indirectly a considerable deterioration in conditions of the black outsider in rural areas. We should also remember that the main purpose of these measures from Botha's point of view was to entrench and to perpetuate white control. Botha succeeded temporarily in this purpose. We can put forward the argument that the new apartheid measures in conjunction with the rather successful total strategy propaganda, attained a pseudo or sham legitimacy of the Botha government in the eyes of the Reagan and Thatcher governments. The close collaboration between business and the Botha government and especially the business partaking in the industrial military complex was undoubtedly and intrinsic part of the white resistance against the struggle of the liberation organisation. Business therefore not only abolished but perpetuated the life of the Botha government and with it apartheid. 

&#9;Business organisations like the Afrikaners Handelsinstituut and SAPO also claimed that the policy of apartheid has made South Africa poorer than the country and it's people would have been. Whether the system of racial oppression in all its ramifications was dysfunctional for capitalism during say the 100 years from 1870 until 1970 is a very controversial matter. The racist system was until 1970 in all probability conducive for economic growth but nonetheless a morally despicable system. It is of course of little avail to split hairs whether racial capitalism was conducive for economic growth form say 1870 to 1970. When racial capitalism is evaluated from today's point of view the really important questions are firstly whether it was a moral system and secondly what has been its distributive effect? The racist system, immoral and inhuman character stands above dispute. It is really a pity that the submissions made by business did not emphasise this point explicitly. Most of the business submissions .. (tape end) ...physically and without reservation that the power structures underpinning white political supremacy and racial capitalism for 100 years were of such a nature that whites have been undeservedly enriched and people other than whites undeservedly impoverished. 

&#9;I do have Mr Chairman about four pages, seven points and which I explain and how whites were enriched and the blacks impoverished. If you can ask me a question I will give a summary of my summary.

&#9;If one understands the structural nature of South Africa's political and economical system correctly then it is clear that the one side of the South African structural coin impoverished the Africans while the other side of the same structural coin enriched the whites, especially during the first 70 years of this century. In his review of Kadar Asmahal's Book Mamut Mamdali, make an important difference between perpetrators and victims on one hand and beneficiaries and victims on the other hand.

&#9;"In the South African context perpetrators are a small group as are those victimised by perpetrators. In contrast beneficiaries are a large group and victims defined in relation to beneficiaries are the vast majority of society".

I am very much in agreement with Mamdali that social justice demands that those who have been the beneficiaries of the power structures of white political supremacy and racial capitalism have responsibility to make quite a substantial sacrifice towards those who have been the victims of these power structures. Although white political supremacy has mended, a large part of the structures of racial capitalism is still very much in place and with it the concentration of huge economic power and privileges in very few white hands, namely the hands of white business and white corporations.

DR RANDERA: Professor I'm sorry, can I stop you there?

PROF TERBLANCHE: It's only a paragraph.

DR RANDERA: Last paragraph.

PROF TERBLANCHE: I'm in full agreement with Mr Mbeki that the stability of the new South Africa can be at stake if we fail to find a satisfactory of solution of inequality. A satisfactory degree of systemic justice can perhaps be attained by imposing a wealth tax of say 0,5% annually for 10 or 20 years on all persons with nett assets of more than R2 million and to use the yield of this levy for the upliftment of say the lower 40%. A levy on wealth for redistributive purposes is preferable above any form of taxation. Such a taxitation would be levied on wealth accumulated during the apartheid century.

&#9;I will stop there thank you.

DR RANDERA: Professor thank you very much for all the work you've put into this submission and for the co-operation that you have had with the Commission, not only for this hearing but other hearings as well. I just want to ask a few questions really for clarification rather than to amplify what you've said already. You mentioned earlier the reasons why political supremacy and racial capitalism impoverished Africans and enriched whites undeservedly. Can you give a short summary of those seven points?

PROF TERBLANCHE: Yes, firstly the Africans were deprived of a large part of land on which they conducted successful traditional farming for centuries. White farmers on the other hand had the privilege of property rights and access to very cheap and docile African Labour, my father included. Secondly, for decades, millions of Africans were paid exploitative wages, in all sectors of the economy but mainly in gold mining and agriculture.

&#9;The fact that the Africans were political powerless and economically unorganised might make them easy prey for super-exploitive for the white workers. 

&#9;Thirdly, a great variety of discriminative legislation, not only deprived Africans from the opportunity to acquire skills, but also compelled and humiliated them to do really unskilled work at very low wages. While discriminatory measures were often to the disadvantage of business, they were very much to the disadvantage of white employees. &#9;

&#9;Fourthly, perhaps the greatest disadvantage which the prevailing power structures had had for Africans is that these structures deprived them from opportunities to accumulate human capital, the most important form of capital in the twentieth century. For the first three quarter of the century, social spending, on education, pension etcetera, on Africans, was per capita more or less ten to eight times smaller than on whites. In 1970, the per capita spending on white education was twenty times higher than the per capita spending on Africans. 

&#9;Fifthly, the fact that a legal right to own property and to conduct a business was strongly restricted in the case of Africans, also deprived them of the opportunity to accumulate property and to develop entrepreneurial and professional capabilities. The position of white was again the complete opposite, they enjoyed property rights, they deprived Africans from their land, they had access to capital and the opportunity to develop business organisations, entrepreneurial capabilities etcetera.

&#9;Sixthly, the liberation struggle and the resistance against it had a devastating effect on the poorer sixty- percent of the African population; their income. Already very low in 1975, decreased by more or less thirty five percent from 1975 till 1991. The fact that the poorer forty to fifty percent of the total population, more or less eighty million people, cannot satisfy their basic human needs on a regular basis, making it so much more urgently necessary to do at least something meaningful to improve the quality of their poverty. &#9;Seventhly, it was not only individuals that have been impoverished and destroyed by the racist system, but also African societies, while it also prevented the South African people from becoming a society. We can put forward a strong argument, that the depravation, the repression and the injustices, inherited in the racist system, not only impoverished the African population but also brutalised large numbers of Africans. After decades of apartheid and the struggle against it, the South African society is a very disrupted and divided society. Not only along racial and ethnic lines but also because of seemingly unreconcilable values and attitudes.

DR RANDERA: Thank you, but I have just one other question, and that's the common perception that that made some people believe that apartheid was destroyed by economic growth but you in fact say that it was destroyed by the lack of it. Can you enlarge on that point?

PROF TERBLANCHE: Yes, I think the so called 'Oppenheimer thesis' was originally formulated in the 1950's. According to this thesis, all that South Africa needs, is a high growth rate for quite a long period. And then this high growth rate, will generate all kinds of powers and sources of labour etcetera, etcetera; and then in the end it will destroy apartheid. Now the way in which the coloured and perhaps the Asians were introduced to the higher ranks of labour in the sixties, is perhaps an example of that. But as you know from 1973 to 1994 South Africa experienced a period of stagnation, the growth rate was only 1.7 percent annually and the per capita income declined by more or less 0,7 percent. It was twenty years of creeping poverty, and it was in these pressures that in 1989 South African economic situation, with the disinvestment especially after PW Botha's rubicon speech, the outflow of fifty billion rand out of the country. That South Africa was politically and economically so to speak on it's knees when Mr FW De Klerk made his famous speech in February 1990.

DR RANDERA: Thank you Professor, I have no further,

CHAIRPERSON: Thank you very much. Russel?

MR ALLY: Just a very short question, Professor Terblanche and its linked to what Dr Randera asked you, but slightly different. Not the question of whether there is growth or non-growth. The more so fundamental argument is the question of free enterprise. Capitalism is anti-thetical in the long run, because it needs free labour, needs flexibility, needs investment and that is the more fundamental part of the argument. How do you respond to that?

PROF TERBLANCHE: Yes, as I said, it is a very controversial argument. A very controversial question, was 'racial capitalism' I call it, dysfunctional? Were the racist system dysfunctional for capitalism? As I say, we can make quite a strong case that more or less until 1960, the racist system may have proved very conducive for capital accumulation, due to the low wages that were paid, it was possible for South African corporations, to accumulate capital at quite a high rate.

&#9; I granted the point that in the first third of the century one or other system, not necessarily a racist system, of labour repression may have been necessary for the so-called 'take of faith' as has happened in other countries. But the problem remained institutionalised. Yet, if the oil crisis did not arise in the beginning of the seventies, and we experienced a five percent growth until ninety nine, then perhaps it would have happened that capitalism would have destroyed racial capitalists. But the fact of the matter is, it did not happen in the South African case. The lack of economic growth, as I say, was the main reason why all kinds of pressure arised and in this connection disinvestment and as I said the whole economy on its knees played quite and important role when the important transformation started to take place.

CHAIRPERSON: Any other - Hlengiwa?

MS MKHIZE: Thank you, professor. You seem to have apply your mind a great deal on the issues around economic development and the apartheid policy. Have you thought much about the (word unclear)?

PROF TERBLANCHE: As I said, I was cut short, or a paragraph, that perhaps what we need - perhaps let me start at another point. A clear understanding of the structural nature of the whole process of exploitation or at least ascension(?). It's so important, that perhaps the government should consider the possibility of appointing another commission, parallel to this one. A commission that I would like to call a 'justice and reconciliation commission'. Such a commission can then perhaps also investigate the possibility of the suggestion that I've made of a wealth tax. Without a clear understanding of the systemic and structural nature of exploitation that have taken place, over the last at least hundred years, it would not be possible for business and other beneficiaries to make the necessary confessions, to show the necessary repentance, to experience the necessary conversion and do, be and to be prepared to make the necessary sacrifices. 

&#9;All these things, confession, repentance, conversion and sacrifice, are not only pre-requisites for forgiveness by victims. All these things are also a precondition for promoting social stability and systemic justice in the long rung. Social stability and systemic justice are in their turn, preconditions for economic growth and job creation. I'm also making the point that although the 'De Beer' (?) program, which is an excellent program. I think it was formulated in too narrow economic terms. It did not give enough attention to the real problem South Africa. 

&#9;South Africa's real problem is not an economic problem. The real problem is the absence of a real social structure. And to create that kind of social structure and social stability, and systemic justice, I think we need not voluntarily, archbishop, not voluntarily , ...(inaudible) but restitution in the form of a wealth levy.

CHAIRPERSON: Thank you very much, Alex.

DR BORAINE: Professor Terblanche, I'd like to follow up on that question, which you outlined on page 25. In your proposal you talk about ten or twenty years. I'm sure your familiar with the German experience in 1945 where a single, once-off tax was imposed upon those who were in a position to afford that. That's the first part of the question, is it not in your judgement possible, possibly counter productive to have this for a longer period of time. It is not possible to consider a shorter period. Second in discussion in the TRC about this whole question of inequality and poverty which I agree with you, is the fundamental problem facing South Africa and would create enormous instability and therefore make business development almost impossible as well. If we had to take that with the seriousness that you have taken it with, the people who would be requested or demanded of to pay that tax, would be in large measure, a small white community. 

&#9;In terms of the new constitution, it has been argued against me, publicly, that this would be unconstitutional, because you cannot discriminate on the grounds of race. Those are two questions I 'd like you to answer please.

PROF TERBLANCHE: On the first one, the German case, I can't remember that typical German word, but it was in place for forty years from 1948 till 88. It was a tax on those, who did not lost property during the war. Now people had an option to pay a lump sum immediately, or to pay a very small percentage for a forty year period and my information is that it was very important in (word unclear), Germany, West Germany it was and for, played a role in what is commonly called , (word unclear). 

&#9;On your second question, that is maybe unconstitutional. No, I'm not proposing that such tax only, wealth tax only, be imposed on whites only. Other people also benefited for example, Homeland leaders and those that participated in the tri-cameral parliament etcetera, etcetera, especially in this period of optive dominance during the eighties. All people with assets of more than two million, two million one can make quite a strong case that directly and indirectly, they have been the beneficiaries as Mr Man-, Professor Man-, what's his name? Mandani, called them and that those that have especially been beneficiaries, have been enriched, as I said undeservedly, will have a responsibility towards those millions, eighty million, that are now living in abject poverty. Something must be done and I think this kind of wealth levy will have a very important symbolic value. 

&#9;It is to my mind needed also for mainly white adult education of what really happened during this century in this " wye en droewe land" van NWP Van Wyk Louw.

CHAIRPERSON: Baie dankie Professor. Please stand down. I am pleased to welcome Minister Jay Naidoo. His trying to be modest and sit at the back, and also I see a friend from Germany. They've just been talking about Germany. Rudolf Hentz. You are welcome here dear friend. Right you are, will he have the representative of Nafcoc please.

DR BORAINE: Good morning gentlemen. Welcome, thank you very much for coming. Can I ask, will all three of you be participating or one or more.

NAFCOC: All of us will be.

DR BORAINE: Would then all three of you please stand, and could I ask whether you would like to take the oath or the affirmation?

NAFCOC: Yes, the oath, thank you.

DR BORAINE&#9;: Dr Boraine administers the oath.

NAFCOC: All participating parties, take oath.

DR BORAINE: Thank you, please be seated.

CHAIRPERSON: Mr Kongwane, could you please introduce your colleagues and yourself for the record.

MR KONGWANE: Thank you very much. I am accompanied here actually by the whole leadership of Nafcoc. Before I introduce these gentlemen sitting with me here, I would like to introduce to you the Deputy President of Nafcoc, Mr Rabilee(?), he is sitting right there at the back and the Senior Vice President Mr Mokwena and the Chief Executive Mr Mochabe. Sitting with me here is, on my right, Mr George Ngota who's been at Nafcoc a very long time and on my left is Mr Michael Lieve who is a past Secretary General of Nafcoc.

CHAIRPERSON: Thank you very much.

MR KONGWANE: Mr Chairman, Members of the Committee, Ladies and Gentlemen. With the advent of a new democratic elected government on the 27th April 1994, our country has attempted to come to terms with its bitter past and strive to meet the challenges that face us currently to make a better life for all. None of us want to make a return to that past. As an organisation that has spent nearly sixty years, striving for the rights of the black business community, Nafcoc and it's members and it's membership are represented here today to share with you the truth as we know it. Some statements may offend those who sincerely believe that they played no part in the perpetration of the great apartheid plan which attempted to stifle development of the black business community and in turn, Nafcoc itself.

&#9;Our coming to terms with this past is therefore a form of reconciliation that strengthens us as a business community to go forward and seek ways that ensure our sustainability to the future. In addressing the key focus, area that relate to the role of business during the period March 1960 to May 1994, we will cover the following aspects:

&#9;One, the role of the past government in the stifling of black business development and its total onslaught strategy. 

&#9;Two, the role of the white business sector in colluding with the past government in this respect and furthering their own interest. And three, the role of organised white business. But Mr Chairman allow me to give you a history and overview of Nafcoc.

&#9;Nafcoc first started out as a group of traders coming together in 1945 under the banner of the 'Orlando's Traders Association'. The government at the time was that of General JC Smuts, who was Prime Minister from 1939 to 1948. Smuts so-called enlightened reign did nothing for the lot of black business, resulting in the formation of the Orlando Trading Association, abbreviated OTA, to champion the cause of the black trader during that period. The ascent of the National Party to power in 1948 and their various regimes in the following years, differed only in the severity of the controls imposed on the black business community. Later policies and crack-downs, flowing from Dr DF Malan, 1948 to 1954, Mr JG Strijdom from 1954 to 1958, Mr HF Verwoerd, Dr HF Verwoerd from 1958 to 1966. DJ Vorster, 1967 to 1978, PW Botha, 1978 to 1989 and FW De Klerk, 1989 to 1994. All National Party Prime Ministers and or State Presidents, never gave the black entrepreneur an opportunity to realise his or her potential. Although the laws which restricted black entrepreneurs and identified by tension grabbing headlines, such as,

&#9;"Beware of natives, employed", 

&#9;"No trade in urban areas", 

&#9;"Go back to your homelands", 

&#9;"No expansion", 

&#9;"No partnerships", 

&#9;"No black and white relationships", 

&#9;"One man one (word unclear)", and 

&#9;"reverse the monies into the cities".

were passed during National Party rule. Black traders opposed many of these laws, with fluctuating degrees of militancy. 

&#9;Our early traders saw the danger signals when the National Party came to power and the struggle for economic freedom had risen to a new level. The OTA persuaded people in the townships, to keep (unclear) in the townships and to mobilise the black business community to counter this new onslaught. Old stalwarts and early pioneers of this struggle were people like the late SJJ Lesolango(?), the late JCP Mazimbela(?), the late AM Gadi(?), (name unclear), the late J Mofokeng, Sam Mofanyane, Richard Maponye, PJ Gumede, (name unclear) and others, caught up in the greater struggle of the liberation of the people, they asserted. The businessmen, who lead in the liberation of the black man, the black man's liberation lies in his economic liberation. 

&#9;These early struggles created a necessity for a national organisation as battles for economic and political freedom had to be launched all over the country. We looked forward to the day when we would participate fully in the economy. The establishment s o read when blacks suddenly awakened and took up the trading challenge. The governments law making machinery moved into action churning out destructive laws that hung over blacks,, like the sword of democracy. The followers of black trade in this country, do not mince their words when they reflect on those lean and mean days and relate how they were not a bed of bright roses but a red hide, that churning battle field. The authorities kept telling them

"You cannot expand in the urban areas, go to your homelands."

The response was a big and bold

"No, sir, this is our land, we are here to stay."

And while officialdom was crowding them to a point of suffocation, the early traders saw the danger light flicking from afar. It was time for action, meaningful action. A protractive struggle for economic freedom had begun at that time.

&#9;They had to mobilise themselves, galvanise their forces and lay out strategies to rally against a serious situation that was threatening them. 

&#9;Firstly, they had to unify themselves for unification of individual traders would be their first available weapon for combat. &#9;Secondly, they had to persuade black people in the townships to buy black and keep cash in the townships, thus heightening the conscious. Caught in the midst of a difficult world of beaurocratic red tape, they had to fight to rise from under the shackles of a racial system of oppression and domination to restore national pride. Needles to say, they had to work their knuckles off to place a meal on the table. Multi-discriminatory laws confronted the early black traders. These discriminatory laws and stumbling blocks impeded their efforts to acquire the skills, aptitudes and capital they so needed to prosper in a business environment dominated by whites. This inhibited their spirit of enterprise and helped them instil a deep-rooted distrust of the freemarket system.

&#9;There has never been a shortage of business talent among blacks and yet during these first decades there was no place for the black trader above the level of seven forms of economic development in South Africa. The wheels of racial domination and discrimination were forever spinning, crushing, disrupting and destabilising any attempts at expansion of black business. Obviously those early traders had a fervour desire to spread their tentacles and above all breath the fresh air of economic freedom. While organising themselves and banking on their buying power of blacks in the township as their only bargaining power, the traders were also locked in a dispute for land against the authorities. 

&#9;The dispute over land ownership rights of blacks in the country which also affected their potential involvement in the agricultural industry has remained a sensitive political bone of contention since the founding of the Union of South Africa and the subsequent passing of the 1913 and 1936 Land Act which had declared eighty six percent of the country white owned and only thirteen percent owned by blacks. During the one, during one of his many campaigns, addresses Doctor Mpanyane (?) had said,

" As long as the situation of restricted black land ownership remains, it is quite obvious that blacks can never have a fair and reputable share in the wealth of the economy".

Against the background of existing policy restraints, that confined the black majority in South Africa, the thirteen percent of the country, they morality and rationale underlying the free market system in the country could never be made acceptable to blacks. Doctor Mpanyane and his friends kept urging the government to scrap these outdated land acts that stood in sharp contrast to expressed government intentions to create a climate of racial harmony. Time and again, Doctor Mpanyane and his colleagues kept telling the government that the main obstacles that hampered progress towards a more judicial and productive system of land distribution and utilisation in the black areas were not only political but were also deeply inbedded , embodied in the culture of the people. In those early days, Mr (name unclear), president of the OTA, used to relate how whites were doing everything possible to retain the lucrative market created by black people. An example, of their fight for this market was that of Mr MJ Hammond, one of the Transvaal Business White organisers when he warned members of the amalgamated society of (unclear) workers in his report. And he said and I quote:

"Beware of the natives in trade".

He appealed to members to open their eyes and see what was going on around them and ask them to help fight the danger of the native taking away their trade. According to him, black trade belonged to white traders and not blacks themselves. Another example, was that of Mr DJ Van Vuuren, addressing a congress of the Health Officials Association in Port Elizabeth in December 1957. He said there was danger of impoverishing the economy of the cities if Africans were allowed to trade in their own townships and amongst their people. He further said the Africans earned thousands of pounds in the cities but is this, but is the city protecting its main shopping area? Mr Lesolang recalled that even today the spirit of wanting to take black trade out of his owners hands still existed. Perhaps even stronger. Throughout the country, we were required to conduct small business, catering only for the daily needs of our people in the urban areas.

&#9;When a black buying community buys in town, and rubbed shoulders with whites in the course of their shopping, they are said to be crowding whites, something which many whites see as very undesirable. Mr Chairman, I want to briefly come to the formation of Nafcoc.

&#9;In 1955, a general meeting of all African traders on the Reef was convened to form the Johannesburg African Chamber of Commerce, abbreviated JACCOB. The organisation which has widened horizons, brought the African trader into the same fold with other associations and into competition with its white counterparts. The Johannesburg Chamber of Commerce. At the Chambers conference in 1959, it was reported that there were still small traders organisations reporting to represent African traders, but not under the ages of JACCOB. Some of them were reported to be springing up in the provinces. JACCOB organised a traders' conference in Orlando in April 1964, to unify these associations under one national chamber body. Three hundred delegates attended the conference and gave back to the National African Chamber of Commerce, NAFCOB, also an abbreviation. Its first president was Richard Maponya and Mr Maponya served Nafcoc for two years as its president during which time he relentlessly emphasised the need for black unity. Up until 1968, Nafcoc was organised along provincial lines and local chamber branches were affiliated to provincial organisations. Provincial organisations, especially in the Transvaal and Natal and Western Cape enjoyed good support under very able leadership. 

&#9;The period after 1968, was a period of phenomenal development, reorganisation of branches into regional rather than provincial associations. Early in January 1969, after occupying the presidential suite for barely three months, Doctor Mponyane and his executives were called to Pretoria by Dr Piet Koornhof. Dr Koornhof, deputy minister of Bantu Administration and Development at the time met with a much wider deputation than anticipated as Nafcob suspected that the Department would try to divide the association into ethnic components in conformity with the prevailing government policies. On presenting his plea for ethnic changes, the minister said the integrated umbrella organisation at the top would not be tolerated. That was the most exasperating time for members of Nafcoc throughout the Republic. Some branches felt that the organisation should rather give in and accept the pattern proposed by Dr Koornhof. 

&#9;In the face of government pressure, at the fifth conference of Nafcob, held at Pietermaritzburg in May 1969, the conference resolved that the unity of Nafcoc be retained and be re-organised into regions. For the purpose of granting a greater measure of autonomy to the regions it was also agreed that the name Nafcob be changed to Nafcoc and that each region should be represented directly on the national executive. Having regionalised, the organisation began to make new demands from the government. Nafcoc asked the government to grant African business in urban areas, title deeds for their sites and a ten point memorandum asked the government to change its policy so that approved African traders could firearms to protect their businesses.

&#9; The chamber also asked that the government revise its policy under which the Bantu Investment Corporation was not allowed to finance industrial and commercial undertakings for Africans in urban areas. A letter from Dr Koornhof, threatened however to dampen their spirits and pose the possibility of splitting Nafcoc. Dr Koornhof's response to the memorandum was that the chamber and its affiliated provincial organisations be re-organised along ethnic lines if it wanted the government to consider its proposal. This meant the chamber, the chamber would have to break up into Zulu, Xhosa, Tswana, North Sotho, South Sotho, Shangaan and Venda groups. The demand from Dr Koornhof had already opened a (unclear) within the ranks of the chamber. With some members of favour, in favour of the ethnic grouping and others against it. Those against it believed that rigid ethnic re-grouping would bring about confusion and ultimately the death of Nafcoc. At about the same time, Nafcoc asked Minister PW Botha, to dismantle development co-operation as part of his economic new deal for blacks. Before that extraordinary conference, tempers were expected to be especially short over black - white partnerships. One major black retailer burst out,

"While I can't graze my cow in the white man's field, his will never graze in mine'.

They advocated for improvement in black - white partnership terms, while also urging him to scrap all race laws. More than a hundred Nafcoc delegates also decided in a closed cession to seek international funding for business ventures and throw open the organisations membership to Coloureds and Asians. The president of Tamsonyane (?) had said, 

" The mood is positive and there is no bitterness, we want to wipe colour out of the business sector".

The government refused to speak to Nafcoc for the next seven years.

DR RANDERA: Mr Kongwane, can I please emphasise that time is of the essence here, so, can you please,

MR KONGWANE: Let me just do a summary, I was taken

DR RANDERA: Please, we all have your documents, we have read your documents, I hope people in the audience also have the documents, so if you can summarise,

MR KONGWANE: I was trying to take advantage of my predecessor, and I do have an executive summary sir, but I thought people could take a little bit of time because there are some very important issues we wanted to elaborate on. But in order to look at the role of the past government, the stifling of black business development and its total onslaught strategy, we look at the Group Areas Act, the Job Reservation Act, the Land Act, the Prevention of Illegal Squatting Act, the Separate Amenities Act.

&#9;The Job Reservation Act, helped the government of the time and big business to keep black people away from apprenticeship and from acquiring skills. Coupled to various other enactments such as stringent licensing laws, were put into place to control and regulate the level to which the black business community could rise. These enactments, were enforced with an iron fist and briber, corruption, intimidation, imprisonment, evictions, expropriations, harrassments and persecutions were the order of the day. 

&#9;By virtue of its history, black business was representative of all small, medium and micro enterprises. It was therefore of no surprise that many of the laws enacted were intended to create (unclear) for black business. It was estimated that as many as 150 such laws existed and Nafcoc addressed some of these in its submissions, encompassed in its study on various to entry and to have a document to submit. Of particular mention in the submission was the persecution of the black business community in many forms. These ranged from arson attacks, detention without trial, imprisonment on (unclear) charges to murder and race. All in all communities were under siege and business people often plain leadership rose. We were spared no mercy. Most of these were thrown into jail. 

&#9;A key feature of government policy was to enforce its policy, its policies, of separate development when Nafcoc formally established itself after many years of operating as loosely, defiant traders associations. Pressure was brought to bare to organise itself along ethnic lines, something which I have already mentioned and of course for seven years Nafcoc was banned from communication with the government.

&#9;Second, I want to focus on the role of the white business sector, colluding with the past government in this respect and furthering their own interests. The role of the white business sector, especially the corporate sector, in colluding with government as well now. Examples of these were: One, serving on governments' economic advisory committee to determine the countries economic policies, often with total disregard for the concerns of the black community. Two, utilising the relaxation of laws to trade in the CBD, to invade the townships because of their greating buying power. Three, sitting on various marketing and pulsator boards to further their own interest. And four, creating state monopolies that further alienated the black community.

&#9; The third aspect of this is the role of organised business. It is difficult to accept the statement that some sectors of organised business do not accept the responsibility of their role in ensuring the alienation and stifling of development of the black business community. One could give the following as clear examples: One, input into various acts, for instance the Companies Act, apprenticeship laws and rules and regulations of professional bodies, application for membership into their own structures, abuse of fronting and 49/51 partnership by their own members, high-handed attacks and distancing themselves from organisations that supported sanctions for good reasons. Highly critical and vehemently opposed to progressive policies enunciated by the Nafcoc, such as its '3 4 5 6 policy'., that is now being pursued through current initiative of government and unbundling process. In conclusion Mr Chairman, our organisation has a number of views on taking this process forward. Some of these are being put into place, currently through affirmative action. Government procurement policies and new (unclear) institutions to cater for the interest of the historically disadvantaged community. Reparation could take many forms, but surely, there could be some role that big business and organised business representing the main white business sector, in instituting initiatives that would correct the imbalances from the past. 

&#9;We would like to take the opportunity, Mr Chairman, to thank the TRC for inviting us to participate in this hearing and we believe that it has and will continue to play a significant and uplifting role in helping all sectors of our communities to reconcile and to come to terms with our past. Thank you very much.

DR RANDERA: That the white chambers that you mentioned, SACCOB, the Afrikaanse Handelsinstituut, did not allow membership by any other race group. Do you still stand by that position?

MR KONGWANE: Well, we stand by the history position of it. Anyway, after 1994, many of them had been trying to you know to ask Nafcoc to merge or to work out some co-operation with them and this was followed by the HI , Nafcoc, co-operation kind of accord.

SPEAKER: Mr Chairman, if I can respond, there was a particular chamber and I'm not sure if this was widespread, that perhaps did not allow membership of the organisation. But they form what they call a BCA affairs committee, a Black, Coloured and Asian affairs committee and people were invited as time permitted if issues affected the other race group and to participate in such committees. So those were incidents of perhaps maybe not membership but addressing some of those issues.

DR RANDERA: Mr Kongwane and your colleagues, you have quite clearly told us about the way black business people were undermined during this period we're looking at. There is also a school of thought that, Nafcoc as an organisation has a basic principle believed in black capitalism as a form of liberation and that's how black people would gain their liberation. I have two questions on that. One is, what structures were you involved in yourselves as a group with other democratic structures in the time that we are looking at, the union movement, specific organisations, liberation movement outside, in order to bring about the changes that we have today. Let me stop at that and perhaps I'll go onto my next question.

MR KONGWANE: Yes, I will respond in part and one of my colleagues will respond in part. We thought the best way to deal with this and as I have already mentioned, the '3 4 5 6' plan. The '3 4 5 6' plan was aiming at increasing equity for black people, to bring into a business, black managers to promote business for black people. But this was one side of the story, but the other side of the story was that we wanted to have people supporting small business, procurement you know, between blacks, big business and small business. Unfortunately this did not work out but one of the issues which we were working through. The main thrust was the '3 4 5 6' plan which was formulated in 1990.

NAFCOC SPEAKER: Maybe with regard to co-operation with other organisations, there was a time when the government did not allow COSATU, for example to communicate, to issue statements. There was communication between Nafcoc and COSATU and the statements were issued through Nafcoc. Nafcoc worked very closely with the ANC, some of the plans that Nafcoc brought to South Africa by way of trying to organise business, were joint responsibility between Nafcoc and the ANC. So there has been a common objective between Nafcoc and liberation movement in particular.

DR RANDERA: Sorry, before my next question, can you just define this '3 4 5 6' plan of yours. You've mentioned it

NAFCOC SPEAKER: Yes, the plan stated that by the year 2000, all companies listed on the Johannesburg Stock Exchange, must have at least thirty percent of their board members from the black community. At least forty percent of their total shareholdings must be controlled by the black community, at least fifty percent of the value of the outside purchases must come from black owned suppliers and contractors and at least sixty percent of the top managerial and personnel must come from the black community.

DR RANDERA: My last question to you Mr Kongwane. We've seen in other sectors, the legal sector, the health sector a move towards uniting of structures, so in the health sector we've recently formed a, we've seen the formation of a one organisation representing all doctors. Looking forward rather than backward, can you tell us what's happening in the world of business. Because one gets the sense still that the situation remains as polarised as ever, with the SACCOBs on the one side the AHI on the other side, SAFCOC and Nafcoc on the other side. What sort of unity are we beginning to see in that field?

MR KONGWANE: I think black people are still very conscious of the fact that in the past there were partnerships which did not work for them. However, I think what we are advocating for and what we believe in, is that any partnership that takes place between blacks and whites should mean really that there will be equity for all and Nafcoc supports that. It is going very slow, obviously in most different business sectors. Because blacks do not come to the table with much

NAFCOC SPEAKER: Can I just add

CHAIRPERSON: No, no press the red one please

NAFCOC SPEAKER: I think the most important question that we need to ask ourselves is whether there is a common message between the black and the white business today. There was a question of property ownership which was exploited by the white business during the era of apartheid with the advent of the democratic government. White business is taking advantage of acquiring properties in the former traditional, in the areas which are traditionally black areas. You take for example, oil companies not used to own garages, or service stations in the town ship by way of donating them to council, local council. With the advent of the new government, everybody can acquire properties in the township, but we see oil companies, big business, competing with small business in acquiring those properties. Now you have a situation where, those who never had are not given the space to acquire properties. If you look at the many service stations that are emerging in the townships, they are not owned by individuals, they are owned by oil companies. Individual or black in particular, stay as operators. Now I think we should be saying to ourselves, when are we going to enable those people to actually acquire those properties. Are we going to reconcile big business and small business when the democratic space that has been created , is being exploited, not in the interest of emerging businesses but in the interest of big business. We should be saying to ourselves, are banks position today, to empower the emerging business? The answer is no. They still behave as if we are living in the 1960's. There is nothing of material nature, that will make small emerging business, to reconcile with big business because both who have got finances that is a bank. These are serious questions that we will not be able to reconcile. The big business and small business. These are fundamental problems. 

&#9;There was a question of the wealth tax here, which the professor, so honourable put on the table. These are issues that must be looked into, into in an integrative form and it may seem to be the direction if the government can legislate in a proper way. Otherwise the struggle against big business will continue. Small business will still be marginalised and they won't make any contribution by way of employing (unclear).

DR BORAINE(?): Can I just make a comment. In regard to your question, I think there's a certain level of maturity that needs to, that is needed because there are a number of issues on the table and it will take some time. Even if you look at many of these empowerment deals, you'll find that a lot of it is not as kosher as it seems. We see a lot of glorified managers running with some of these empowerment vehicles and they are not being fully empowered. So there is a kind of maturity and commitment that should start to come from the established business sector and help us to start to overcome some of these issues.

DR RANDERA: Chairperson, will you allow me one more question. I just want to take you back Mr Kongwane, and that's the history of the African Bank. Could you please tell us a little about the difficulties that were encountered in setting up this bank, the problems that you encountered as you operated as a bank and of course the bank went under in later years, perhaps you could even give us some information about that.

MR KONGWANE: Thank you . Mr Chairman, I just want to say the last mentioned point by my colleague here about wealth tax is not a canvassed position by Nafcoc, so it is an opinion and I want us to understand that. 

&#9;Mr Chairman, in 1975, in fact beginning 1974, the founding fathers of Nafcoc, attempted to create a bank for themselves, as a vehicle for economic empowerment. What we experienced those days, was that existing banks, and other financial institutions, created obstacles such as asking the government to raise the establishing fund and it took Nafcoc a long time before Nafcoc could in fact raise the kind of money which was asked by the registeral(?) banks. But Mr Chairman, after the bank was established, it didn't have a fair sail. I think it is noteworthy to say, we hoped that the banking institutions in South Africa were going to train our management people, and they refused to do that. But later in the years, when the African Bank got into trouble, I had a meeting with Dr Umsanyane and I asked him,

"What are the big banks doing and saying?'

and he said, I asked the then Minister of Finance, to ask the , and the bank was not in trouble really that time. To ask some big banks to help us with management, so that we could salvage the bank out of trouble. But he says, after a while this minister came back to say, these banks are refusing to lend us support and later 'cause the bank was under curatorship, and we were surprised to see some of these banks were interested in our bank, and this is how our bank was lost to us. Thank you.

NAFCOC SPEAKER: Can I just add that the market base of the bank is different from other banks, it was dealing with the poor. Operationally, it becomes difficult, whereas other banks had a combination of the upper class and then maybe the middle class, but the African Bank was mainly in the lower class. It became very difficult to collect, you find yourself in the pool of bad debts. I think it was just a problem and also, the question of management. You have a bank, you start thinking of the manager. Who is the best person we can bring to manage the bank? I think the African Bank was faced with that problem. May I say that, at the time, I mean it's not that it was only the African Bank, the African Bank, because of its position had no one to give its (unclear). But other banks which operated in a similar position, might have got some help from other quarters, but it was difficult for the African Bank.

CHAIRPERSON: Bongani?

MR FINCA: Thank you, your Grace. I've got two small questions. I feel that in your submission you deal very briefly with what you call regional government, I think it refers to also homelands. Homelands were notorious for a number of things, and amongst those were the manner in which the homeland attempted to restrict and even ban trade unions that operated. Your own membership which operated in the Homelands, did they in any way take action to oppose Homeland government in this endeavour? The second question is, on your vision. My colleague here, Hlengiwa, was telling me this morning that the business of business is making maximum profit. Does Nafcoc have another vision? Another vision of doing business in this country in such a way that you make profit but also promote a culture of respect for human rights? And are the members of Nafcoc, catching that vision and beginning to show a different way of doing business in this country?

MR KONGWANE: Thank you, Mr Chairman I will respond to the first question. I think the most notorious of these homeland governments, if I may say, were the Boputhatswana, and sorry, and the government of KwaZulu. In 1986 we had to deal with the question of sanctions. And Nafcoc had to take a stand. Unfortunately, at that meeting, Nafcoc took the stand that sanctions should go ahead. And some of our colleagues who came from Natal, were faced with problems when they went home. In fact, they did say at that meeting, that they knew they were already in trouble. We know that some of them were not even allowed to continue with business, some were disrupted in the way of murder. The other problem that we saw, was that alternative chambers were created. For instance there was the (unclear) which was an alternative chamber established precisely to destabilise Nafcoc. And of course there was also an alternative union, which was also established precisely to destabilise COSATU, and NAFTO and others. It was very difficult for our members in Natal to stand up and to say a word. They tried, eventually most of them and some of them who had guts, some of them were killed, some of them were imprisoned, some of them lost their business'. It was a vicious fight.

&#9;In Boputhatswana, the same thing happened. Any person who advocated for sanctions or aligned himself with progressive movement or ideas, had his business either stifled in a way or another, and of course, even there, they had what they called the 'Bofcoc'(?), which was a chamber to stand in the place of Nafcoc. It was very very difficult even for the people that were at the meetings. &#9;Our vision of doing business. We think that the time has dawned, that really as I have said in my preamble that time has come, we don't want to look to the past. We want to look to the future. But as we look to the future, we are really asking a big, and I want to say white business, to take hands with us, to help black business. You must understand, that sustenance of technology, management skills, apprenticeship and those things, were not allowed our people. We are talking now a three year independent period. In this period we have not had enough time to train our people properly and of course, you know that transference of technology to some extent, was government to government and our people have not had an opportunity to be trained. We really think that big business owe us a friendship, a time to share, a time to uplift our people, so that we might be in a position to be able to compete in global markets. Because until these big business' help small business', to be able to do business professionally and to be able to produce quality goods in the whole of South African, we'll not be able to produce.

NAFCOC SPEAKER: Just to add on, independent homelands. if you were a member of the organisation, that was defying the homeland operation. They had various bodies, like the liquor board, they've got their own petrol committees. People in the homelands, were not allowed to own the land. Now if you wanted to put like a service station. The trustee of the land, who would be the Development Corporation in that homeland. It means you identify the place, and then somebody would guarantee that money so that the oil company can use that, who would be the Development Corporation. For it to operate, you have to go through, the Homeland's Department of Trade and Industry. And there the committee would have to approve. So if you are not in favour of the policy, you will not be able to go through with it. The time, at the time that I was working for Mobil Oil, we interviewed people at Tohouyandou, who were suitable and we granted them the service stations. We were called and told by (inaudible) government,

"Take your own service station, take it at once back, remove it or otherwise I put my own person".

In Garankuwa, during Mr Mangope's reign, we were also called to come and remove the service station. Because we had granted each to somebody who was not a supporter of the government. Eventually, they had to put their own people. 

&#9;So this is how persecution of black business was pursued in the homelands. If you look historically at people who were running bottlestores, and service stations, the majority of them will be supporters of the government. Here in urban areas, the oil companies, in particular adopted a trend of dealing with community council. Because the first thing an entrepreneur should do is to identify the site. He would apply to the Soweto Local Council and if you are not being favoured, one of the councillors would know, would have inside information, he would approach the oil company that has got this site, the site that somebody has identified. The oil company would then go into cahoots with that councillor. I would not mention oil companies, but if you look at the statistics during the destruction in1976, there were two prominent oil companies which were at the end of the rail. Because almost, most of their service stations were owned by councillors.

CHAIRPERSON: Thank you. Hlengiwa?

MS MKHIZE: Thank you chairperson. I have two I would say related questions. The first question for me is, maybe we'll start with that statement. We have heard quite a number of people making statements to us, claiming that this local business, I'm not talking about the homelands, I'm talking about statements which have been made in the townships that local business somehow colluded with the police, especially in the identification and (inaudible) of young activists. I would like to hear your comment, that especially because when you started, you gave an impression, that, which, you gave an impression that you pursued a liberation struggle, that's page two of your submission, I notice that, in my mind I was saying, at the same time there is nothing which clearly shows that Nafcoc as an initiative was really significantly different from, than what other business' were standing for, at face value. Excepting that the way individuals who generally identified with liberation struggles. So that's my first question. The second one is, do you think that the new government should actively and conscientiously boost black, organised black business like Nafcoc? If your answer is yes, I would say, is that morally justifiable and a related one is that, wouldn't that create another black bourgeoisie? Those are my two questions.

CHAIRPERSON: I hope that you can answer them maybe fairly briefly so that we can go to tea.

MR KONGWANE: Mr Chairman, if you look at for instance, that happened at Kwandebele. At least 65% of all our business' there, were destroyed by the system. These are people, who really were standing against the government of the day. Actually, the Kwandebele Development Corporation claimed that at least 40%, forty million of the money owed by these people could not be recoverable. I will say to the honourable member of committee, in every situation you have traitors. We did have traitors, yes, but in the main, I want us to look at the historical perspective of Nafcoc. In 1964, when the leadership was thrown into jail, this is when Nafcoc was born and we bore the torch, I am really surprised that Nafcoc is not perceived or recognised as the people who bore the torch when nobody would dare speak, we would. And because of this, the house of the president of Nafcoc was burned and his uncle who was in it, died in there. And other business' were also destroyed, and some of us were thrown into jail also, because we did not agree with what happening.

NAFCOC SPEAKER: In fact I want to say this, Mr Chairman, quickly. In 1989, Dr Masunyane asked me to go to the United States to advocate (unclear), and there was an alternative chamber which was created by big business at the time. I remember I was on the fourth floor, advocating for sanctions, they were on the first floor ,saying no. And really if anybody says, Nafcoc was not on the fourth one, that surprised me. 

&#9; Well, should the government boost black business, yes, please. Because if you don't, we're the majority; the majority of business' must come from the majority of the people and if the majority of the people are not boosted, where is the government of the day going to get its taxes from? Forget the stories of Nafcoc and Madiba. You know, about tax amnesty, I'm talking about the future. And really I'm saying, when that happens, we'll be the taxpayers of the day, we'll be building the schools and the clinics, because we will have been boosted by our own government. Thank you.

CHAIRPERSON: Thank you very much for doing it so briefly.

NAFCOC SPEAKER: I was still going to add.

CHAIRPERSON: If you will add briefly.

NAFCOC SPEAKER: I'll add briefly. May I mention that the conference for democratic South Africa, which preceded the release of the leadership, was partly organised, Nafcoc was in the leadership that was organising for that conference. May I say that the question whether Nafcoc was pro or not at this stage, may not be very important. I think what is important is the way forward. What can the government do to ensure that structures are in place, that the aspirations of black business, in the interest of the nation can be achieved. The (unclear) of business' are changing. Some business' are becoming black because of the take-over and some of the people will testify here, are testified as blacks, but the sins committed were doing the time when the white business, the white owned business. 

&#9;I think the commission should assist by a way of, where, if big business, have to direct its efforts to help small business, how can they do that? How can we structure that relationship to ensure that they actually move forward in assisting black business. I mean if we don't assist black business, I will put it crudely, blacks will remain servants instead of also becoming employers of people in this country.

CHAIRPERSON: Thank you very much. It's been a very useful input and the exchanges we value (unclear). We do have to look at the past. It is a important ingredient in relation to what we are able to say of the present and of the future. Let us take a break for tea and resume at half past.

DR BORAINE(?): Are we done?

CHAIRPERSON: I'm needing to revise what I was going to say about Armscor because they have decided they are coming. So I will have Plan B, I won't use it. We would like to call the representatives of Barlow Rand please.

CHAIRPERSON: Mr Roshalt(?) will you please stand so that Dr Boraine administers the oath.

DR BORAINE: Mr Roshalt, welcome, it is very nice to see you. Thank you for coming and taking part in these hearings. Will you take the oath or the affirmation?

MR ROSHALT: Oath.

DR BORAINE: Dr Boraine administers oath.

MR ROSHALT: Mr Roshalt, swears to oath.

DR BORAINE: Thank you very much, please be seated.

CHAIRPERSON: Thank you very much. You want to, you have the floor as they say. No, it's the, it's the base. This base, yes, there you are.

MR ROSHALT: Mr Chairman, commission members, thank you for this opportunity of expanding on aspects of my submission of the 9th of October. As I mentioned a bit, my perspective is based on my experiences in the Barlow Rand Group, over 27 years which ended in my retirement in 1990. Together with my involvement elsewhere, in my personal capacity. In examining the role of business, leadership in the 1960 to 1994 period, I think it's important at the start understand, and with great respect, Professor Terblanche does not, that business can never be classified as a homogenous entity. It is made up of individual units, large and small, with many differing policies, objectives and characteristics. It must be remembered too that during the period under review, there was no such body as 'Business South Africa' which now articulates the collective business stance on certain issues. The policies pursued by individual units, differ too, in that they are influenced by the views and actions of their chairman and chief executives. An examination of the role of individual units of business, thus necessitates and understanding too of the beliefs of the senior executives of those units. 

&#9;Now my personal beliefs and policies, during executive service with Barlow Rand, from 1963 to 1990, were basically one, that a full democracy, as opposed to the limited democracy of those times, committed to non-racialism and a free enterprise system was not only morally right but inevitable. The question in my view was not whether, but when and how this could be achieved in the face of a powerful government determed it should not. Two, that there should be equal treatment and as far as possible an existing impediments, equal opportunities for every individual, regardless of race. Three, that the company had socio-economic responsibilities outside of the work place and four, that companies, and importantly their executives in their personal capacities, had to make every effort to contribute to national, political and socio-economic progress both directly and indirectly through collective business funded organisations. I believe incidentally, that this still holds and that business has a vital role to play, in helping government make the country work; in particular in passing on management skills to the new institutions. 

&#9;Let me attempt to relate how these beliefs impacted on the views expressed in my submission, but to add the provisor, that in the group as large as the Barlow Rand Group was then, there were inevitably, initially at least, certain individual managements, which did not necessarily pay more than lip service to them. Firstly then, the general question, did business benefit or lose from apartheid? No simple yes or no is possible. It is much too complex a question. Certainly it benefited in the short term, from a closed and uncompetitive economy, and on occasions from the absence of organised union waged pressures. But at the same time, it suffered from low productivity, primarily of course due to the apartheid education system, but also because of 70-80% of the population were denied participation in the national economy, thus severely restricting business' markets. On balance in the longer term, I would say business did not benefit. And the effects are still with us today, with South Africa globally uncompetitive and our national structures, particularly at local authority level, largely inadequate due in the main to a lack of practical experience and capacity building in the past.

&#9;Turning now to its role in changing apartheid legislation, and one should add in its encouragement of the achieval of full democracy. We did not believe, and would not either in the future if similar circumstances should ever unhappily arise again, that one could act successfully by directly contravening the law. Further the group did attempt to influence change in two ways: First of all directly in public statements. In my personal capacity I called publicly on many occasions, inter alia, for government acceptance of the fact that separate development had failed, for the removal of the Group Areas and Land Act, for the release of detained black leaders, for the cessation of forced removals, for black participation in central decision making, and for meaningful power sharing with blacks.

&#9;I very much doubt whether this made any great impact on government, but never the less the effort was made. And secondly, by supporting both financially and through the personal involvement of the executives, business funded organisations, such as the Urban Foundation, the Consultative Business Movement, the South African Race Relations Institute, the Legal Resources Centre and others. All organisations whose efforts were striking, at the very heart of government policies, and which were proving to government, that certain basic tenants of apartheid, were not only morally wrong but were not working either. I refer in particular, to such fundamental achievements as the governments unwilling acceptance of ninety nine year leasehold tenure for blacks in urban areas and the removal of influx control. Both of which I would remind you were brought about by business and not political initiatives.

&#9; Did business do enough to influence fundamental changes in the political dispensation? With hindsight, it may well be claimed that it did not. Certainly more companies and business leaders could have been involved in the effort. But in my view, it is very unlikely that the (unclear) government of the day, and its leaders, would have moved any faster than it did. Let me deal now with business' record in promoting fundamental socio-economic change outside of the work place. 

&#9;This was a much easier sector in which to operate, as there were no legal impediments involved. In fact companies could, except in instances where statutes were involved, act without any restriction at all. Barlow Rand as just as one example, and there are many, devoted a hundred and ninety million in its direct social investment programs from 1984 to 1994, principally in the educational field. It funded for instance, the setting up of trade and technical high schools, school training centres, and non-racial private schools. It supported the launch of a five hundred million rand joint education trust with its uniquely composed board of trustees of a equal number of business and black political educational and union representatives. Indirectly, it supported the work of collected business funded organisations such as the Urban Foundation, whose area of operation covered housing the low income group, both in policy formation and physical delivery. Educational initiative, both in practical NGO projects and in policy formulation aimed at the overall reform of the education system, in particular, the abandonment of segregated schooling. Community capacity building, and the promotion of small black business through the removal of statutory editions. In 1994, it participated in the launch of the national business initiative, which is engaged in formulating lower income housing policies, in particular, the removal of blockages to physical delivery. Improving the quality of education in public, primary and secondary schools, through encouraging effective governments by school councils. The creation of non formal employment and capacity building in local authorities, particularly in the field of financial management. The question can surely not be asked whether business as a whole, recognised its responsibility in addressing national socio-economic shortages. It may however, quite reasonably be asked, whether as a whole, it achieved enough. And with hindsight, I personally believe now, it did not. And that had it done so, we would have been much further along in coming to grips with a number of our national headaches, outside of the political arena today.

&#9;Turning to business' role in changing workplace relations. I'm really only able to talk about Barlow Rand's attitudes and performance. This is a very important subject, because with the government of the days virtual ban on any progress towards black political rights, the only area where any form of democratisation could take place, was in the workplace. And this is in fact what happened, with the labour movement becoming at that time an important channel for black political aspiration. The group formulated policies and implemented them in two ways. As far as it's own employees were concerned, in 1978 it was one of the first South African companies to produce a code of employment practice in an attempt to introduce and standardise acceptable norms in all its subsidiaries and operations. One, an undertaking not to establish or acquire business that depended on sub standard wages and employment conditions. This effectively prevented our investing in the homelands. Two, the recognition that freedom of association for all employees was a fundamental right. Three, the recognition of the right of unions, hopefully non-racial, to organise and bargain with individual group companies outside of the official system. Four, the acceptance of a completely non-racial basis of remuneration; and five, an undertaking to attempt, as far as possible under existing conditions, to ensure equal employment opportunities for all workers. The code was incidentally approved by the Reverend Leon Sullivan, as being fully upto the requirements of his own code for US companies operating in South Africa. It would be trite to say that this code was immediately and enthusiastically accepted by all group managers. But by constant effort and monitoring, it is I believe fair to say, in time it was.&#9;

&#9; And as far as its relations with organised labour was concerned, the position was understandably much more difficult. An (unclear) relationship between employer and employee of varying degrees of intensity at different times, was quite normal, indeed inevitable. Nevertheless, the group recognised in its code, that union recognition was a fundamental right for workers, that would have to be faced. As a result, the group was one of the first to recognise and negotiate with unofficial, unregistered unions, a move that was unsurprisingly unpopular both with government and a number of peer companies. As I have suggested previously, these tentative moves were the first manifestations of the eventual full democratic process and it is important to acknowledge again, they took place within the business working place and not the political arena. As I so closely followed Nafcoc's submission, I shall quote from my written submission on the groups' role in relation to the promotion of black business:

"For many years, business has made efforts to promote black, small black enterprise, as distinct from major black business which is now being promoted by empowerment fields, but it has to be accepted that these efforts, have to a large extent been unsuccessful. And one of the main reasons of being the (inaudible) of laws and regulations, most of which were discriminatory, that impede would be influenced."

Our efforts in this field were both direct and indirect. Direct involvement was initiated when in 1980, the company had agreed to take over part of the funding of the Small Business Advisory Service, whose aim was to council black businessmen towards success, so they could generate their income and as the business' grow, provide new viable employment opportunities for others. In 1986 in a 50/50 partnership with Nafcoc, and at its initiative, Barlow Rand set up Job Creation South Africa, which did much the same work as SBAS, but now in the forms of contracts with sponsors who undertook to pay a set fee for each new viable opportunity created by the clients black emerging business as they were counselled. Indirectly Barlow Rand supported the law of (unclear) project founded by Leon Louw and Professor Louise Taeger, which researched all legal impediments to black business and was successful in removing many from the statute book while getting some replaced by appropriate legislation. Nafcoc, for most of its existence had access to constant, unpublicised support from Barlow Rand, and there was a close personal liaison…

&#9;The end of the period I am reviewing, Barlow Rand added to the support, a very close involvement with Nafcoc's major affiliate, the National Industrial Chamber. Before hearing the commission' s views on my submission and attempting to answer any further questions, let me attempt to summarise my views.

&#9;As I read the request I received, the overriding objective of the commission, is establish as complete a picture as possible of the causes, nature and extent of gross violations of human rights. But I personally can perceive no definition of direct human rights violations, which could possibly be attributed to business generally, during that period. And that the underlying objective the commission has, is to gratify itself on the performance of business in the apartheid area, on both political and social issues. In relation, to the former, my view is that business certainly could have been seen to have been doing more. But whether that would have had any effect on a government determined to hold its mistaken philosophy and power at all costs, I very much doubt. In relation to the latter, economic and socio-economic, I've no doubt whatsoever that a great deal more could and should have been attempted and achieved and that had it been, our situation now, would have been a great deal more acceptable. I repeat too, that my belief is that this is an ongoing responsibility of business and that this is an opportunity for it to prove wrong those sceptics who do not believe business is part of the new South Africa. Thank you sir.

CHAIRPERSON: Thank you very much. Doctor Randera?

DR RANDERA: Mr Roshal, first of all let me say thank you very much for the co-operation we've received from your office and yourself in the preparation of the submission. I want to actually start with a very general question, that you yourself have perhaps taken issue with Professor Terblanche's submission, but what comes out very clearly as we've read through all these submissions, is almost a polarised view point. One the one side, a position that's been taken by yourself and many other business organisations, that there were rules, regulations, laws, a government that was very oppressive. On the other side, submissions from the trade union movements, from political parties, like the Communist Party, the African National Congress, the organisations that are representing black business; that essentially is making the accusation that business was very integral, was very much part of the culture of the time and I think that the underlying theme that we have in this whole period is a racist ideology based on a belief that black people were unequal to, were not equal to white people. Now it is within that context that I want to try and understand your own position, because when people say they were against apartheid, and you yourself has talked about going back to 1963, and having made statements against many of the policies of the government of the time. But it's this overwhelming culture that seems to emerge, that we'd like to understand and perhaps your own views on that.

MR ROSHALT: I think if I can explain, I was not disagreeing with Professor Terblanche's summary of the background over the century. I was disagreeing with his 'lumping' together business as one unit; and I detect even in your question to me, much the same misunderstanding of what business is. My only answer to you is, that I don't think you can find a common attitude towards apartheid, of all business units. There were certainly some, and Professor Terblanche made it very clear where he thought the fault lay, too were supporters. There were others such as my own organisation and myself personally who were not supporters. It is very difficult to prove that. I know that, I read the part by Mr Jay Naidoo, I don't know whether he's still here this morning, about COSATU's view of the implications that all business were supporters of apartheid. I would just like someone to tell me, what business could have done to change the political arena. No one has, there are general accusations, statements, that business generally, again I can't agree with business as general, was supportive of apartheid. What could it have done? Was business to break the law? That is the crucial question. In my view it was not, and as I said in my submission, if the circumstances arose again, unhappily in the future, where a government was interfering with human rights for instance, should business then break the law? Or should it try to remedy the situation? We are speaking now with a great deal of hindsight, but in those days, it was not so easy. I don't think that's the answer to your question. I don't have an answer to you question, Dr Randera.

DR RANDERA: Mr Roshalt, if I can take you forward and perhaps ask you more specific questions, and I want to actually go to the period, 1973 and the decade following that. The Minister of Defence at the time in 1973, formed the Defence Advisory Council

MR ROSHALT: Ja

DR RANDERA: And I understand you yourself were a member of that council. That period also leads us into that, the whole period of the total onslaught strategy, which in many, one of the basis of that strategy was to, was that, twenty percent of that was military and the rest was political, social and economic. Now, if someone who was opposed, as you so clearly said yourself, opposed to apartheid of the time, could we try to understand what the role of big business was, in the Defence Advisory Council, and what role they played if any, to change the climate that existed at that time?

MR ROSHALT: I can't help you here, because in fact, I was invited to be a member of that council, I went to one meeting at Voortrekkerhoogte and that was the end. It never got off the ground or I was never invited to participate any further. So I'm afraid, I'm not avoiding the issue, but I was not a member, I was not an effective member of that, for more than one meeting.

DR RANDERA: Can I take that a little further, than the, and just bring into the equation, the role of Barlow Rand itself in that whole military, industrial complex period. There have been accusations made that Barlow had a very close relationship in supplying the military, industrial complex with electronic equipment specifically

MR ROSHALT: Ja,

DR RANDERA: Could you comment on that?

MR ROSHALT: Yes, I think again, one has to go back to the, the conflicts of the time. The west had been engaged in a very destructive war against the totalitarians, nazism. When that contest was over, it was faced with a cold war against an equally totalitarian system as Russian communism. If you look at any country in the west, there were countries, there were companies which engaged in military procurement, and I see, and as far as we were concerned, there was no difference at that time, under those circumstances and Barlow certainly was in electronic procurement for the forces.

DR RANDERA: And would that have included breaking the UN embargo, if necessary?

MR ROSHALT: Yes, and as you know, there has been an ongoing, happily now concluded, legal procedure with, through Armscor, with the State Department

DR RANDERA: In the same vain, would you say it was (unclear), to Armscor at the time, was part of that same sort of thinking, it was more against Russian economy and yet they talk of communism in this region, rather than part and parcel of the oppression existed inside South Africa.

MR ROSHALT: Certainly at the time, it was the former. 

DR RANDERA: Thank you. I want to actually just come to Barlow's attitudes towards trade unionism. Many articles that I've read certainly talked about the enlightened policy that Barlow had but, there's also the attitude that there was a great deal of union bashing that went on from Barlows' subsidiaries in the eighties. Would you agree or disagree with that?

MR ROSHALT: I think that you've got to understand, that although, the main board of any company has to take responsibility for the actions, and they can't hide from them. Barlows at that stage was a com, was a group of well over a hundred operating companies, with two hundred and thirty nine thousand employees. So that for anyone at main board level to be in touch with every single action that took place, in those operating subsidiaries, it would be virtually impossible, that's the background. I haven't heard, of any union bashing. I give you our philosophy that we were one of the very first companies ever, unpopularly to recognise unregistered trade unions. My memory of the problem of those days with the unions, was not bashing, it was the dispute which continues now between negotiating at plant and operational level, rather than, as the unions wanted, at central level. And we were right. How any negotiation could take place at central bargaining level, when you had a hundred diverse business' with diverse policies, not policies so much as diverse interests and trading, I still don't know, but Dr Randera, as far as bashing is concerned, I was certainly unaware of that and I certainly wouldn't have allowed it.

DR RANDERA: Mr Roshalt, can I ask another question on the role of unions, during that period? The eighties of course saw, a number of states of emergencies declared, by the government of the time. Thousands of trade unionists were arrested during that time. Did Barlows have a policy in supporting those trade unionists who were arrested, or their families during their detention. I know a number of groupings who talked about being against detention without trial, but I haven't come across anybody talking about the support that may have been given, to individual trade unionists during this period.

MR ROSHALT: I wouldn't know. I honestly can't answer that question.

DR RANDERA: Okay. So my last question in relate, I understand that there was a period in the eighties where you shared an informal grouping of business people that represented, I understand, something like eight hundred thousand workers between them, and that these meetings then took place between you and the government of the time. Could you perhaps tell us what discussion mainly took place?

MR ROSHALT: I'm not aware of that.

DR RANDERA: You're not aware of that?

MR ROSHALT: I'm not aware of that.

DR RANDERA: Okay, thank you very much, I have no further questions.

CHAIRPERSON: Thank you very much. Russel and then Mtu(?)

DR ALLY: Mr Roshalt, let's concede the point, that there were laws and there were the government that was obdulate, your word, and that you doubt whether business could have changed, or influenced in any serious way. The point you made; but what I find difficult then, is how do you reconcile, this government that doesn't want to change, that's (unclear), that's imposing this immoral political order on the country and yet your company, Barlow Rand, by the eighties, the period of the worst repression, which was inside the country, not outside, is the leading local supplier of arms, to Armscor, used precisely to bolst and strengthen this government you say doesn’t want to change. Now how do you reconcile that? That you want the government to change, but you supplying them with arms that enstrengthens their position and makes it almost impossible for them to change.

MR ROSHALT: I think it's in the nature of the armaments. We, as Dr Randera has said, the, our main occupation was within avionics and telecommunication equipment. And that can never be termed repressive.

DR ALLY: Do you not concede the point that the military might (unclear) that the government actually had, would make it more (unclear) and make it more unwilling to change, the (unclear) actually feel, it is military to take not only the people inside the country but also anyone else. Does that not, is there not a direct relationship between that military strength and wanting to hold on to political power at all costs in a system which you said you opposed?

MR ROSHALT: I can only repeat that I don't believe that you can repress people with avionic equipment.

Mtu: Thank you. Mine is the comment with regard to the initiative that you have correctly referred to where Barlow Rand was in the forefront. But I just want to put to you, of the vision that is held by many people that such initiative, do not seem to demonstrate genuine commitment to the cultural human rights, by the business sector. They tend to be a reaction to the (unclear) threat where (unclear) the then oppressed communities were expressing their feelings. For example, you have made reference to a ( unclear) foundation, and some people link a (unclear) foundation to the Soweto uprisings, that were it not for the Soweto uprisings, the business sector would not have come up with this brilliant idea and that questions the motive behind, that initiative. You'd go on and included the representation of the workers at the workplace, the democracy and that, would it not perhaps for the say 1973 strike

MR ROSHALT: Sorry, what was that last one?

Mtu: The deaths in 1973 strikes, and the workers would not have been given the opportunities to organise themselves etcetera, etcetera. The significance of this observation is that it challenges the commitment of the business sector to the culture of human rights. Were it not for these (unclear) rights, would the business sector have done anything, or they would have quietly continued with the business as donors in the (unclear)?

MR ROSHALT: I think that's a very rhetoric, rhetorical question. I can say yes, you can say no. You are questioning the bona fide, the personal bona fides of businessmen and that's something I can't answer. Certainly in my own case, I would take exception to that.

CHAIRPERSON: Thank you, and Bongani?

MR FINCA: Thank you your Grace. I'd like to just ask a question, after listening to your submission, I'd like to hear your comment on,what do you think, any of you have led to this situation in which we find ourselves in this country , where a minority, mainly whites, (unclear) of our society, happens to live in luxury, when the majority, mainly black, section of our society live in poverty. Did this just come by accident?

MR ROSHALT: No, it's historic. It's the depravation of education, and opportunity which are exactly the things that we were trying to fight against in certain sectors of business. It's clearly that. There's no question of inequality of ability, it's inequality of opportunity, and that will continue for some time yet.

MR FINCA: In the light of the very outstanding record of very enlightened, workplace performance which your company pursued, looking at it presently, what percentage of your senior management level consists of people who come from previously disadvantaged communities?

MR ROSHALT: I must remind you that I retired in 1990, and that I retired as Chief Executive in 1985, (unclear).

MR FINCA: Could I just get it, the position as at the time of your retirement?

MR ROSHALT: My memory isn't as good as that. I wish it was.

CHAIRPERSON: I think it's probably difficult, I know being slightly older than Bongani, what your memory can do. I sympathise with you. Thank you very much Mr Roshalt.

MR ROSHALT: Thank you

CHAIRPERSON: I don't think we have any, oh, there is one here. Dr Boraine?

DR BORAINE: Mr Roshalt, I want to try and pursue in a slightly different way, the question raised by one of my colleagues, and that is, I think and I'm not sure, we haven't consulted, that the burden of his question was that, business acts in accordance with its self interest. As I think most people do. You accept that? Agreed?

MR ROSHALT: Yes

DR BORAINE: I think therefore that when the question is asked, would business have responded so dramatically and urgently if it were not for the disastrous events of 1976 in Soweto, not to impugn the goodwill of business but simply to make a point, that in many instances, if one looks back, one reacted to outbursts which simply could no longer be ignored and therefore tried to do something about that. Would you say that that was a more true reflection of that?

MR ROSHALT: I think that that's fair comment. Again I think you have to distinguish between the individuals involved, but there's no question that business acts in its own interests. And I think that the end of apartheid came when business and other people realised it wasn't working and that it was actually detrimental to the future of the country and to business interests. So, I have no problem there, I detected a generalisation that all businessmen, have to be prodded before they move. I don't agree with that, but I think there are a lot that do have to be prodded.

DR BORAINE: Ja, I would say that in most instances, not merely the business community, South Africans as a whole, perhaps world wide, we seem to need some kind of prodding. But let me follow that up with a question, which is, I think what we're looking for. I'm trying to understand business generally, whether it be individual companies or overall organisations, normally talk about the forces of the market and that one has to be responsive to the market. I can understand that, I think the present government is beginning to use similar language. But there are people in business who would, concede, and I'd really like your comment here, because you've been in business a long time, and I know something of what you personally have been trying to do over the years. That the market doesn't have a conscience. Now if that is true, then I think a lot of the things that you and your company were doing, suggested that, over and above the dictates of the market, there were initiatives taken. There are those in South Africa today who say that because the market doesn't have a conscience, that government must be that conscience, and therefore must be the 'midwife' if you like, to bring together capital and labour in order to make sure that there is that conscience. I hope I'm making myself clear, because what I would really like to know is, how do you see it yourself? What is the, and I think,you know, all of us, there's a unfortunate linkage between wealth and poverty with whites and blacks. So it becomes a racial category. I'm not saying its uniform, but the whole question of, how does business do business, which is perfectly normal and justified, in a situation where the vast majority of people are getting poorer and that means a real threat to business, let alone the moral obligation. Is there a conscience somewhere, is there a directive somewhere which says, we simply cannot allow business to go on as usual, there must be some other initiatives. If so what are they, in your view? And I'm looking to the forward now.

MR ROSHALT: I think that's a very difficult question to answer. Look, my personal belief is that, business' main operation, main reason is business market. But I think it has to be done as I, I hope I have instilled into my own group, with a social conscience, with an understanding that you're saying, I don't think it's for government to teach us that. I don't think government is capable of doing so. I think it's a question of business operating in a proper social sense, making maximum profits, which are taxed by government, and it's for government to do the redistribution thereafter. That is a very general philosophy, but I would stress that there are ways, of conducting business. Relationships, with workers. Support, as I have just been trying to tell you, of business funded organisations which are in that field, the urban foundations, whatever views the commission might take, did a tremendous job. The National Business Initiative at the moment, is constantly being requested by various ministries to come and help, particularly in capacity building, in trying to sort out the absolute chaos in local authorities at the moment. That's where we can do it as well, but I think to temper business and its main operation of producing the profits, that produces the taxes, which the government then decides in it's wisdom how to use, I think that would be wrong.

DR BORAINE: A final question, if I may, chairperson. Because this is what I was trying to lead to. What is your response to Professor Terblanche, and you will agree that it is not unique to him. There is a lot of discussion taking place, in other countries who have moved towards a new democracy, after long years of darkness, if you like. About the whole question of a once-off, or a stretched out wealth tax along the lines you're suggesting that taxes are therefore there to be able to be used as a corrective to the situation?

MR ROSHALT: I am entirely against it. And I don't know how you would define beneficiaries, how you would define the victim. I think that business must pay its taxes and the government in future must do any retribution it requires from those funds. I do not see that there could be any equity in arbitrarily fixing .05% I think you said, of anyone over two million rand, that's my personal view.

DR BORAINE: Thank you.

CHAIRPERSON: Thank you very much. You may stand down. We are running just a tiny bit late. We want to call SACCOB.

CHAIRPERSON: Do we congratulate you, (name unclear), on 

SPEAKER: Humphrey

CHAIRPERSON: Humphrey, sorry, on your presidence. We do congratulate you. You're being a little stiff, why don't you give him a small clapp. Thank you very much. Are you all going to chatter?

SPEAKER: Speaking Xhosa.

CHAIRPERSON: Speaking Xhosa.

DR BORAINE: Welcome gentlemen, are you all going to take the oath or affirmation?

SPEAKER: Affirmation

DR BORAINE: Affirmation, anyone else? All the oath apart from Mr Middleman, so I'll ask the four of you then to take the oath.

Dr Boraine carries out oath.

SPEAKERS: All take oath.

DR BORAINE: Thank you very much and Mr Middleman, please be seated. 

Dr Boraine carries out affirmation

MR MIDDLEMAN: Mr Middleman takes affirmation.

CHAIRPERSON: Thank you very much, we are at your mercy.

MR KOZA: The chairperson, Mr Tutu and members of the commission, I'd like, at the outset to introduce the SACCOB delegation. I have on my right hand side, Mr Phillip Kawitz, immediate past president of SACCOB; Mr Hans Middleman, a past president who was president of the previous ASACOM in 1960; Mr Les Whiel(?), past president of SACCOB; Mr Raymond Parsons, director general of SACCOB and of course myself, Humphrey Koza, in my new capacity as president of SACCOB.

&#9;Some of you may find it ironic that you are listening to me, a black man, introducing the SACCOB submission. After all, many see SACCOB as the business establishment, an establishment which, although I believe, rapidly changing, is still overwhelmingly white. The fact is that +, I would not be here, if any of my colleagues here had the slightest inclination to defend the actions, the attitudes and the practices, which individual companies, and commercial concerns or individual business men and women actively showed up the apartheid regime. Enthusiastically endorsed its policies or profited directly from the suppression of human rights. That there was such companies and individuals, is undoubtedly true. But I do not believe, it is true for all business' large and small who were and are, the bedrock of the chamber movement, and who supported the decisions, outlined in the SACCOB submission.

&#9;This, chairperson, is an historical occasion. Therefore, not only,, for the TRC but also for the South African Chamber of Business. I would like, chairperson, when we've completed the question and answer section, to make a statement about the future. I would now like Mr Raymond Parsons, Director General of SACCOB to make the opening statement on behalf of the organisation..

CHAIRPERSON: Thank you. Please, Mr Parsons. 

MR PARSONS: Chairperson. Our hope is that through the combination of our oral and written evidence, we will provide the commission with a better understanding of the role played by the Association of Chambers of Commerce and Industry of South Africa, known as the previous ASACOM and the South African Federated Chamber of Industries, FCI, during the period 1960 to 1994. And of the dynamics at work within the business sector and within organised businesss. 

&#9;SACCOB statements today, is an attempt to highlight and to expand upon the key elements of our written submission to you. We welcome the opportunity of an exchange of views with the commission, not in any spirit of dogmatic assertion, but rather as a part of a sincere effort to share experiences of an apartheid history. We need to share our realities. At the outset SACCOB would like to affirm again, it's point of departure, as also made by Mr Roshalt, and in our written submission, that there's no single business story of the period under review. It is therefore to be expected that with the inter action of race and business over the years, there would be a differential pattern of response from business, which would depend upon a variety of economic, social and political factors. The proof of this, is likely to be evident in the diverse submissions which this commission will have received from the various organisations and companies. Within this diversity, business associations like the previous ASACOM, FCI, and the current SACCOB, and others, have sought to create the maximum consensus on , on policy issues of the day, for their respective memberships. 

&#9;Because of this, it is impossible to suggest, as some have tried, that there is a collective culpability on the part of the business sector. The fact which has already been referred to, but which we would like to emphasise again, is that business is not (unclear) and that is also the reason, chairperson, why we decided in our submission, that we could only address, the respective views and the actions of the chamber and its predecessors and we could not claim to speak on behalf of any individual companies or on behalf of any other business organisations. What FCI and the old ASACOM and SACCOB could do therefore, in the past, apart from engaging the government of the day on its policies, was to provide leadership for those business' who were willing to follow it. It was possible to pursuade, but not to impose the universal point of view on business. SACCOB. Chairperson, would also draw your attention to the fact that South Africa, did not, and indeed it does not, make provision for a corporate vote. And that the combined membership of the respective organisations, made up a relatively small percentage of the electorate. 

&#9;In any case, such organisations all over the world, cannot be involved in party politics, if they wish also to have influence over social and economic policies. As a result, chairperson, the leadership of these organisations, that had to rely on persuasion, both of the authorities of the day and their own membership, in order to bring about the removal of the apartheid laws and provisions. Other forms of protest and pressure were discounted, because they were likely to damage the economy or, because they threatened the unity that exists in organisations such as SACCOB and its predecessors, because of their voluntary nature. The leadership had at all times, as you saw from our written submission, to carry its membership with it, in espousing those points of view. That point of view was as follows, and I want to refer in particular of course to the previous ASACOM and FCI, which cover the bulk of the period that we are addressing, held the view that apartheid was a violation of human rights and was economically unsustainable. They believed it would eventually collapse under the weight of the demands that were made by rapid economic growth. Obviously this view was based in large part firstly, on a self interested desire to ensure the survival and growth of business' and secondly on a real experience on the effects of the restrictive provisions of apartheid legislations and policies. The human costs and economic costs of apartheid were unacceptably high, it was an artificial and intolerable political, social and economic system which was destined to fail. As a consequence, chairperson, the anti-apartheid motions, policies and the actions listed in our written submission were adopted by those organisations, that is ASACOM, FCI and subsequently SACCOB, based on a four-pronged strategy.

&#9;First was oppositional, which required saying, 'no' to what the previous government was doing, of criticising it and seeking to influence public opinion. 

&#9;Secondly, - that was exploratory-, which indicated a preparedness to co-operate with and expand upon, government reform initiatives as they unfolded. 

&#9;Thirdly, - that was innovative-, which encompassed the formulation of new policies, looking at the sphere of economic restructuring and constitutional reform and finally, as part of the four-pronged strategy, chairperson, a defensive, if you can call it that, a defensive strategy which included being against violence and the violent overthrow of the state and being opposed to the imposition of the economic sanctions.

&#9;In the light of the constraints under which they operated, including the limitations of a highly confrontational approach to the government of the day, the organisatios adopted a strategy of engagement, that included of large number of meetings, with the members of the then government. This was an ongoing process, which we believed did offer some prospect of success in changing over time, the views and the attitudes of the ruling government. At the same time, these organisations, nonetheless often incurred the wrath of the then government for their views. Against the backdrop of mass actions, strikes and marches, this engagement strategy employed by these organisations, may well have been interpreted as something akin to complicity. That we submit chairperson, that engagement is not complicity and is pursued to this day by the present government, through structures such as Nedlac (?) and similar bodies. The organisations took review that engagement offered a prospect of being able to change attitudes over time. The opposition of the FCI and of ASACOM in particular, to the phase of economic sanctions, was entirely consistent with their earlier view on economic growth, forcing the eventual, the basic collapse of apartheid in due course. Clearly there was also a deep concern, chairperson, that, that sanctions would undermine the growth potential of the South African economy still further and would directly threaten job creation and the survival of many business'. 

&#9;I come to the question, chairperson, could SACCOB and its' predecessors have done more to end apartheid sooner? Or to ensure that it was not legislatively implemented in the first place? And as Mr Roshalt has said, with the benefit of hindsight, it may well be said that the enormity of the apartheid system, required stronger responses from business on certain key issues. In retrospect it is always possible to have done more. SACCOB accepts and has always acknowledged that apartheid did great damage to the human dignity of the majority of fellow South Africans. If there were companies or individuals operating under the umbrella of the ex ASACOM, the ex FCI, or the current SACCOB, who acted in violation of often stated positions of these organisations, regarding fundamental human rights, then this is of course a matter of deep regret to us. The written submission can only set out, chairperson, what ASACOM, FCI and subsequently SACCOB, sincerely believe was their pro-active role during the apartheid era, within their respective spheres of influence to change an unacceptable situation. Thank you chairperson.

CHAIRPERSON: Thank you very much. You want the questions?

UNKNOWN 1: Questions and answers time.

CHAIRPERSON: Questions and answers, thank you very very much. Hlengiwe, I guess you are the inquisitor.

MS MKHIZE: Thank you very much chairperson. I've just learned something today, that business was not only about business but also, it's a mans' world. Okay, come to a specific. That comment was made in all seriousness. Coming back to specific questions, in page three of your submission, right in the beginning you talked to a very very important policist

&#9;In view of what was said this morning and I would like your explanation of that, the statement which was made that, business in general, collaborated with the government and in particular with the total strategy; and therefore, should be held responsible for gross human rights violation, especially the submissions from COSATU, Professor Terblanche this morning, clearly doesn't want to differentiate between English and Afrikaans business. So I would like your comment on that.

MR MIDDLEMAN: Chairperson, I happened to be the originator of that 1960 statement. In 1960, I was, I became president of ASACOM in '61; for the year 61, 62. But I was the president of the Chamber of Commerce of Cape Town, 1959, 1960. And I've got here the dates which I've just reaffirmed from my diaries that on 21st March in '60, there were the Sharpeville and Langa riots, Langa affairs. On the 24th March, I was to have chaired a luncheon with Dr Norville, who was then the, whatever he was (unclear). Instead of that I met in 19, on 21st March '60, an ANC delegation. And then the state of emergency happened. In April, we drafted the Cape Town Chamber, this statement, substantially; the statement that heads the submission. It was taken together, it was taken to the Cape Town Chamber of Industries and we had a famous joint meeting on the 12th May where the Cape Town Chamber of Commerce and Industry, the two chambers, (unclear) the other sides collaborated, confirmed the statement. It was then taken to the ASACOM executive meeting which was (unclear) here in May 1960 and ASACOM accepted it as it's policy and have never repudiated. Now if you would kindly refer to the annexure to the ASACOM statement, you will see that, unfortunately it is far too much to read, but if you look at the 1960, where the resolution is stated again, then over to 1969; and we're speaking about ASACOM as SACCOB now, as an organisations. We are talking here for the organisation. There you see under the heading ' Bantu Laws and (unclear)',

" congress - that is the ASACOM congress - is opposed to the stated intention of the Minister of Bantu Administration, to introduce during the 1970 session, an amendment to the Bantu Labour Act designed to permit the introduction for (inaudible) upon the employment of Bantu in any particular area and any particular category of employment." 

So here we made a very clear statement, we didn't agree, we wanted government to change it. Now if you go further down to '73, we said,

"You must review all restrictive legislation and policies which act as an artificial barrier to the horizontal and vertical mobility of such labour in South Africa."

Now you go to 1976, I'm giving this, as a consistency of ASACOM statement. In 1976, the words 'fundamental human rights' appear in ASACOM's statement. 

"Under socio-economic conditions, convinced that the future, well-being and prosperity of the Republic of South Africa, depends inter alia upon recognition of the defective presence of all her people, their fundamental right, their economic inter dependence and their actual and potential contribution to the economy and quality of life in the country. (unclear), then C, the evolution of a stable and contented middle class of all races with the vested interest in the well being (unclear)".

Here is a further statement again,

MS MKHIZE: Exuse me sir, if I may interrupt you, the reason why I even referred to this policy and many others is really because there's this tension between good policies and the problem, the perceived problem of racism. And general complacency of organised business. So the policies are really good, but on the other side, one cannot explain, the prevalent pattern in real practice.

MR MIDDLEMAN: There was an authoritarian government under which we had to operate, so all we could do was to go against the perceived perception, to make it clear that we did not agree with it.

SACCOB SPEAKER: Chairperson, if I may expand upon that. The process of motions at congress' , reflected the collective opinions of the vast majority of the members. The implication was that there was general support for the principles. Many of the individual chambers then tried to ensure that the principles were carried out at various levels. There were documents, like for example, the Cape Town Chamber of Commerce was manifesto for change, where we went out to companies and asked them to sign declarations foreswearing all forms of discrimination, wages employment etcetera, within their ranks. So there was indeed an attempt on the part of business, of organised business, to try and encourage our members to follow the policies which we believed were morally correct, economically sustainable and politically expedient.

SACCOB SPEAKER 2: If I can add chairperson, the following on from the resolution that congress'. Inevitably there would be contact between the office bearers, or appropriate committee members within SACCOB or its predecessors, interfacing with members of government and those interactions were reported to the membership. So it was inevitably an ongoing process of endeavouring to change their mind sets, to accord with the resolutions taken at the congress'.

MS MKHIZE: If I may. Okay a related question would be, is the issue of government contracts, did it interfere with your liberty or desire to, for instance, promote black leadership within their company? Would you have lost some of the contracts, if you actively made sure that there was black leadership within SACCOB, which inevitably impact positively on all the community, especially the black community?

MR PARSONS: If one refers to page 37. 1985, the reform process in South Africa, motion. What one talks upon the part of the motion, supporting the need for political reform in South Africa but believing that securing a new constitutional dispensation to accommodate blacks in decision making structures up to the highest level, has now become a matter of great urgency, etcetera. 

&#9;The third point is, it urges that the private sector should play a constructive role to facilitate a process of mediation and political negotiation. It actually urged the members to play that role. I can say that I attended delegations with government, aware of the fact that there could be actions against those of us who identified us with a cause which was not government policy, I don't think that ever deterred certain of our members. To speak individually for all of them, I could not do; but I can say that certainly those involved in the movement, took great steps to ensure that the principles were put above profit.

MS MKHIZE: I would really repeat my comment that I, one cannot fault you, based what is on paper. It's just that there are question marks regarding the reality, the development of the company. Another question that I wanted to ask, is, whether SACCOB actively opposed the apartheid laws, besides those which interfered with your own immediate business interest. I'm just thinking of other laws like detention laws, the influx control laws, pass law, all the laws which didn't interfere with your immediate interests?

SACCOB SPEAKER: The answer, and I'm sure Hans Middleman will expand upon that; the answer is unquestionably, yes we did oppose those laws. I refer you to page 38, 1986 motion. 

"Bring about change in South Africa, after the preamble, make a commitment to the abolition of all the main and discriminatory measures including the Group Areas Act. And as part of the ongoing process of reform, take immediate steps to open all areas for business etcetera."

We specifically spoke out against areas, like the Group Areas Act. We spoke out against detention without trial, without question we spoke out clearly on those matters. And we spoke out about issues which we felt injured our fellow South Africans in many areas. We were not popular for our views. Certain of us received death threats and other abuse. I can honestly say, your Grace, I believe that within our ranks, were a number of sincere people who did what they could, within their own constraints to try and oppose the system. That perhaps we did not do enough, Raymond Parsons has already eluded to. That perhaps we acquiesced to behaviour which we should not have acquiesced to, one has to acknowledge. We did not expel the member who refused to sign a charter for change, perhaps we should have. We tried to encourage people to be part of the process. But there was a sincere desire on the vast majority, on behalf of the vast majority to try and build a moral structure in our country, with which we as business people could live.

MS MKHIZE: And just another specific question. On page 18, of your document, you submit that you were critical of detention without trial of trade union leaders. I would just like to know whether there were any actions, which were taken to object, or oppose repressive security measures by a strong body like SACCOB?

SACCOB SPEAKER: I can attest personally to meeting with cabinet ministers where we specifically requested trade union leaders to be released, where we requested and in certain cases were successful, in obtaining the release of ANC and SWAPO members, to try and encourage us, to try and encourage the government to enter into discussions with these people. I met with Minister Chris Heunis at the time, I was in his office when calls were made to ministers of police. We were successful in getting some of those people released. We met clandestinely in people's homes and we did definitely actively, obtain the release of people. Our view was that you could not change the minds of people by locking them away and throwing away keys. Our view was one of constructive engagement with people, to try and interact. I have to say that in those meetings, we found that view to be correct. We found people who felt that they were polarised. Suddenly finding that we had commonalties and common aspirations and yes, we did definitely play an active role in that area.

MS MKHIZE: We also have this tension where Nafcoc contained that SACCOB did not permit black business to be members of SACCOB; and SACCOB on the same time, page four, submits that it never excluded any business on the basis of race. I just want to ask whether, did SACCOB open its membership to black business' and if so, what did SACCOB do to protect those business' for example against the Group Areas Act, which prohibited black business in white areas.

MR PARSONS: Chairperson, perhaps I can just confirm that statement is correct. That the previous ASACOM had no barriers in its constitution, to in fact membership from all race groups. And I just mention that in regard to the reference earlier, to Dr Sam Motsonyane. In his period as president of Nafcoc, I recall that when I was with the old ASACOM, there was a very close working relationship with him. In fact the South African Council of the International Chamber of Commerce, appointed him as there chairperson in 1974, and that was one of the results of the co-operative relationship which we had with Nafcoc during that particular period.

CHAIRPERSON: Last, oh you wonderful child, thank you.

MS MKHIZE: Just to, a last question. We heard this morning what Professor Terblanche said, he made a strong call, that social justice demand that those who have been the beneficiaries of the power structures of white political supremacy and racial capitalism, have a responsibility to make a substantial sacrifice towards those that have been the victims of those power structures. I would like to hear your comment.

SACCOB SPEAKER: Chairperson, I believe that our record stands proudly before us. I believe that we have consistently shown that we did not support the system of apartheid. I believe also carefully set out in our document, chapter and verse, is the fact that apartheid was not economically beneficial to the country. We heard Dr Roshalt say, earlier, that in many cases, business acts in its own best interests. Perhaps one of the reasons why so many of us opposed apartheid, was it was not in the best interest of business. Many of our business' would have performed substantially better, had there not been apartheid. Apartheid robbed our people of education and talent, and that denuded our business community of the ability to compete effectively. Under sanctions this country was raped by the exportation of raw materials which still continued whilst we were unable to add a human content to add jobs. Jobs mean more consumers, more consumers mean a growing economy. In every way, just as there was tremendous sufferance's, by people of colour, just as there were greater sacrifices and greater inconveniences by people in unions, business itself did not prosper under apartheid and our document sets out some categoric evidence of that fact. 

&#9;We believe, that taxes; the high level of taxation that we have in South Africa at the moment is in effect, the price that we are paying in taxation for the sins of the past and we believe that that system of taxation should be used constructively to build a better future for all South Africans. We would be opposed to a special taxation in the form of a reparation.

CHAIRPERSON: Thank you very much. Alex, very briefly.

DR BORAINE: Just a couple of questions. When SACCOB and its predecessors decided that one of the ways in which to try and bring about some change was to move towards constructive engagement. It's not an exact parallel but, that was a very similar decision taken by the state department of the United States of America. As a direct result of that, the majority of people in South Africa were extremely critical of the United States because they saw in this constructive engagement, collusion. Rightly or wrongly? It seems to me that one of the reasons why, the overwhelming black majority in South Africa still talk in terms of the submissions made to us and in general, statements made to the media, saw business as it were, in bed with government; that's a phrase I'm sure you've heard many times, may have flowed from a perception that powerful interests and powerful white business in particular, were seen to be in constructive engagement with government. Looking back, were there downsides to that as well as the opportunity to tell government what you thought was right, and what was wrong?

MR MIDDLEMAN: Chairperson, may I answer this in a different sort of way in the first place. Your commissioner, your fellow commissioner, asked about, did we do anything about the doing away with the restrictions which were on coloured people to work. And I heard this morning you asked, Mr Roshalt, did they have any black managers and he had to say he couldn't remember. (unclear) as well to go back to reality and the commissioner asked about the reality of the situation. The reality of the situation comes out on page 36, in 1981, bottom half, when Africom urges the government to repeal existing legislation which prohibits the use of black, coloured and Asian managers in white owned business in white urban areas. So that was the reality. Now, by pure chance, when I was in the SACCOB offices a while ago, I found on the walls, this cartoon. This is 1977. There sits MC Botha with whom I negotiated, I was at this interview. MC Botha and Piet Koornhof. They were gazetting them a new registration, a new thing, where they said,

"Sales personnel and office personnel must be white"

and we argued with this dreadful man MC Botha. And I had Hymie Wolf (?) of Woolworths with me, and the minister said, you must take a colour, he said to the minister

"Minister, your wife can't buy at our store, Woolworths in Pretoria, because we haven't got any salespersons. There aren't any white ones available".

So then he said,

"Then you must take coloureds"

Whereafter Wolf said,

"Well , I've done that, there aren't enough coloureds either"

And as a result of that interview, that thing had never become legislation and you will see hear on this cartoon, I was quite surprised to see this now; there sits MC Botha,his got a (unclear) 

"No black managers in white areas"

and here is ASACOM, powerful; well , we weren't powerful unfortunately, saying,

" Think again"

Chairman this is just an example of the reality of the situation at the time. A political totalitarian government that with which we had to cope and keep our employees busy.

MR PARSONS: Chairperson, if I could perhaps add something to, I think quite an important question which Dr Boraine has asked. I think in all interaction between business and a government you have to decide on the mix between public and private pressure. This mix changes over time, and the skill lies in knowing what the right mix is. The price you pay for too much private pressure, is precisely the point he makes. Doing good by stealth, has its cost, you can't actually reveal it. It gets lost in the system, and only the inner circle know that that work was done and it might or might not have had some results. So I think the point is taken that if you are also using private pressure, there is a downside. The downside is that you're not ever in a position to say,

"You see, I got that headline, I really attacked the government in the Rand Daily Mail"

as it then was or in the Cape Argus. I think that's a perception hopefully, some of the discussions at this commission will help to correct or to create a perspective about that balance between the public pressure and the private pressure you had to use in order to get change.

SACCOB SPEAKER 2: I think overlying that, if I can also add a comment to Dr Boraine's question, which follows on from which Mr Parsons' has said, is that clearly business operates within an environment and the forces of the market are as great on big companies as they are on small companies, but it is the small companies, generally, who are struggling for survival; and many small companies, many more small companies fail than succeed, so the pressures in establishing business' and therefor establishing job opportunities are enormous and one is forced virtually to operate within the market conditions at a point in time. 

&#9;Clearly one's strategy to some extent is dictated in a reactionary kind of way as conditions change and as the environment changes, very often the political environment of course as well.

CHAIRPERSON: Your last question.

DR BORAINE: Mr chairperson, could I ask you publicly, are we going to finish at lunch time or are we going to continue this particular discussion afterwards.

CHAIRPERSON: I have a concern, now I don't whether we're going to be able to pursuade, you see we are now two submissions in arrears, if we don't complete SACCOB now and ask that Old Mutual and Eskom and the others please, (unclear) indulgence as they say. You're unhappy?

DR BORAINE: No, I'm not unhappy, this is a very important delegation representing a large measure of business, but I don't want anybody to feel that we're cutting anybody short. I also know that the new president wants to make a statement of intent for the future, but I have two, I've just thought of another

CHAIRPERSON: You are a nuisance man,

DR BORAINE: (unclear) questions.

CHAIRPERSON: Can I find out from Old Mutual, Eskom, Armscor, Fabcos, whether you will be willing to, for us to be fairly African and instead of say half past four, if we went on to say five o' clock.

UNKNOWN: (Unclear)

CHAIRPERSON: Thank you very much, that is the democratically arrived at. Maybe then, because Humphrey

DR BORAINE: I have one question, only one more question.

CHAIRPERSON: You have one more, no you said two.

DR BORAINE: Two, but they are very quick, I'll do them now if you like. 

&#9;Two questions, please, the one is and is not meant to be a loaded question, but it is a pretty tough question, but we are here to ask those questions and that is that certainly some business people, I'm not saying directly through organisations at every point, colluded, and I use that word (unclearly) with the national management security systems; and some actually served on joint management centres in different parts of the country. Now that's a fact. Now, it is alleged, in submissions, that there was at times a link between business and the State Security Council and second, that through the joint management centres, in co-operating against terrorism, which is the way it was phrased, that some business leaders, gave information to joint management centres, flowing from sometimes so called illegal strikes by giving the names of the leaders of those which led to detention, arrests and inevitably human rights violations. Now I'm not suggesting for a moment that you or your previous organisations were involved in any way in this, unless you tell me you were, but that were you aware at any stage of any business people co-operating to that extent with the state?

SACCOB SPEAKER: Chairperson, I think that Dr Boraine again is, it is a very important question, but I think that he is using business again in the monolithic sense which Dr Roshalt and others have referred to is not the case. Business, the concept of business is individual firms competing with each other and competing very vigorously and viciously. Certainly so far as my personal exposure into the chamber, being a member of the Johannesburg chamber for some twenty five years and as an office bearer of SACCOB more recently, and this decade, I can say that I was certainly not aware; obviously not in the chamber, which you have acknowledged and definitely not in the chamber. I was personally not aware of any business organisation feeding information to the bureau of security. I cannot say obviously, that it wasn't done.

MR KOZA: Chairperson, whilst obviously I was not a part of the organisation at the time, just listening to what Dr Boraine has said, I think it is quite possible, but probably must have been kept as a secret. But just listening to what Dr Boraine has said, I think it is quite possible.

DR BORAINE: The final question that I have, chairperson is also a rather large one, but you could perhaps refer me to any statement that you made in the past, and that is that one of the most (unclear) systems operating in South Africa and in business, was the migrant labour system. Which was both supported in large measure not only by the mining industry in its earliest days, and for a very long time, but also by governments and successive governments, but also by other business' who had the hostel system and brought people in, as units of labour, for a very long period of time and I think you know, without me enlarging on it, the very very bad consequences of migrant labour in terms of family life and social deterioration. Amounting, in my book at least to a gross human rights violations. What was the attitude of previous groupings and now SACCOB towards migrant labour?

SACCOB SPEAKER: Like you, we're just looking for the statement Dr Boraine, it is here among our papers. I will say just while Mr Middleman is looking up the reference that certainly over the thirty four year period and prior to that, it was covered in the submissions to government, in one way or another. And in fact, my recollection is, just looking very quickly again through the resolutions, is that it in fact came up more than once and it came up in a combined set of ways, whether approaching from a housing point of view, or a social point of view etcetera. I think it was covered on more than one occasion. But perhaps Mr Middleman has found the exact reference. If he can't, perhaps we can come back to it.

MR MIDDLEMAN: I think I can say categorically that ASACOM was totally against the migrant labour and has many resolutions and in the interviews with ministers, where we categorically, (unclear).

SACCOB SPEAKER: Just the fact that it was never the less practised by many business', and the members

CHAIRPERSON: Yes, Yes, say yes, into the microphone so that.

SACCOB SPEAKER: Thank you.

CHAIRPERSON: Thank you very much. Yes, Russell. Actually what I'm trying to do is to ensure that we ensure that we round off SACCOB and the president that wants to make a statement at the end of this.

MR ALLY: (unclear) we have looked through all the resolutions and there are a lot of resolutions around various aspects of apartheid. But the fundamental issue of apartheid, I don't see it titled anywhere, until very late in the day, and that is one person one vote. Why was that the case? The opposition to one man one vote for a very long time?

MR MIDDLEMAN: I don't think that one can say at all that there was an opposition in ASACOM as an organisation, we're talking as an organisation. I don't think ASACOM as, at the time that I was there for many years, ever tackled directly political issues in that sense. One mustn't forget that again in 1960, Verwoerd was going to open our congress; '61 congress; we had always the prime ministers opening congress', and he said,

"You, in your statement" the 1960 statement, "you double in politics and I will not open your congress"

and he withdrew. We were up against this kind of thing.

UNKNOWN SPEAKER: You were lucky.

MR MIDDLEMAN: Yes, sure we were lucky compared to other people. 

CHAIRPERSON: That statement is not allowed.

UNKOWN SPEAKER: I'll withdraw it

MR MIDDLEMAN: But these were the realities of the situation. The realities were that ASACOM had members who were members of the National Party, obviously. There was no discussion on this sort of thing, that was outside the business sphere. ASACOM was there to look after the business interests of business'. And while the wider, since, we were all in our personal capacities busy, one way or the other, but ASACOM as business, certainly didn't take (unclear).

CHAIRPERSON: Thank you very much. Dr Randera?

SACCOB SPEAKER: Sorry, your Grace if I may just respond to that, in 1985, I was 35 years of age and had become president of the Cape Town Chamber of Commerce and Industry. Quotes were taken from my presidential report. Of course, the vital issue which must now be tackled is the question of meaningful political rights for urban blacks. Our chamber and ASACOM have both directed vigorous attention to the question of a common law to South Africa through universal citizenship. Secondly there must be a bill of rights protected even against government by the courts. Thirdly, there must be full participation in the private enterprise economy for all South Africans, regardless of race, sex or creed. And I have to point out that in those years, 1985, we received public abuse, death threats, for such statements, it was before it had become fashionable. And we are on record as having been opposed to any, in any way denying any South Africans universal franchise.

CHAIRPERSON: Thank you very much. Dr Randera? 

DR RANDERA: Mr Koza and your delegation, I'm actually having a little bit of difficulty in terms of reconciling what you're saying and what we're getting acknowledgement for, from your group. I agree with my colleague, Dr Ally, if we look; and I thank you for all those resolutions, it really does give us an insight. Whether one takes your five point plan, in 1960 or the resolution that emerged from conferences right uptill 1983, 1984. The impression that I come away with is that, it was really to maintain a structure and order that allowed white domination to remain. So you talk about native areas, you talk about allowing the upliftment of influx control, restricted influx control. You talk about increasing education and training for black people. But there isn't and its quite clear, regardless of what you're saying, in terms of your meeting with the ANC in 1960; there isn't anywhere the clear point being made that the organisation was against apartheid, it was therefore a 'one person one vote' system. If I can just throw in my second question, related to what Dr Boraine said earlier on, which is the whole question of the national state security management system. That whole period between, after the coming to power of PW Botha in 1978, there was this conference at Good Hope in 1979, another conference that took place in 1981 at the hotel itself; where total onslaught was discussed. Now, some of your organisations were present that day, at both those conferences. So were the organisations not buying into, at that particular time? As Mr Roshalt himself said earlier on this morning, not that he actually believed in the policy of apartheid, but he believed in stability, he believed, he was against the idea of Russian economism. So there were those two, there are some of these contradictions that we'd like to just actually clarify because, I want to actually go away from this hearing understanding what acknowledgement is taking place by your organisation, because there was a culture that prevailed in that period, and we can't take away from ourselves, that we were influenced by that culture, in one way or the other. 

SACCOB SPEAKER: Chairperson, the culture was that the organisation stood for change. Mention the 1979 meeting with PW Botha, I wasn't there, but I know many people who were, and I recall at that time, him pointing at business men and saying,

"You keep out of politics, you keep to business. We don't want to hear from you"

and that was a consistent theme, as Mr Roshalt mentioned, and as we found in our delegations to government. Now, practically speaking, you know, what practically, other than constructive engagement, can a business organisation, such as a Chamber of Commerce, actually do? Do we toyi-toyi out in the streets? Do we withhold tax, which is the ultimate weapon. There is no business organisation that would recommend, because it is not a cohesive body. You'd never get a mandate, given the divergent business' that make up such an organisation, to take such a radical step. So, the culture and hopefully that is something that is being conveyed in this document and through this very important process was to improve the environment, obviously for business, as a business organisation. But business has numerous stakeholders and it's not only the shareholders. Obviously at the end of the day, if the business succeeds or fails, those are the ones who lose their money. But the stake holders comprise the workers in the organisation, the suppliers, the environment, the education process, health, training, security and all the elements which we hold dear; both in the business and in a personal sense.

CHAIRPERSON: Thank you very much. I should now call on the president of SACCOB to (unclear).

MR KOZA: (Speaks Xhosa). What about the future?

&#9;Firstly the future, is not an extension of the past. And I think we as South Africans must come to terms with that. Our future, cannot be defined by our past. And we acknowledge the role and objectives of the TRC in trying to help South Africa deal with the past as opposed to burying the past. And in order to do that, chairperson, it might require that we dirty our hands, but give the future a shape we desire, as opposed to colliding with that future.

&#9;We've now had the opportunity of an important exchange of views on issues raised. A commission has also asked SACCOB to address the question of the future, and I would like to conclude with a few comments.

&#9;Consistent with the views expressed today and the views of SACCOB's predecessors, SACCOB believes that economic growth and job creation are still the keys to a prosperous and stable future. From this point of departure, SACCOB will engage the government of the day constructively. That is all SACCOB can do. As has happened in the past, business' engaged with government, even with the democratic government, we will continue to engage with the government and try and shape the policies which will support a human rights culture in it's economic dimension. To a large extent, this is what the governments growth, employment and re-distribution strategy gear, (unclear) to do.

&#9;The one major lesson learned from the apartheid experience, is that in any society, there must be a proper balance between social justice and economic growth. We ignore this balance at our own collective peril. Global competitiveness and a human rights culture, must be mutually re-inforcing in ways which maintain that balance. The work of the TRC has been invaluable in assisting to confront and deal with South Africa's apartheid history. But we cannot continue to be held hostage to the past. Tremendous economic and social challenges face South Africa in meeting the aspirations of our people at all levels as we enter the twenty first century of globalisation and modernisation. To succeed, we require that SACCOB, as an important component of civil society, helps to promote sustainable growth and development. We, must also prevent a recurrent of past injustices. There are grounds for confidence. But not complacency about the future. To successfully meet these challenges, we also require a business sector which draws its resources from the total population with the emphasis on investment in human capital. An organisation like SACCOB

As an expanding economy, in which the benefits of growth can be fairly and equitably shared. SACCOB will continue to urge its membership to uphold policies and practices which will promote stability and economic progress. Chairperson and members of the commission, we thank you for this opportunity.

CHAIRPERSON: Thank you very very much for the lucid presentation and we thank you for your openness in the question and answers session and appreciate your final statement, Mr President. I suggest that we return, at a quarter past two, which gives us a forty five minute lunch and that ought to be, I think sufficient. Thank you very much for agreeing.

CHAIRPERSON: A representative of Old Mutual, you're ahead of the syllabus. Thank you very much.

DR BORAINE: Welcome and I apologise that you had to wait such a long time, but I'm sure you have learnt from those who have gone before you. I wonder if you would introduce yourself and you colleague please.

GERHARD VAN NIEKERK: Thank you, chairperson. My name is Gerhard van Niekerk, I'm managing director of Old Mutual and I've got a colleague her, Mr Peter Dickson who will be assisting me throughout the presentation.

DR BORAINE: I take it then that both of you will have to take the oath?

GERHARD VAN NIEKERK: I think probably only me.

DR BORAINE: Only you, okay, if he'll slip your notes

GERHARD VAN NIEKERK: He'll slip my notes, I'll

DR BORAINE: Will you stand please. Dr Boraine administers oath.

GERHARD VAN NIEKERK: Mr Van Niekerk swears oath.

DR BORAINE: Thank you very much, Mr Van Niekerk..

MS MKHIZE: I would like to add a word of welcome, and please go ahead, talk to your submission.

GERHARD VAN NIEKERK: Thank you, chairman. We, as you know, we did submit a full presentation to the committee. What we'd like to do today is to talk somewhat to that but also just in brief summary, add one or two other perspectives. We hope that what we have to say will add to the understanding of the time of the organisation and what we stand for. You've had opportunity now to hear from an individual from individual company, and from some business organisations and the added perspective that my presentation will probably bring; is to bring to the commission the question of a mutual life assurance society which is a slightly different kind of organisation and I hope that that will create some understanding as far as that is concerned. We will be doing the presentation in three parts, first I will just briefly give a broad brush, historical overview of the organisation, where it comes from. I will then briefly talk about this nature of the organisation, as a mutual society and then I will just go over some reflection of the past history and then open myself for questions after that.

&#9;Mr Chairperson, the Old Mutual was founded in 1845 as a mutual life assurance society. It's founder and first chairman, was John Fairbairn, a community spirited individual who played a major role at the Cape during the first half of the nineteenth century. He was a person involved himself in many issues such as the freedom of the press as well as the freeing of the slaves at the Cape during that time. Old Mutual is therefore an institution which predates the formation of the Union of South Africa and has a strongly developed business culture. Over the years, it has been managed by people from the various communities and countries in which we operate. Those people have influenced the organisation, but in turn have been influenced by it. Ten spite the change in economic, political and social environments, in many parts of Africa during this period, Old Mutual has remained true to its mission. That is to help people to help themselves, by taking the benefits of life assurance to as many people as possible. 

&#9; The nature of life assurance implies some stable form of employment in that for most of this period, the bulk of the products that were offered, consisted of the payment of regular premiums over extended periods of time. That is the nature of our business. This mission of Old Mutual to distribute it's products and services aggressively is demonstrated by the fact that within months after its founding in May 1845, it was already operative in the Eastern Cape, to reach the cash economy which it already spread at that stage. Another demonstration was the fact that one year after the discovery of gold on the reef, our name was changed from the Mutual Life Assurance Society of the Cape of Good Hope to the South African Mutual Life Assurance Society, and that was quite a few years before there was a country like South Africa, giving notice that it was to follow its customer base further north. In 1889, the first branch was opened in Johannesburg.

&#9;If I can now come to the period under review, 1960 to 1994, which you've asked us to talk to. It is important to note that by 1960, Old Mutual already a well established and large organisation in relation to the South Africa of that day, was notably small by modern standards. It was also exclusively involved in the traditional life insurance work, and therefore the nature of the market still determined regular employment and participation in the cash economy. At this stage, the financial markets were in the early stages of change, and although the clientele of Old Mutual was predominantly but not exclusively white, we saw the beginnings of a real opportunity for black people to participate on a meaningful scale. By the early seventies, this momentum was going quite fast. It was around 1975 that Old Mutual took a number of bold new initiatives. It recognised that the black community had entered and were becoming part of the main stream of South African economy in ever growing numbers. Our client base was starting to reflect this and we had to prepare properly to accommodate these new members into our business on a much larger scale. At the same time, we recognised that, as an employer, we had to ensure that we had access to the widest possible skill base and to ensure that everybody could participate in the growth of the organisation. And after substantial strategic review and market research, it was in 1975 that we then created an organisation, a division, specifically aimed at supporting the growing financial needs of the black South Africans. We also created a new division to serve, the first time buyers, mostly from the lower income workers, in providing a disciplined way of saving and assuring themselves via, initially staff associations and thereafter going through the trade unions. If one bears in mind, that it took Old Mutual a 110 years to sell its first million policies, this last initiative that I have just spoken about, demonstrates the change of pace. Within ten years, another million policies were sold just coming from this single initiative.

&#9;By the middle eighties, more than 50% of all new policies sold, were bought by black South Africans. Today substantially more than half our total staff distributing policy, policies and advice in the market place comes from the black community. And today more than one and a half million members are making use of the Old Mutual services for their financial security and we look after some three and a half billion rand worth of their assets. During this time, an organisation was created to service the local communities, from the cities to the deep rural parts of our country. Today we have approximately 600 locations in which people are being served, and they stretch from places such as Lesikisiki(?) and Mount Frare (?) in the Eastern Cape, Gigiyane (?) in the Northern Province and (unclear) in the North West. In many of these places, office buildings have been erected since hardly any office accommodation was available in those areas. The overall contribution of Old Mutual and its people in those communities have been meaningful and positive. 

&#9;Throughout this period, Old Mutual senior management has always encouraged the staff of the organisation to participate actively in the community. Apart from active support for community development generally, we have a well-organised community development program among our own staff, whereby we will support people where they give freely of their own time and effort to involve themselves in community development affairs. And since the 1970's we have also played an active role in social investment in our society as this was manifested both inside and outside the organisation. Over all these years, the expenditure on training remained a very high figure and consists of up to 5% of our salary bill on a very consistent basis. I was very interested to hear the presentation by Nafcoc, earlier this morning. It was in the seventies that Old Mutual had a very close relationship with the Nafcoc organisation and in many parts of the country Old Mutual offices were used as meeting places and we gave secretarial support to those fledgling branches of Nafcoc right across the country. I personally made many friends in that process. And I said many of the initiatives that Mr Roshalt mentioned, clearly we as an individual organisation, we were also involved with. In the early nineties together with Nedcor, our banking organisation, Old Mutual sponsored a major scenario planning exercise to assist in the future direction of this country. The concepts developed during that exercise, found a fertile ground in the development of the RDP programme of the government of national unity after 1994. A massive investment into housing and electricity provision for the poor, as well as the urgent attention given to the social fabric of our society, are all aspects which were clearly formulated and documented during that exercise. 

&#9;Chairperson, I would now just like to make a few comments on the nature of a mutual life assurance society. How's it different from a company, how did this influence actions of management at the time? A normal company makes profits for its shareholders from its customers who buy its goods and services. A mutual life assurance society on the other hand, has no shareholders. It is an association that exists simply to help its members provide financial security for themselves and their families. In Old Mutual's case, these members are millions of ordinary Southern Africans; rich and poor, urban and rural, black and white. The Board and Management of Old Mutual are responsible to these members. Their task is to manage and direct the society efficiently. The four million people who make up the membership of Old Mutual reflect the full spectrum of political cultural and religious diversity of Southern Africa, and further afield. The Board and Management of such a society therefore have no mandate to take a stance on political, cultural and religious issues, regardless of their own individual points of view. If I can reflect to some extent just briefly, chairperson. It is human to look back over the past and reflect on what could or should have been. Old Mutual has been an international organisation for more than a 100 years. During that period we have seen countries in which we have operated at war with each other. During the century we have a experienced a number of, a period of decolonisation in many countries. IN some our business' were nationalised, in others laws were passed that made it impossible for us to continue our operations. In all cases, we attempted to do the best for our members. In most of these cases, severe damage was done to the financial security of our members.

&#9;These experiences have led to a firm belief, that even apart from this lack of mandate that I've mentioned before, it is not in the interest of our million of members and policy holders, for Old Mutual to take any party political stand. The management and board have not felt that they could represent the political views of millions of members of different countries. The ability of governments, by way of either poor legislation, ideological pursuits or even vindictiveness could cause major damage to the financial security of our members, have been demonstrated, and we have actually experienced that. As part of our practice in maintaining political neutrality, we have never made any financial contribution to any political organisation. Over the period it became progressively clear, however, that human rights were being abused within the political system. Looking back, it is feasible to think that we could have short, a broad mandate from our members to take a firm public stand. The truth and reality is, that we as management did not seek it, nor did we ever receive a request from a concerned group of members to do it. Old Mutual's decision to aggressively build its membership base in what was the homelands, is another case in point. In doing so, it could be argued that we gave credibility to the policies of the government of the day. On the other hand, it enabled more than one million people to improve their financial security, many jobs were created, training took place and infrastructure was developed. From time to time, key Old Mutual people were made available to government to serve on various advisory and other bodies. This can also be construed as support for the government. On the other hand, use of those structures to influence the matter of economic policy of the government did hopefully improve the lives of people over what they might have been. 

&#9;In conclusion, chairperson, although we have a new dispensation in South Africa, where the protection of human rights have been entrenched in different parts of our constitutional framework, Old Mutuals' dilemma in this sense has not gone away. In more than one other country where we operate, there are accusations of human rights violations. In some countries the rules of economic games has not been objectively determined. It remains a difficult issue to deal with for us as an organisation. We have been in conclusion, chairman, members of different business organisations. We are members of AHI, Handelsinstituut, SACCOB as well as Nafcoc. And through those organisations, our people have played an active role in helping those organisations formulate some of the policies that you have heard about here, party today and will still hear about in the future. That has been our avenue for expressing our views in terms of changing the way that the country was managed. But as an individual organisation, we took the line that we took and I would now be very happy to answer some questions. Thank you.

CHAIRPERSON: Thank you very much. A very helpful intervention. These people have pre-empted me, these two sitting here. I didn't give them permission to take off their coats, but in fact I was going to say, they might take off their coats. You are, if you feel like taking off your jackets, it will be all right, I won't be offended, even if I can't take off mine. Thank you, Hlengiwe?

MS MKHIZE: Thank you very much, I will start off with a general question. We've been sitting here almost a whole day, listening to different representatives and I suppose that will include you as well. Creating a case that, really, business was business. My question is, what will be your explanation of the discrepancies that we are sitting with as a society today where you have one segment of society with a well developed system of property development and also a huge percentage of our population in squatter camps and informal settlements. 

GERHARD VAN NIEKERK: Chairperson, I think it has been answered I think from some of my other colleagues. I think it was clearly as a result of the policies of the government over many many years that people were discriminated against and that that was the main cause for this big discrepancy that developed over time. There is no doubt in my mind that that is what caused it.

MS MKHIZE: In your own view, do you think there's anything that your company will be apologetic for?

GERHARD VAN NIEKERK: It is as I say, we've come over a very long history and we have experienced many things in many countries. As I've said, the one critical thing that one, with hindsight, would say that while it became clearer that human rights were being abused in our society, on a progressive scale, we did not seek a mandate from our people to aggressively take a stand. I think that is the, from a personal point of view that is probably the one case that I would say that we could have done differently.

MS MKHIZE: Also, there is a section in your submission, where you refer to Old Mutual's interest in the black market. As a way you've shown that, your company is 'clean' so to say, but also there is another perception, a possible perception that (unclear) to move was driven purely by economic interests, rather than a pursuit of certain political goals, by political goals, I'm not referring to party politics but a desire to act against a system which was discriminatory and in a way conducive to gross human right violations.

GERHARD VAN NIEKERK: I think I have to get back chairman to answer that question to refer to the organisational form of the business that we've been managing. As a mutual we were to the extent that we were conducting business with anybody, we were conducting it to improve that individual persons financial position, by either insuring them or that in the case of death of a breadwinner, the family could stay on in the house or the children could continue going to school. Conversely it was a capability for people to build up some sort of nest egg where they had some spare money to invest, for their old age. So in a sense, we were always making money for our clients, rather than for anybody else. There was no, that was the one difference in our organisation, is that the interest of the so called shareholders and the clients coincided from a financial perspective. I mean that was one of the differentiating factors I think, over all these years, from different kinds of organisations.

MS MKHIZE: Although I will like to dwell so much on that, there's really a view prevailing, especially in the black communities, that, most certainly members of my age group, much as their parents were not by law, prohibited from being members, taking membership, but they didn't come out with anything and that has led to extreme forms of impoverished in other societies. But I will like you to answer to that. Then you referred to Old Mutual South African Trust which is in Boston. I just wanted to know what was your position regarding the (unclear)

GERHARD VAN NIEKERK: The Old Mutual South African Trust is actually an organisation based in the UK, whereby we mobilise funds from the international community for investment back into South Africa, it was a recent, after the new government came to power, those kind of possibilities became possible to us. We access the international markets, we created the fund of some fifty million pounds I think it was initially that was mobilised and that was then invested back into South Africa. The Boston leg of our operation is an attempt for us to also access the institutional funds of the American market, to, for the investment back into South Africa. So that has been those two initiatives.

MS MKHIZE: Earlier on this morning, we heard an argument that today government should actively empower black business as the nationalist party built. What are your views on that? And there are even stronger views of people that are saying, who won't talk reconciliation in this country if the government is not doing that. What are your views?

GERHARD VAN NIEKERK: I think in terms of our own actions, I think we have demonstrated that we are in favour of that, we have been involved in at least more than a billions rands worth of investments in the entirement of new entrepreneurs in this country over the last year or two, we have invested another billion rand in infrastructure development, so I think quite frankly it is something we will support as long as it makes sense economically. I think ultimately the country is , has got very scarce capital resources, but we have demonstrated that it is possible to do those kinds of things if , but in terms of something that I personally will feel quite happy to put my own money behind that. So it is not necessary to say that these kinds of actions must always be done at a subsidised type of level. I believe that it is possible to do it at an arms length economic level and as long as you look very hard and actually find the mechanisms to do them.

MS MKHIZE: Thank you, I will hand you back to the chair, so that my colleagues can ask you a few more questions.

GERHARD VAN NIEKERK: Thank you.

CHAIRPERSON: Thank you very much. Russel?

DR ALLY: Is it the case that Old Mutual through (unclear), the other company by that it is controlled, which was one of the three groups that dominated the private sector defence industry in the supply of arms to Armscor. Was it done because it made economic sense or because there was a belief in the need for a strong defence force, given the political threat the country was perceived to be under?

GERHARD VAN NIEKERK: We don't control (name unclear), neither have we ever controlled (name unclear), so I don't think that is a valid statement to make. We've had an investment in it, and for that angle it was a purely economical issue, we owned shares basically. Initially it was an investment in the Barlow Rand Company, and after that was unbundled, we ended up with a substantial stake into the (name unclear) company and that of course was one of the issues that happened quite recently. But there was absolutely no question about, other than a purely investment motive in that.

DR ALLY: There's also the charge, I mean that's linked to it that you, the chairman once JD Van Der Horst, was alleged to have been a close advisor to prime minister Botha, that he was a director of Sasol, that he sat on the Defence Advisory Council; and this interpreted by some as support for the total strategy of the Botha regime. How would you respond to that allegation?

GERHARD VAN NIEKERK: I can't speak on behalf of people, but to the extent that I know Dr Van Der Horst, I certainly know that he would not have done it for that reason, but I think that he must answer for himself. He was on the prime minister's economic advisory council, and as I mentioned before, those kinds of appointments happened from time to time in order to get sensible economic policies, help to develop them, you make your people available as to Sasol, it is a private sector company and I'm not quite sure what the significance of that is.

DR ALLY: I think that one of the difficulties, is to; on the one hand one appreciates and understands that there was a government in power, with particular political policies, but on the other hand, it seems as if those who actually operated within that political system, business in particular in this instance, want to lay all the blame, or everything that happened during that period, on government. And I think that what would be useful to try to understand, and this is not in the spirit of recrimination, but if it was not the case that government could actually do what it did, because there were people who shared not necessarily everything with regard to the policies, but that kind of ideological framework which persisted. So the relationship between white people and black people, and opposition to any change which would lead to majority government because this was seen as the end of civilisation, those were the claims that were often made when leading businessmen said that we don't support one man one vote, look what happened to the rest of Africa. And Uganda was always the example quickly snatched up, with Idi Amin. What I'm trying to understand, is whether there was within business community and business people, an identification; not necessarily the ideology of apartheid in its cruellest form but with that kind of thinking?

GERHARD VAN NIEKERK: I can only speak for my own organisation, and as I say, we have been a multi national organisation fundamentally in Africa for more than a hundred years. In the decade since the seventies, we've been operating in many other African countries which had different governments which were totally comfortable to deal with, there was, I think our own actions speak for themselves as I've mentioned that from the early seventies and I was personally involved in that major initiative to place to actually reach out to the black community in terms of the way that we conducted our business. So quite frankly, from within our organisation, that kind of ideology certainly didn't exist, and it actually made no sense because, the nature of our business didn't lend it to that. It was not the kind of business that actually makes sense for that kind of ideology to persist.

CHAIRPERSON: Alex Boraine, are you also wanting

DR BORAINE: Just two quick questions. In your submission, one of your, perhaps, what you've referred to as possibly controversial statements, was that Old Mutual has strived to be non-political, whose financial strength has not been used as a political lever. If one looks at the history of government and its policies; and they certainly go back long before 1948; people seem to think that's where it started, but that's where it was developed and entrenched. There was a basic policy followed; a racist policy, in this country but made so much more harsher from '48, legalise and so on; and encroached on fundamental human rights of the vast majority of the people of the country. Old Mutual is a very powerful institution; you may not want to claim that, but certainly those of us who are familiar with something of what the Old Mutual has been and is and probably will be. Do you think that looking back, the, apart from gaining a mandate, but just because it was fundamentally inhuman, unnatural, abnormal, that Old Mutual with it's strength and it's power and it's membership could not have played a stronger role, if only, If I realised how tough governments can become and how vicious they can become in many parts of the world. If only to put a break, to say, you can't go on like this, publicly. I mean you had a lot of very prominent leaders in the Old Mutual. I can understand not having a party political hat, but apartheid was a piece of social engineering that went way beyond party politics. Looking back was it not some other major stand the Old Mutual could have made?

GERHARD VAN NIEKERK: As I say, I've referred to the one, and I believe that with hindsight, that was the one area that I think we could have done it. We didn't. The interesting to me is also, that as I said, nobody, not ever ever through that whole period, did any group or a concerned group of policy holders, suggest at a AGM or anywhere else that this was to be done, so to some extent there was an agreement, a contract between ourselves and our members that came from all walks of life for us to take the stance that we've taken; for us to utilise the other avenues where business could speak in a collective voice, to make our view known and that was the view that we took, and as I say, with hindsight, one will always come to some different conclusion. But as I said here today, I can only say that is what happened.

DR BORAINE: Another question also coming from your presentation. Although Old Mutual has always strived to be an equal opportunities employer, groups have tended to be unrepresented and it seems to be a fairly common thing. Marvellous resolutions are taken. If you look at the top structures of top companies, I'm not talking about even smaller companies; but the top structures. It almost appears as though it is only in the last few years, and the fact that many of the people who've made submissions to us, and will come before us are almost always white and male to a large extent. I'm just wondering, did Old Mutual not think a long time ago that the representivity was wrong and set in motion certain steps that would guarantee really top places; and I'm really talking about top structure now, not the personnel managers and like that. Now being represented by a wider South Africa.

GERHARD VAN NIEKERK: Chairman, I think I fully agree with that and I think if you go back into our own history, that was something that we said to each other in the early seventies; and I'm talking now1972, 1973, as a junior manager in that organisation at that stage I was also personally involved in that where we said, clearly things have to change. We took that decision, we've moved into different parts of the world, we aggressively trained our management to; in a life insurance organisation, the nature of your top management, is that it takes up to two plus decades to actually get somebody actually coming through from the bottom up, if you want the training. Many of them need to, need high academic qualifications, you need to be an actuary or accountant or a legal person or something like that. We certainly, if I look at my management structure at the moment, it is true that at the top twenty five, there are no, at the moment, no black person represented there. The, at the next level, there are a number of them coming through and I would venture a guess that if we sit here in three or four years time, that there would have been a natural progression of people coming through into top level of the organisation. It has been a home-grown effort, it has been something that has been made difficult over the years because maybe we were ahead of our time and clearly those people are at a premium. We have lost many many people that we have trained to competitors. But we've made that effort and I think we started before the crunch really came in terms of the Soweto uprisings and all those kinds of other things that spurred a lot of action within the communities. So I believe that if we have to put us on a spectrum, with most people, that yes, we still haven't made it properly, but that we started earlier than most and that we are aggressively pursuing the target.

CHAIRPERSON: Bongani?

MR FINCA: Thank you, your Grace. You have argued in your submission very strongly the question of mandate. That you regret that you did not seek mandate from your members, to oppose in a strong and effective way the policies of the previous government. But then you go on to say that you actually were seconding some of your key staff in an advisory capacity to the government. And I don't seem to hear that you were concerned about mandate. Were you not aware that you were dealing here with the government or which was illegitimate in the eyes of the majority of the people in the country. It had been declared by the UN to be pursuing policies which considered to be a crime against humanity, it was a beast of a government. But you continued to second your staff

GERHARD VAN NIEKERK: No I think that was a misconception Mr Chairman, we did not second people to go and work in government. What I said is that we made people available to serve on some advisory bodies like the; our chairman was invited to serve on the president's economic advisory council, that was a particular decision that was taken, but for the rest there were no particular secondments in the way that I would understand that word, to mean that people

MR FINCA: Could I just withdraw the word secondment. I'm dealing with a language that is not my own. The word secondment, that means something else. I mean you sent advisory, you gave advisory assistance to the government, a government which to the majority of the people of this country were pursuing laws which were atrocious.

GERHARD VAN NIEKERK: Is it wrong to actually engage somebody where you have an opportunity to impact those policies. I have difficulty in understanding, that that is per say a wrong action. 

MR FINCA: The crux of my question is mandate. You said that you could not oppose the policies of this government, although they were obviously very cruel and violating human rights because you didn't have a mandate. Did you have a mandate to actually send advisory assistance to this government?

GERHARD VAN NIEKERK: We did not perceive that that was necessary for that particular action, no we didn't see that.

MR FINCA: Chairperson, my second question is on the question of investments. Did your company feel that it was necessary to have an ethical code to guide its investment policies, did you feel that if a company that, in a particular business which was responsible for violating human rights of people, that company is in fact by investing in that particular venture, actually benefiting in gross violations of human rights and participation of gross human violations.

GERHARD VAN NIEKERK: It was an issue that came up from time to time. But I think the difficulty that we were faced with in South Africa; if I can sketch the economic realities of the day, is that we had a situation, where we were a successful organisation in terms of, well a lot of people supported our products and polices and a lot of money became available for investment. We had a strict exchange control environment where you only allowed to invest money within the country. The volumes of money between ourselves and our competitors in the end, said that you; and in that environment, the equity market was clearly the best place for us to invest our clients' monies. And it was very difficult as those people themselves started to form conglomerates because they were not allowed to actually take their money and invest in global industries focussing on their particular areas, that there were so many organisations that were somehow involved that it became physically impossible for you to, even if we tried, that we would not have been able to actually implement such a policy. It was not a possible thing for us to do, considering the volumes that were actually flowing through the life assurance pension fund industry that was taking place during that period. It was a period of very very rapid growth. 

DR RANDERA: (?) Mr Van Niekerk, two questions, one is, it's been said that in the past Old Mutual refused to make meaningful investment in the townships, townships meaning where the black people lived. Pleading that these areas are far too dangerous to risk policy holders funds there. Has that policy changed at all?

GERHARD VAN NIEKERK: Well, if we can go back in history

DR RANDERA: Just come back to what Bongani was asking earlier on and taking off from what you said, that there was no questions of mandates. Was that based on a mandate as well?

GERHARD VAN NIEKERK: No, if I can go back in history. You know, we fought, and that is one area where we tried very very hard to get rules changed, because, fine we were not allowed to, the law made it impossible for us to invest in those areas. We were, in many of these areas, eventually we got permission and you can go and look at most of the townships and the rural areas, we have actually invested in property, these days, because it makes sense, because where we can conduct our business from and we can make space available to other people. So clearly it was never a point of issue for us. If it was possible and made sense, we would have done it, but for many many years it was just not possible. And subsequently we have done a number of those kinds of investments.

DR RANDERA: Sorry Mr Van Niekerk, maybe I'm being a bit dumb, but when you say laws, what laws actually prevented you from investing in an area, I mean I 

GERHARD VAN NIEKERK: The Group Areas Act

DR RANDERA: I know about the Group Areas Act. I know about Separate Amenities Act, but I don't know of any law that said, I cannot actually invest my money in housing, or infrastructure in the townships

GERHARD VAN NIEKERK: For many years, it was actually, those laws prevented us from doing it. Because fundamentally, as a life assurer, you are looking after the interest of your clients. The day after you make an investment, you have to put a value on that investment, if that investment can be impaired by some government action, the only value that I can put on that is zero. And that comes straight off the capital backing up that business. It would have been; to actually go in and break the law, would have been a totally irresponsible action on our part and as I say, it is not that we didn't try. But we, and since then, we've done a number of those things.

DR RANDERA: Sorry can I just move the discussion a little further. And this is really related to the question of the national debt. In a submission made by Mr Terry Crawford Brown, he talks about the debt in , the national debt in 1986 being a hundred and two billion, in 1990 three hundred and thirty three billion. And the interest on this in 1997 alone was thirty nine billion. Some people argue that this is a way of making the rich get richer and the poor remain poorer and in a sense re-inforcing what we've come out of, which is who actually owns the wealth of the country? I understand of the 90% of the financial instruments which fund the national debt, about five organisations hold this and Old Mutual is one of these. As you know there is a movement, not only in our country, but internationally that is talking about one, the odious debt as well as national debt in our country. This morning we talked about reparation, is there something your company has given forth to in terms of 

GERHARD VAN NIEKERK: I have difficulty in understanding what you're asking me to do, because, yes, we lent money to the government for and for most of this time, even today there is a compulsion on us to actually invest part of our clients' monies with government institutions. And ultimately it is the, you know if the government can turn around and say, somebody has to write off that kind of debt, whose going to bear that? I mean, does four million policyholders, I mean who else can, where must this money come from? I just don't understand Mr Crawford Browns' argument. I read some of his stories in the press and you know, you and Professor Terblanche teach me something in economics, I don't understand it. It makes no economic sense to me chairman.

DR RANDERA: Does it not make any sense internationally either then? Is that what you're saying? That's what is being asked of the IMF, that is what is being asked of the World Bank,

GERHARD VAN NIEKERK: Ja, do you have an international organisation whose funded voluntarily by somebody else and they can go and make money available to relieve some of the debt, that's one thing. But to actually ask somebody who is taken money from the man on the street, and invested it in good faith, with a particular institution, you will have no future investment in that area because people will not believe that won't happen again. It will destroy total confidence in all those institutions. I think it will be the most irresponsible action that anybody can ask anybody to do. I just don't understand that.

DR RANDERA: Thank you.

CHAIRPERSON: Thank you very much. You may step down.

GERHARD VAN NIEKERK: Thank you very much

CHAIRPERSON: Eskom please.

DR BORAINE: Warmly to this commission, and I'd be grateful if whoever is leading the delegation, if you'd introduce your delegation first before we move on.

WILLEM KOK: Apologies chairman. Chairperson, commission, ladies and gentlemen, good afternoon. My name is Willem Kok, I am Eskom's finance director, however I will be doing this presentation on behalf of Eskom's council and management board, in my capacity as acting chief executive. I would like to apologise for the absence of Eskom's chief executive Mr Allen Morgan, who is attending a world energy council convention in Bangkok, he also tendered a written apology to the TRC. With me, to assist with answering your questions, I have Mrs Dolly Moghatle, executive director corporate affairs; Mr Bob Macklewaine, corporate industrial relations consultant and Mr Willie Du Plessis, our corporate legal consultant. 

DR BORAINE: Thank you very much indeed and welcome to all of you; as you know, we have to ask you to take either the oath or the affirmation. And could I ask you, I assume that we should, all should just in case. But they'll all be very brief I'm sure. Can you tell me which you prefer to take the oath or the affirmation?

WILLEM KOK: All four would like to take the oath thank you.

DR BORAINE: Would you stand please. Dr Boraine carries out oath, all parties of Eskom swear oath. Thank you please be seated.

WILLEM KOK: Chairperson as requested by Dr Randera in his letter dated the 29th October 1997; I will today formally table Eskom's submission to the TRC. It's a lengthy submission of 49 pages, which for presentation purposed we've shortened to 15 pages. Presenting this will take some twenty to twenty five minutes which I know exceeds your indicated time limit of fifteen minutes, for the sake of completeness however, I seek permission from the chair for this additional time.

CHAIRPERSON: Yes, yes.

WILLEM KOK: I thank you chairperson. Chairperson, as requested, the submission was done under three broad headings, namely Eskom, apartheid and the economy; Eskom, government and trade unions; Eskom and its' security arrangements.

&#9;Eskom would like to deal with these issues against the backdrop of the following statement:

"Eskom acknowledges, that as will be seen from this submission, it did not behave as would be expected, from a good corporate citizen in the past. Untill the late eighties as a public utility, it's actions and policies did little if any, to improve the plight of black people in South Africa. In addition , as an employer, which employment practices were largely discriminatory. Eskom wishes to unconditionally apologise to all black South Africans in general, and black Eskom employees in particular., for the fact that it entertained apartheid policies, and through its actions perpetuated it. In addition, Eskom wishes to apologise to all South Africans, regardless of race or colour for the fact that as a major player in the South African industry and our economy as a whole, it did not take active steps to facilitate the demise of apartheid, and racial discrimination. Also, for not using its' link with the government to influence it's thinking and its' apartheid based policies."

This brings me to Eskom, apartheid and the economy. Since its establishment, Eskom has played an important role, in the South African economy. It is also generally accepted that the cost of electricity is an important element in the inflation rate. Local manufacturers, also depend on a low electricity tariff to remain competitive in off shore markets and the mainly white manufacturing and construction industry, has over the years, benefited significantly from the capital projects, launched by Eskom. Electricity supply industry over the years, reflected the peculiarities of apartheid. The electricity act granted local authorities soul control over electricity supplies within their areas of jurisdiction. Many of the larger towns and cities became involved in installing electricity in adjoining black townships, but at a drastically slower pace. Partly because of the perceived inability of township residents to pay for electricity. Eskom, as the predominantly bulk supplier of electricity , electricity, merely supplied electricity in bulk to such local authorities. The Black Consolidation Act of 1945, and the Group Areas Act of 1950, enforced the policy of separate development in urban areas. This often caused the separation of naturally integrated networks, or the creation of new networks, irrespective of the cost thereof. Separating the administration of black urban areas from white cities, often meant that the black areas were left without electricity altogether. Eskom has only since 1987, become involved in the supply to black local authorities. Electricity supplies within black local authorities became caught up in national politics and rent and service boycotts at the time were employed as effective tools of political struggle in the townships.

&#9;It is appropriate to refer to the difference between electricity demand in the black townships and that in white areas to understand the pricing of electricity. White municipal areas normally had an industrial as well as residential demand which could be used to balance load factor resulting in lower overall costs, for industrial as well as residential users. As some black townships were electrified, they had no industrial users to balance the peak load, resulting in consumers in those areas paying a very high demand charge, whilst using considerably less electricity. This in effect meant, in certain instances, that electrified black townships subsidised neighbouring white municipal areas. Eskom initially took no positive action to broaden access to electricity. It never challenged the racial policies that prevented or inhibited investment and development of black townships. Although no record could be found of Eskom's management debating and positively supporting this position, it is true that Eskom effectively operated as an institution of apartheid and in the process appears to have served mostly white interests. Towards the late eighties, the financial position of local authorities and the effect thereof on the electricity supply of such areas, became a matter of great concern to Eskom. This led to the establishment of the Soweto project in 1989, which was the forerunner of Eskoms' country wide involvement in electricity supply within various black local authorities. A few words, on the Soweto project. Following various meetings of various interested parties, including the then Transvaal Provincial Administration, towards the end of 1988, the committee was established under the chairmanship of Eskoms' then chief executive, to investigate electricity supply in the greater Soweto. A steering committee was established consisting of representatives of Eskom, the Transvaal Provincial Administration - TPA-; the Central Witwatersrand Regional Services Council, various city councils, the Rand Water Board and some business interests, including organised business in Soweto and Nafcoc. While the steering committee was busy with it's investigations, senior management from Eskom met with political and community leaders in Soweto to discuss the issue and debate possible solutions. As a result of these discussions and the findings of the steering committee, Eskom established a project team to conduct negotiations and undertake planning to achieve the normalisation of electricity supply within the greater Soweto.

&#9;The Eskom project team continued with their work during 1989 and also built up a working relationship with the Soweto's People Delegation, the SPD, while at the same time, negotiating with the TPA, and business and community leaders within the greater Soweto. Eskom was severely criticised by political leaders at the time within the TPA and the national government for doing so; as it involved formal discussions with people who were known to be members of banned political organisations such as the ANC. Eskom's involvement as aforesaid, was an attempt to bring about fairness and equity to all those that could benefit from the use of electricity. These arguments by Eskom were never accepted by the TPA and Eskom was accused of being in cahoots with the enemy. The TPA was concerned that official talks with the SBD would undermine the legitimacy of the city councils. However, Eskom accepted the view of the SBD that if it was to support the Soweto council to act on its behalf, payment for services would not resume. As a result of political developments early in 1990, the members of the SBD became involved in mainstream political activities and the project was formally terminated. However, Eskom continued discussions with various black local authorities predominantly in the Transvaal, with a view to normalise the electricity supply in those areas. This eventually led to Eskom taking over the supply rights within the greater Soweto as well as various other black townships. 

&#9;As far as electrification is concerned the following. Although Eskom initially operated as a bulk supplier, its rural electrification policy had been in place for many years; all being it focussing exclusively on the white agricultural and farming sectors. Although Eskom was legally supposed to only provide electricity if it was commercially viable, it continue with rural electrification which was in line with government policy. In 1984, the government subsidised the extension charges to be (unclear) by farmers in respect of the electrification of these farms. The early part of 1987, Eskom embarked on a program to also bring the electricity to black townships and the rural communities in an effort to improve the quality of life in those communities. It also made it's expertise available to all the relevant local authorities in an attempt to find schemes suitable for townships. At the time it was connecting an estimated ten thousand rural consumers a year. Since then, Eskom has made significant progress in its electrification program and since 1995, it has electrified on average three hundred thousand homes per annum, a thousand per working day. 

&#9;The impact of apartheid on Eskom. As an institution which had to procure a large portion of its capital equipment from suppliers abroad, Eskom was seriously affected by the international sanctions and the policy of disinvestment. Eskom therefore had a choice to either pay a premium to secure such items by making use of intermediaries or to assist in the establishment and development of local suppliers during this period. However, as local suppliers were predominantly white, or owned by so- called white capital, Eskom's significant buying power did not benefit black business at the time. Only in 1992 did Eskom formally pledge its support for black business, particularly small and medium business enterprises. During the first two years of this initiative, Eskom procured only services from black enterprises. This brings me to Eskom and the Trade Unions.

&#9;Eskom status as a so-called parastatle organisation, did not prevent it's employees from joining trade unions, they were never deemed to be civil servants and the provisions of the Industrial Conciliation Act of 1956, later known as the Labour Relations Act, have always been applicable to them. Eskom's relationship with trade unions can be traced back to 1919, when trade unions affiliated with the South African Industrial Federation, were formally recognised by the Victoria Falls and Transvaal Power Company, the VFP. Representations by the joint committee of mining trade unions resulted in the signing of a close shop agreement between the VFP and five trade unions on the 1st September 1939. This agreement remained in force, when Eskom took over the operations of the VFP in 1948. It is not known whether membership of the respective trade unions were limited to specific race groups. In 1955, Eskom advised that the joint committee of mining trade union, that it no longer considered itself bound by the closed shop agreement referred to before. Eskom concluded its' own closed shop agreement with seven trade unions, representing blue collar workers in May 1957. An important feature of this agreement was that Eskom would not recognise any shop stewards. The trade unions concerned, formed the Eskom Unions Joint Committee in 1959. It was agreed that the quarterly meetings, which until that time being held with the respective trade unions, would in future be held with the joint committee. It is known that black employees of the VFP belonged to the African Gas and Power Workers Union, while there is no record of any negotiations between Eskom and this trade union. As far as black employees were concerned, Eskom primarily relied on an 'induna' system; room representatives in the hostels, and accident prevention committees. The period from 1960 to 1979.

&#9;The close shop agreement referred to earlier on, has been replaced by a new agreement on the 1st July 1963, after the admittance of the South African Iron, Steel and Allied Industries Union. Since 1964, regular meetings between representatives of Eskom and some of the unions in terms of the closed shop agreement took place. During 1970, a request by the trade unions for a new closed shop agreement and the recognition of shop stewards, was turned down by Eskom and the dispute was referred to the industrial court which rejected the demands of the trade unions. At that stage Eskom had serious doubts about external trade unions and expressed a clear preference for so - called house unions. The presentations were made to the minister of economic affairs in 1973, to be exempted from the provisions of the industrial conciliation act of 1956. These representations were repeated in 1976 as well as in 1979 when Eskom made its submissions to the (unclear) commission. Eskom also established liaison committees for its black employees at plant level and by 1979, no less than 62 such committees were in operation. By 1979, negotiations in respect of blue-collar workers as well as white-collar workers were conducted at separate but regular half-yearly meetings during which improvement in wages, salaries and conditions of service of white employees countrywide were discussed. There was no forum for the collective bargaining in respect of the wages and conditions of service of black employees at that stage. 

&#9;The period from 1979 to 1990. Eskom reacted positively to the report of the Wiehahn Commission as well as the legislation that ensued. The importance of trade unions autonomy was appreciated for the first time and Eskom deliberately refrained from fostering so-called sweetheart unions. Eskoms' black and coloured employees eventually established their own trade unions. Eskom appreciated the need for collective bargaining in respect of the black workers in particular and consequently decided to extend the liaison committee system in the interim. Regional liaison committees as well as national liaison committees were established. The national liaison committee served as a forum for collective bargaining in respect of the salaries, wages and conditions of service of all categories of black employees countrywide. In June 1983, Eskom decided that it would no longer insist that trade unions be registered before engaging them in discussions. And that the industrial relations system would be formalised and structured by means of three collective recognition agreements for salaried staff, monthly paids and general workers respectively. The trade unions recognised in respect of these categories of employees, would participate in three racially integrated bargaining forums in respect of each category of employee. The respective agreements provided for collective bargaining at corporate level as well as deliberations at regional and workplace level. Shop stewards were also recognised for the first time. They were encouraged to improve their skills and were granted special leave to attend trade union conferences or training courses. The agreements were comprehensive and covered virtually every aspect of the relationship between Eskom and the trade unions, including the disciplinary code and procedure, as well as the grievance procedure. The National Union of Mine Workers and let alone Allied Workers Unions subsequently known as NUMSA, were officially recognised in 1987 and they eventually also signed the recognition agreement in respect of general workers. By October 1989, 69% of all Eskom workers, belonged to trade unions. Eskom believes it is important to emphasise, during this period, unlike most other employers, it extended collective bargaining rights to all its employees, with the exception of managers on Patterson Bands of E and above. 

&#9;The final period from 91 to 94. In '92, Eskom rationalised the three forums into a single integrated negotiation forum. Collective bargaining and trade union participation in decision-making structures, changed fundamentally in 1992. In that year Eskom was in the process of restructuring the organisation to improve business efficiency, when the NUM in particular objected to what they regarded as unilateral decision making by management. This led to the 'save Eskom' campaign which culminated in management and labour sitting down and developing internal structures, to accommodate full participation and meaningful influence by all (unclear) labour and employees. In the decision making structures and process at all levels through the unfolding vision agreement as it was named within Eskom. As a consequence of this process, the electricity council appointments in May1993, including representatives from three trade unions, namely NUM, NUMSA and the Eskom Employees Association. Trade unions now have a say in corporate (unclear) and are playing an important role in Eskom's future, through presentation on the electricity council, the Eskom Medical Aid Society, the Eskom Pension Fund and other participate structures and processes.

&#9;Elimination of racial discrimination. Negotiations on the better utilisation of Eskoms' manpower had been initiated during the early seventies but progress was slow. Eskom in its' submission to the Wiehahn commission stated that it took eighteen months of negotiations before blacks were permitted to become lorry drivers for instance. Negotiations in Eskoms better utilisation of Eskom's manpower committee, resulted in the establishment of the Eskom Artisan Recognition and Training Scheme in March 1976. This was a non-racial scheme from the outset. In September 1979, Eskom adopted the policy on the elimination of racial discrimination. This was followed by the act of recruitment, indenturing and training of black apprentices as well as the appointment of a number of blacks in senior managerial positions. The advent of trade unions representing other race groups and growing aspirations emphasised the need to eliminate all remaining discriminatory practices. A number of strategies were deployed which included parity exercises regarding the same benefits for the same job, the Artisan Recognition and Training Scheme, the rationalisation of designation and wages, an equal opportunity exercise; equalisation of conditions of service and fringe benefits and the sharing of facilities. 

&#9; Eskom wishes to place on record, it's acknowledgement of the important role, the black trade unions played in the elimination of discriminatory labour practices. Prior to 1990, Eskom's development of Black professionals and managers was spasmodic and not very successful. Eskom concedes that not withstanding opposition by (unclear) trade unions, it could have been more active in this area at a much earlier stage. In 1993, Eskom's formal stance on affirmative action was developed and adopted. An inherent part of this policy is training and development. One of the major initiatives to support this, was the granting of bursaries which as you will see from the numbers grew rapidly from 1989 to the current status where 453 bursaries is granted to black students as opposed to 249 to white students. Affirmative action targets have been set and Eskom is committed that by the year 2000, at least 50% of all the professional senior supervisory and management levels in Eskom will be black South Africans. 

&#9;Eskom and its security arrangements. The last part of the presentation. During the period 1960 to 1994, Eskom experienced a number of incidents of sabotage during the 60's through to the 1980's. This led to the establishment of an adequate security infra structure, to protect its installations. The government also identified the threat against certain installations, considered to be of national importance. The government therefore adopted certain legislation which included the National Key Point Act of 1980, in terms of which power stations, sub stations and control centres were classified as national key points in terms of the act and certain protection and safe guarding standards were laid down in respect of such installations, with which Eskom had to comply. In terms of the National Key Points Act, key points had to liase with the various forces such as the South African Defence Force and the South African Police. This liaison was evaluated on an annual basis. In terms of the set legislation, all security officers and senior personnel employed at key points, had to obtain security clearances. These were provided by the SA Police and the SADF. In practice it turned out to be near impossible for blacks to get the necessary security clearance in order to be legible for appointments in senior positions at these key points. It may be appropriate to know that Eskom also required employees in certain other positions which were considered to be strategically important to obtain security clearances. This likewise limited or nullified the chances of black employees being appointed in such positions as Eskom applied these conditions very strictly. Following bomb explosions at Arnot and (unclear) power stations, Eskom' security established an intelligence, counter intelligence unit, the purpose of which was to obtain advanced information concerning planned sabotage of Eskom installations in order that preventative action could be taken. This unit liased closely with the SA Police, the security branch and with military intelligence. The parties exchanged information regarding national key points and possible threats to its security on a regular basis. As a result of the threats to the installations, as well as the requirements of the National Key Point Act, that the key point guard should be armed, Eskom secured a substantial number of firearms during this period under discussion. The firearms were licensed and controlled in accordance with the Arms and Ammunition Act and were kept at various armouries at Eskom's installations. These armouries as well as security within Eskom gave rise to various allegations against Eskom during the past few years. Some of these incidents are tabled in the full submission, but in none were it found that Eskom acted untoward, taking into account the allegations that were made by the various parties.

&#9;Eskom's management is not aware of any facts, which support the various allegations made in respect of the investigations and discussed in paragraph five of the full submission. However, as indicated, on various occasions in the past, Eskom is committed to pursue any substantiated allegations of this nature. And Eskom wishes to re-iterate that commitment to the Truth and Reconciliation Commission.

&#9;Chairperson, in conclusion. Eskom acknowledges it did not behave as it should have in the past, for this Eskom apologises unconditionally. Eskom believes that it currently is and in the future can, play a major role in reshaping the country for the benefit of all. It pledges its commitment to righting the wrongs of the past and do whatever it reasonably can to bring about a fair and just society where all South Africans in terms of Eskoms' vision, can benefit from the access to low cost electricity for growth and prosperity. Gentlemen, I thank you for your patience.

CHAIRPERSON: Thank you very much. Dr Randera?

DR RANDERA: Thank you Mr Kok. I just want to come back to the first page of your submission. And as part of your apology you say, also for not using its link with the government to influence it's thinking in its apartheid based policies. If I can just clarify that. Does that mean that the executive arm of Eskom actually agreed with government apartheid policies and therefore did not speak out, or does it mean that you yourselves were so integral and believing in these apartheid policies and therefore it really wasn't necessary for you to actually approach government to change their policies?

WILLEM KOK: Chairperson, I've not been around at the time. I've only been at Eskom since 1988, but from what I can gather is that upto 1979, very little has been done in terms of the social conscience of Eskom. Only since that period from 1979 to 1989 that Eskom started to employ people of different race groups at senior levels, when they adopted a policy of equal opportunities that the conscience started to stir. And I think at that stage, Eskom could have done more in terms of influencing rather than just writing to government asking them for their permission, not being granted the permission and then sitting back. We could have been more active at that stage.

DR RANDERA: Mr Kok, I'm sure that when the mining houses and Anglo make their submissions we'll hear much more about the compound system and the, and all the problems associated with both the compound and hostel system and migrant labour. I'm reminded of one such hostel that we visited during our hearings in the Vaal, where in fact, it's alleged that people marched from that particular hostel to Boipatong and where the massacre took place. Now that was last year, not that long ago, people were still living in hospital under the most inhumane conditions. My question really is to find out from Eskom whether you've developed policies relating to compound and hostel systems and what are those policies?

WILLEM KOK: Thank you Chairperson, if I may refer that to Mr Bob Macklewaine.

MR MACKLEWAINE: Thank you Mr Chairperson. Yes, the whole questions of hostels has been addressed jointly with our trade unions. There is an agreement on the whole housing arena including the question of hostels. Eskom in terms of that agreement to do dramatic upgradings of the hostels. Our current position is that, it's rather strange; that we felt that we should abolish the hostel system and go into houses; we are currently in dispute with our unions on that, they want us to retain the hostel system and upgrade it.

DR RANDERA: Thank you, my last question is, related to your submission on your security system. We've had many submissions from trade unions particularly, of the links between management and security in any particular area. We also had recently at a hearing in Cape Town, Mr Craig Williamson coming and talking about how easy it was for him and his colleagues to be involved on culvert activities because they had again , the co-operation of management. You've talked in your submission about the close liaison that was between your own security and the South African Police and South African Defence Force. Would you say that there is substance in what on the one side what Mr Craig Williamsons saying and what trade unions have complained about?

WILLEM KOK: Chairperson, as far as I'm concerned and to the best of my knowledge, there is no substance to it but I would also like my colleague, Dolly Mogwhatle to respond to this question.

D MOGWHATLE: Chairperson it is going to be very very difficult to refute allegations of that nature. I think in particular, unless the Truth and Reconciliation Committee takes it upon itself to use the powers and the authority it's got, to subpoena specific people, it is going to be very very difficult for the current and changing management of this large organisation to be (unclear) to say,

"No, nothing of that nature did occur." Or "Yes, I can vouch for that, irrespective of whether I was present or not."

I think what I would like to bring to the attention of the commission, is that, through to its size, its share size, the diversity of its people, and the complexity of its business, Eskom cannot say today that unto what really did not occur as far as other activities were concerned and individuals of Eskom were involved in those activities. And that is why I plead for a situation where it cannot be expected of present management to vouch for non-occurrence of those issues. I don't believe anybody can vouch for non-occurrence. If you take into account that Eskom was operating in an apartheid era, in an environment where it was very very conducive for individuals whether we say in business or in society in general; it is quite possible chairperson, that untoward behaviour did occur.

CHAIRPERSON: Thank you

DR RANDERA: Thank you chairperson

CHAIRPERSON: Thank you, two quick questions as always from Dr Boraine.

DR BORAINE: The first is, that I want to make a comment; where I've listened to the presentation with great interest, and I want to say that I appreciate very much the candid way in which there was recognition of past failures, in a very large organisation. And I thought to myself, that man who is speaking now, he hasn't worked there for very long. He is too candid. And I proved to be right, you were only there since 1988, I had no idea of that, and I think that what I am saying is that, when one has been part and parcel of an institution for a very very long time it is extraordinarily difficult not to want to justify what took place; and I think both the comments from you have I think been a great encouragement to this commission and certainly to myself. It's refreshing to have one qualified statement rather than an explanation. It may be that the offences were more blatant and that is why it was called for., but nevertheless it is very much appreciated. I also had a question and the chairperson will be delighted to hear that I have been overtaken because your colleague has mentioned the (unclear) responsibility of the commission looking into this matter and certainly will try and do that.

CHAIRPERSON: I'm so grateful to Dr Boraine, for his consideration. I just want to reiterate what he has said; I mean our appreciation, I my opening remarks, I did speak about, the cleansing effect of an acknowledgement, because you; I'm radioactive; you do disarm people and it makes it very difficult for anyone to be wanting to be very very forthright, because you have pre-empted and I would hope as I said in the opening, that we would get that sort of streak, which contributes to the process of unifying a shattered and fragmented society and helps in the (unclear). So we will say, much power to you, you management, there is of course a continuity, I mean they belong in an organisation and so they apologise even if they themselves were not particularly involved, they are still part of that organisation which is changing, and we are thrilled at the composition of your delegation. Thank you

WILLEM KOK: Chairperson, thank you.

CHAIRPERSON: Please step down, and now Armscor.

&#9;Order, order please. We welcome you very much and I believe you were in some agony yesterday, you had some back trouble so we are grateful that you have been able to come forward and be here this afternoon. Dr Boraine will administer the oath or take the affirmation.

DR BORAINE: Thank you chairperson, and yes a very warm word of welcome, a particular welcome, we understand that the agony was not only confined to the back. So we are delighted to have you with us today, really quite genuinely. Thank you for coming. I wonder if you'd introduce your delegation and then we will take the oath.

MR HAYWARD: If I may Mr Abar Omar, he's the group general manager, corporate communications; Mr Helias Fiyega, who's our company secretary. We may all be talking so I think we all need to take the oath.

DR BORAINE: Thank you very much. Would you stand then please. Dr Boraine administers the oath.

CHAIRPERSON: Thank you very much, Dr Russel Ally. Oh no, no. Yes well I mean you might do a little spiel. No, okay, keep quiet. It's your turn and then Russell will be the one who will lead us in asking questions.

ARMSCOR SPEAKER1: Thank you very much , chairperson. First of all as you know, we were a little hesitant in being here and I think we just need to clarify that position. We consider this a very very important event. Our board has, as Dr Randera knows, Mr Ally, is a board that comprises people who've been on Armscor three years to three months. It's a new board. We believe therefore, that when you come to this type of event, you really need to have researched and done your homework well. And there was in our arrangements when we first decided to make an input, we felt we would submit our draft and then should there be any questions as we understood it, we would get written requests so we could prepare ourselves. Now the reason being, as I say, we don't want to sit here and say, we don't know or we don't know the answers and look in any way that we might be trying to white wash (unclear) would be a PR exercise. And that is why we had this discussion and I must tell you this, that Dr Randera, you're one of the most amacious men that I've known. He hung onto us Mr Chairperson, and you know when you get a bunch of captains of industry you get organised business large and small and you still get the trade unions together to be able to handle that, I think is a mammoth task. So we've felt that we should not really try and make his task too onerous, despite his withstanding. &#9;The other thing, I must tell you chairperson, your fax last night tome, I must say in which you very nicely spelt out why we should be here, the nice part was you ended off, after a little bit of quiet rapping over the knuckles, saying God bless you, and may I say to you, I did appreciate that as such. So if we by any way, if we've come here without questions and if there's any reason we've got to say we don’t know, we'll give you the answers later, we're not making exuses. So let's be very clear. 

&#9;We as Armscor have been very, we think, privileged to have built up a very warm relationship with the TRC, since this year and we've been very committed to co-operating with it, we've met members of your TRC research team and in fact set up a modus operandi here, with Mr, Elias as to how,they could not only go into our archives, or even our bought papers. So I might tell you chairperson we believe we don't have secrets from the TRC and we were appreciative of Dr Boraine's letter in fact which we got on the 12th May this year in which you Dr Boraine actually appreciated your willingness for the boards' implementation of what we did. 

&#9;You Bishop Tutu, as I said to you yesterday, having heard from you, we believe, well we certainly should be here and give you an update and particular to let people know as we go along, really that there is a new ARMSCOR. Because I think with all due respect a lot of people are still thinking back 49 years, to the ARMSCOR that there was and there's a different one right now. 

&#9;So when we look at first, if I may look at a brief historical overview which we gave in our response, very briefly we can go through it and see that in 1964, partially in response to the restrictions being placed on South Africa, the armaments board was established as (unclear) body within the Department of Defence for the aim of handling all procurement as well as re-establishing the domestic defence industry. Largely by supporting private sector industry. And the Armaments Development Act, of 1968, No 57, stated that the objectives of the corporation shall been to meet as effectively and economically as may be feasible, the armaments requirements of the Republic. And for the armaments, these attainments, to be reached; Armscor was mandated to basically promote research and development, manufacturing of defence products, the acquisition thereof and sales and marketing. 

&#9;In 1977, Armscor resumed sole responsibility for the armaments acquisition, military research and development on arms control. It was also responsible for around 80% of domestic production at that time, which increased rapidly after the imposition of the mandatory arms embargo in November of that year. The 1977 embargo had profound effects on procurement policies and processes. South Africa already severely constrained, now either had to develop domestic production capabilities, and even then it had to covertly import key technologies in some case, components and even channels; or it had to establish a covert supply channels. During the1980's, procurement was driven largely by pressing operational requirements, especially the (unclear) and dollar. The arms of service were the identifier requirement, and would give us the specification, which would then be produced from aboard or developed and then industrialised in South Africa. Perhaps a positive policy was that the utilisation of the private sector was used wherever possible. And capabilities that already existed in the private sector, namely in the vehicle and electronic industries, were not to be duplicated. And you know one finds that Mr Chairperson, these days, when one talks about this question of spin-offs and spin-in, of how to commercialise the defence industry, most countries of the world have had great difficulty in doing this and in particular I think of a country like Russia and it's for this very reason that we've managed here in that our companies were already half-in or if you like, or more in the commercial side. So we've been always been basically a mixture of commerce and defence and we therefore had a dual sector defence industry in South Africa. 

&#9;Armscor being primarily responsible for weapons system development and integration, whereas the private sectors defence industries supplied materials, components sub systems and in many cases complete products. The major portion of the South African defence industry has always been in the private sector and the ratio of employment opportunities in the private sector in relation to the public sector is approximately five to one. 

&#9;The establishment of product development capabilities was a major milestone during this period. Now what about the period under investigation. Armscor and the private sector industry expanded rapidly as the war in Angola escalated. Completely new sectors of the defence industry were established and the capabilities of the general industrial base was vastly improved. Armscor expanded at that time into one of the largest industrial groups in South Africa and by 1981 had assets of some two billion rand and a yearly turnover of 1.5 billion and more than twenty five thousand employees.

&#9;Armscor was also contracting more than nine hundred companies in the private sector which employed about a 150 000 people. Today that number we estimate at the outside is fifty thousand, so there's been a considerable shrinkage in job opportunities. Now much has been made about the front companies and the middlemen that Armscor may have resorted to in its bid to procure or export. It is a fact that Armscor had to resort to such channels, these were termed covert channels, however most dealings were in fact formal, all be it secret, involving governments, foreign organisations and individuals. Front companies were used to protect the secrecy, however each front company, I might mention was subjected to the same level of government scrutiny and auditing, as the rest of Armscor's operations. Normally, I might mention that most of the front companies were not companies at all, they were merely post boxes that were established. Now, there's no doubt that some individuals may well have benefited from the lack of open competition in certain areas and by increasing the prices therefore that Armscor had to pay. But this, I might mention to you was not the norm. 

&#9;When you look at 1990 to the present, we find that since the relaxation of tension in the sub continent there has been a rapid decline in the defence budget, as obviously would be expected. That South Africa is now spending a modest 1.6 against the worlds sort of norms around about 2,2.2% of its gross domestic product on defence, and this has obviously had a very major impact on our defence industry. 

&#9;The last eight years have seen the cancellation or curtailment of many contracts and the retrenchment as I gave you figures from 150 000 down to50 000 of a large number of personnel. The decrease in the defence budget provided however the empitice for a complete restructuring of Armscor. Aware of the fact that the defence industry was the resipository of the bulk of high technology in the Republic, Armscor made representation to government to commercialise some of its industrial facilities, we can just think of at the moment where Infoplan, Denel have sold off aerial computers. And it was felt that some of these high tech industries could be utilised as valuable assets of growth for the Republics industrial base, while still being available as manufacturing sources capable of supplying the needs of the defence and security forces. In April 1992 ...(tape ends....)

..reporting to the Minister of Public Enterprises directly, and Denel is an independent, self-reliant tax and dividend paying company and trades its products and services in exactly the same way as the private sector does. Increased exports and a conversion to civilian business in the case of Denel has seen its succeeding in maintaining important technologies and thereby retaining many job opportunities which otherwise would have been lost. But obviously these have not been able to compensate for the large amount of chaps we retrenched in the defence industry itself. And the new company, Denel, is still very much in the defence sector, but it might be of interest for you to know they've actually managed to report commercial sales in '92 , '93 of almost 152 million. Now Armscor, itself has done away totally with all sorts of manufacturing facilities. We do have certain test facilities, and development companies such as the Institute for Maritime Technology which Mr Terry Kruger Brown(?) knows very well down in Simonstown and the (unclear) test range. And the formation of (unclear) has not affected Armscor acquisition function at all. Armscor continues to contract Denel in exactly the same way as it has always contracted its former subsidiary companies and hundreds of other public and private sector companies, both locally and abroad, but obviously on a competitive basis.

&#9;Now what of the current situation, Mr Chairperson? You know Dr Randera said to us, the whole purpose of this meeting was not so much to be pointing fingers at business, not so much to be detracting from the past but we needed to learn from the past. And that's something that I agreed wholeheartedly with. And what we are going to talk about, is what has Armscor learned from the past, but I think what is more important, is what are you doing about what you learnt from the past. And in looking at Armscor in this moment in time, we have been and we are a state corporation, we are a statutory body and we are non-profits statutory body. The state is the sole shareholder of Armscor and the corporation is managed by a board of directors appointed by the Minister of Defence and is directly accountable to him. Now Armscor commitment to (unclear) government policy has ensured that the Armscor of today has continued to survive in South Africa, and we are very proud of the fact that Mr Modisi has seen fit to describe Armscor, as well as Mr Tony Yengeni as a national asset.

&#9;Now what about transformation? Mr Chairperson, I was privileged, and I consider it a privilege to have been appointed in 1995 by Mr Modisi as the executive chairman of the Armscor Board, with an expressed brief to oversee the transformation of the organisation. This is a task that I have applied myself to with great enthusiasm for three reasons. The first, I find myself in the company of great South Africans, such as Judge Bamm, who unfortunately had to give up his appointment on the board because he went to higher places as a judge; and we've had like Advocate Matamela(?), who is very well known for his legal and his corporate, also his ability on corporate affairs and the whole question of corporate governors which was another very important aspect for ourselves. Then we have a Mr (name unclear) on the board of BMW who specifically oversees human resources on our board, we have a special committee, as he does also on social responsibilities and then we also have Mr Dirk Ackerman senior, who has been or is the chairman of Sun Air, and the airport company, who brings (unclear) credibility with us, and we have a rose. One sole rose, Mrs Chiddy Makgobode(?), who is one of the few chartered accountants in South Africa. And recently, I think very few people would know this, that, and might be surprised by it, that Mr Keith (unclear), has come onto our board. He is not only a director of a prominent group in South Africa, but he was the former head of MK Intelligence. And he's moved also onto our board. Now what about a man like Dr Magee(?). In looking to process and let's talk about transformation, we said, well you know, human rights is an issue that we need to look at. It's something that the defence industry hasn't actually perhaps faced sufficient focus on. So what did we do? We went and asked a man like Dr Magee, would he join our board? I might tell you, he sat there, chairperson, he said to me,

"You know, Ron, I have a little bit of difficulty coming on to your Armscor board. I helped fix bullet wounds, I don't help make them."

But he was persuaded to come aboard and help us in, you'll agree, something that is different and difficult for the defence sector and defence industry. So he in turn, has made a great difference to us, when looking at the aspects of human rights as such. And then, we've also been very fortunate in having our minister and deputy ministers, two people who've provided sound insight into what they see as the needs and requirements of the new government and the directions they wish Armscor to take.

&#9;I've also found, the third reason why, as I said to you, I'm very excited about the opportunity, I've found amongst the top management of Armscor itself. And I speak of the past, not just the new players that we have here along side of me. A commitment to making Armscor relevant to the needs of the new South Africa. I think that if we're honest, you'll find that all of our staff would say they very relieved that they no longer have the label of 'verraaiers' hanging around their necks; and they've taken various initiatives to ensure that the organisation no longer has to operate under clandestine methods of the past. And I would now like to refer briefly to some of these changes that we've been undertaking which reflect how far we've travelled from the period being investigated by the TRC. And we'd like to just look at a few transformation steps. It must be noted that the principle of accountability to government was (unclear) adhered to during the entire existence of Armscor and still is. Not only is the organisation audited internally and externally, but it is also audited by the Auditor General's office. However since 1993, you know, we've been doing various other things, as you said a little earlier Mr Deputy Chairperson, it's sometimes hard for people themselves to change. And we've had to look at different things and, small examples to bring about change since 1993. You know in the past all programs were declared secret, unless otherwise stated. So if a small component was required, was thought to be sensitive, then the entire program was deemed secret. Now if any program manager wishes to have anything declared he or she has to motivate that, why must it be secret and then only that component is secret and not the whole program. So this whole level of openness and transparency has started to pervade Armscor. 

&#9;In the past too, our own accountability may have been strictly within government, today the organisation is undergoing a paradigm shift, which sees it as being accountable to the entire public. That is why we are here today. That is why, when the media began suggesting that we were not coming to this event, Mr Chairperson, we were, and not being transparent, it cut somewhat of a raw nerve, I have to be honest. 

&#9;That is why we certainly are confined in ways on a continuous basis to account to the defence committees of parliament and the national council of the province, even they are so busy with other things. Now the second example of Armscor's embracing openness and accountability, has been the issuing of what we call the acquisition bulletin. Example of this are included in the package presented to the TRC and copies are available for the media should they need this. This bulletin makes South Africa's acquisition process the most open in the world. I'd like to stress that. The most open in the world. As subscribers can receive these hardcopies, or they can log onto an internet system which updates tenders being called for and contracts awarded on a daily basis. Already newspapers like the Engineering News provide their readers with a full list of details. 

&#9;Then we get to affirmative action. You know how does one say sorry? We hear people say, yes, I'm sorry for the past, but we believe the way you say sorry is to try and rectify some of the issues of the past in a practical way. So what have we been doing within Armscor? First of all, we have a look, it was virtually a totally lily-white organisation which today has changed, where we have a majority of black members on our board. I stress a majority. 

&#9;We also have 30% of our top management staff that is black, and 20% of our full staff compliment. Now we've used a number of methods to do this, because we're a technical group, 60% of our people are technically inclined. Where do you find black technical people? Ask Eskom the difficulty they're having and how we are losing people. So you don't use that as an excuse, so we've got to find them, we've got to build them, we've got to do something. What do we do? We go out there, we give school bursaries for sciences and maths. We start from that going right through to where we educate them at varsity, then we've got a unique talent pool where we have some 30 previously disadvantaged people employed on a basis of a one year contract where we try and find them a job within Armscor or in the defence sector. So this is an on-going one and I might mention, that although we've of late have stopped recruitment, I would allow only the recruitment of talent pool, and that is one way that you've ensured that of the 70% target we've set of all employment's to be black, we're managing 60%, which we think is reasonable if not good enough. And we have a substantial corporate investment program. We also do not overlook the ladies. Our objective is to have 30% of women at the top. You know my wife often says, there's a saying behind every successful man there's a tough pushy woman. My wife says, nonsense, behind every successful man is a very (unclear) woman. But the fact is that we are working on women.

&#9;And then what about affirmative procurement? Again, how do you say sorry, how do you go and make something happen? We've got an affirmative procurement policy in place, which gives upto 12% extra bonus on the pricing if were an all-black, all-woman company. Shareholding and employees. If you're, otherwise, you'll get upto 10% as mixture on the shareholding allowed and 5% on the mixture of the personnel. Now this has made a tremendous difference in the defence industry. I believe, we're probably one of the industries going more black quicker than most. When I say that, I'm very proud to say we have people like Worldwide Investments who are becoming the major shareholders with Plessey, a very large group; we have the Kannenni (?) Brothers who three years ago took over as a 10% stake in Grinaker Electronics, they've taken over control, two weeks ago. We also have people like Real Africa Investments, taking a major seat in IST. And on the government to government industrial offers that are now on the table for defence equipment, one of the aspects that countries will be judged by, and encouraged, is to team up with previously disadvantaged black groups, on joint ventures or partnerships. We also have a tender centre to encourage the small black businessman to come in and meet up with the major groups. And we believe that frankly we are succeeding and we are very, very excited about it, an initiative which stems from other departments.

&#9;Mr Chairperson, the essence of Armscor mandate has not changed todate. It remains the procurement organisation of the South African Defence Force, it's program management skills in the field of acquisition are much sought after. To mention just two examples, of why we feel proud about our skills. Since the 1994 elections, we were asked by the United Nations, could we please assist in helping them, and you think about that (unclear) body, set up a procurement function for the United Nations Peacekeeping operation. We sent a man in there for a year, he helped with the whole program. Today South Africa is getting, it used to get 2% of the United Nations procurement, it now receives 6%. So we're actually helping South African business. We had a seminar this week, on telling them how they can maximise the money. The other thing we did, we seconded a senior program manager, he's onto his third year now, to assist in the reconstruction and development program, which falls under Deputy Minister Jill Markers and he's made a tremendous input into housing at this moment in time because of his particular skills.

&#9;Furthermore, the recent settlement of what has been know as the ISC case, is also symbolic of Armscor at work in the new South Africa. This case affected relationship between the United States and South Africa and basically still is, because it is not totally off the table. However, by chairing a group with tremendous support from the Deputy President himself, President Mbeki, our own Minister Midisi, the Department of Foreign Affairs and the Armscor team, we led a very very strong initiative, which took 18 months for us to finally sign off this case the beginning of the year. We've just sent over our documentation and hopefully the compliance program will be cleared next month, and by early next year, our relationship should be normalised. This I believe is a very very important step for our two countries. And only today I had in my offices, the Deputy Secretary of Defence of the United Nations who was visiting Armscor.

&#9;In conclusion, chairperson, the history of Armscor is very much the history of the development of South Africa's defence industrial capability. It would thus be impossible to present an account, which answers all the questions, the Truth and Reconciliation Commission may have. This submission aims to provide a framework from which the TRC can further investigate the role played by Armscor. And if there are any questions which we today, despite our best efforts cannot answer, we pledge to answer them in writing as soon as possible. Thank you very much.

CHAIRPERSON: Thank you very much. Russel Ally.

MR ALLY: Thank you Archbishop, as yourself would have said a bit of a disarming exercise. After the struggle to get Armscor here, just a couple of questions, which I know as you have stressed, the new people in management and also completely changed board. But Mr Hayward, you yourself, you've been a businessman for a long time and also you were involved in Asacom, in an official capacity, so I hope the questions will not be too unfair. To try and get some understanding of the nature of the past and in particular in the way which the economy interacted with government, the politics. There is the position which has been put forward in many submissions that between the years 1970 and 1990, certainly from the '80's onwards, that the, a major force driving the South African economy was the role of the armament industry which led to, which has given rise to this description, many people use of a 'military industrial complex' developing. Do you want to make any comments on that? Is that a fair point?

MR HAYWARD: Well I think, I'm not talking now as Armscor, I'm talking here I think in general business, I would have a bit of a question mark against that. I say this only for one reason. If I look at business as a whole and we take the likes of Sasolburg, the development of Sasolburg, Mossgas, I see very prominent captains of industry sitting over here with major developments. I would say the arms industry, certainly at the time was obviously important, it provided jobs, as you heard a 150 000. But you know, a 150 000 jobs is small when you look at the industry as a whole. So I don't think, I think it was a industry that was heavily focussed on obviously for many reasons. But I do not believe when I said when you think of a 150 000 jobs that it made as much noise or bang as perhaps the product they sold. But it was an important industry, I would believe. I wasn’t part of it, but the fact is I'm just talking now as a broad industry.

MR ALLY: I'm not speaking about job creation as much as profit, that were generated as a result of the growth and development of the armament industry in this country, because, you know that often profits are not necessarily measured in terms of numbers of people employed.

MR HAYWARD: Let's talk about that. I think one of the things we need to remember, and as I've just showed you, if I look at where Armscor was, it was one of the bigger players. At one stage probably got to almost 40% probably of industry of the defence sector. Now Armscor remember was a non profit structure. So it wasn't making profits. It's true it might have been ploughing it back into research, but it wasn't making profits. I've also done some research to find out, you know, how did you say, the chaps evaluated themselves also against international pricing, to make sure that the Armscor subsidiaries themselves were developing products here at a reasonable price. And if you look at the groups that are around today in the defence industry, then they've been around a long time, I think most of them you'll find are, well there are some small chaps, but there are some big players. There's a few big players. They're public companies in the main, so one can see what profits they have or haven't made. I honestly doubt that I wasn't fair and that I haven't looked at their records that there wasn't excessive profit taking. My chaps assure me not, because they tell me when the tenders were in, we had to be internationally competitive. Because they still had a , never mind what the budget was, we've had to buy, and that's still our job, at the most cost effective price. So even in those days, I understand we measured and went round the world, to ensure that we were getting the best value for money.

DR ALLY: The reason I actually asked that is to try to understand what some of the business' which already made submissions, but said that business' obviously operate in a particular environment and there are restrictions on what business can do and what business cannot do, but it would seem that the development of the arms industry purely created a climate in which private business in particular could grow and benefit as you yourself pointed out, that most of the suppliers to Armscor was through the private sector. Now was this, and this is really just asking for you opinion, was this because of the profits, business is business is business or was this, again an opinion, because there was real sense on the part of business that there was a duty and almost a responsibility to develop the armament industry because of certain questions of national security which were at stake?

MR HAYWARD: I think if you have a look you know, those players who are in the defence industry , it's almost a fairy limited group who decided to get in. I don't think everyone felt comfortable. And neither today, being in the defence environment. I know some very major groups who intentionally did not get involved. Or did get involved with that type of product. So I think you had specific groups, as you said earlier, business men obviously go into business to make money; now the point you're trying to infer or find out really, and I can't tell you whether they made more in the defence industry than anywhere else. As I said to you, the information I have, which is limited, tells me they didn't but I cannot say to you they didn't. They're public companies, so one can argue you can go and look at their books and research them and find out if they were excessive. If they were, the (unclear) of the world; I mean I know people, if you look at the Anglovaals, they're the helders of the (unclear). I mean people of great integrity with national balance sheets, so I just sense, they would have wanted to have made a fair profit, that's for sure. And some of those organisations right now are taking quite a the reverse side of things, they're battling almost to survive. So I can't really answer your question to be honest, because I wasn't part of the defence sector at all.

MR OMAR: It's not entirely eliminating, but I think the defence industrial sector anywhere in the world as you probably have realised was quite different from other economic sectors. I think the one big difference is that when government places a contract, you have security and knowledge that it's going to be paid for and unless that government really gets very badly bankrupt. I think that apart from your profit and national security motivation that you're outlining might have been a third motivation that this was probably a most secure sector to go into than any of the others. 

MR ALLY: And the charges that because of South Africa's international isolation and the difficulties that you actually get when you secure arms, especially after the mandatory arms embargo, that there was actually a premium of getting involved in this industry because it was so difficult, so that those who actually did get in got paid over and above because of the effort to ensure that the military might was maintained, is there any truth to that?

MR HAYWARD: I couldn't say there's any truth, but one would surmise as I said earlier in my presentation, that some people must have made that little bit of extra out of it. I think the reputable groups would have made their fair profit, because people looked long term. There must have also been quite a lot of chancers around, I'm very sure, in and out for a few bucks; you know, high risk high reward. You can argue again of course, that in some instances, some of the groups, their people, they might argue themselves by gaining to trying to make this money, were putting themselves quite at risk, I mean this ISC case is a classic point. Some of the chaps had threatened prison sentences of a couple of hundred years. And a lot of those fellows who I met I might tell you didn't make much money, they were employees of firms. But I'm sure people must have made money. But I don't know them, I can't tell you who they are because I wasn't around selling to them.

DR ALLY: In your submission, one point 6 of the original submission that you sent to us, there's this, you state the following and maybe it could be useful if you could elaborate, especially on the second part of it. You say that

"we don't deny that in executing its' mandate, Armscor would have contributed to the military capability of the country. For most members of the South African Defence family, the enemy was not the people of South Africa, it was the threat posed by an external aggressor. Usually a communist state such as Cuba or the then Soviet Union".

Now, I may be wrong but that's not my understanding of the perception, and even more the reality, the majority of people, of black people in South Africa, is that for them the South African defence family is very much targeting the majority of people inside this country. Now, how is it that you make a statement like that?

MR OMAR: I think that was definitely based on the consensus that was developed in Armscor, amongst the management itself. I think that what you've found was that especially when it came to Armscor personnel who regarded themselves as part of the defence family, the possibility of research and development they were doing was being used against their own country and did not enter the equation. I think you'd probably get that unanimous answer from, to the person. I haven't been on the other side of the barrel as such, I also find that incredibly difficult to believe but we have recorded that to indicate that this was the way they approached their work. And that was the perception that they had of the role that they played, in the conflict.

CHAIRPERSON: Thank you very much, any other, yes.

DR BORAINE: Chairperson, only one question this time, not two.

CHAIRPERSON: Thank you for small mercies.

DR BORAINE: I wonder if you could tell us, you mentioned that you're not for profit company, do you get any, are you subsidised, by the state and if so to what extent?

MR HAYWARD: We're given an allocation out of the defence budget. And obviously we work it back also to show them as a percentage of their budget what we cost them. Because in effect we have to run Armscor as you might say a commercial operation and we say to them it cost you between five and six percent or whatever it is and we evaluate ourselves against agencies around the world, such as in France and Britain and we found we probably one of the most cost effective as we can find it. It's very difficult to measure (unclear). But our customer has to at least have a base. If we're not performing, Mr Deputy Chairperson, then obviously they're not going to employ us. So you can argue, they'll go somewhere else and pay, so we've got to be very careful, in fact they wanting more and more to be blunt with you for less and less which is normal. Especially with their budgets being under pressure they put ours under pressure. So we've got to earn our keep,we've got to justify it, very much so.

DR BORAINE: A follow up question just arising from what you said. In other words you said, the tax payer is making a contribution and because of the controversial past, to put it mildly of Armscor, and also forgive me if I sound naïve, but there is a view that arms manufacturing, I know the argument about being strong in order to keep peace, speak softly but carry a big stick; but there is a feeling among a number of people who felt that the time would come when an organisation like Armscor would no longer have to exist, or those would be even far far smaller than it obviously is, (unclear). Is this ever discussed, ever thought about in your own mind, your own staff, your own chairboard?

MR HAYWARD: Very much so. In fact when I came to Armscor, the first thing I asked myself, do we need an Armscor? That was the first question. What has happened in the few years I've been there, the message has just come through now, yes, we need an Armscor. Because we need a body that's independent, the board I might mention of Armscor also the procurement board. So you look at good corporate governance if you like. We've got outside businessmen coming in to give advice, is this a good buy or not. It's become even more important now that we're doing affirmative procurement, with all due respects to see who's who in the zoo, who are coming in with office. And you protect the minister if you like, and everyone else, because it comes up through the ladder of recommendations through the board at the top. And what you find, Mr Deputy Chairperson; you know we don't buy products off the shelf, it's a very very experienced type of person who moves in for example you'll go in and get the product specked out that the defence force needs. Then they'll design that, then they'll go out and tender, then they'll evaluate the tenders and then you'll have ongoing upgrading going on for maybe 25 to 40 years. So it's a highly specialised programme and you find these programme managers as I told you we were invited to go and help the US programme. They're highly skilled people, we find that frankly you need almost a parastatel that enables you to have a type of man who's an entrepreneur / businessman, not just a civil servant. His under the pressure therefore also of watching his money, he negotiates his deals. So you'll find that our defence force is going to need products. The question is one of two options, they doing it by themselves or we do. Now what you find, if it's a case of by themselves, very often the man whose a pilot today is made a program manager tomorrow on a new product. It may last two, three, four, five years then he wants to go back to flying. He doesn't want to be desk bound. Our specialists will stay in that aviation field for 25, 30 years. So you have this ongoing, as I said to you, great expertise needs to be built up. And that's why with our black engineers, it's taken a lot of effort to get them to the levels where we need them. So the message is simply this, we've just done an evaluation, do we want an Armscor, the message is we need it. It's the most cost effective way for procurement.

DR RANDERA: Father, just one question. Mr Hayward I want to take you back to your point about front companies and just remind you of the 1991 American court case, which was finally settled in 1997 I understand at a great cost to Armscor. What that case showed was that there were, that Armscor was involved in sixty seven counts of conspiracy abroad, money laundering and tax evasion. It involved countries like China, Irak, and in some centres the issue came up in the Cameron Commission again. Now clearly Armscor must have looked at that, as an example of what the organisation was involved with in the past and I really want to ask this as a question looking on the future, because earlier on you said about the transparency that Armscor is involved in now. As part of that transparency, is there a role now for these, whether they were secret groupings or not, do you still function in that way?

MR HAYWARD: Dr Randera, it's so nice to tell you that there's not a single front company around. They've all been wound up. They've all been audited. In fact another thing that I didn't mention which we're also pleased about; we've just changed our auditing group of which we given 50% of the audit to a black group and there not too many major (unclear) who've done it, and that again is part of transformation, you're bringing in new auditors. So when you talk about the past, I'm bringing in new players from the future. We are considering even those aspects to say well, there's no front companies, we don't have any. We don't have middlemen neither. We don't have them, sometimes middlemen are used by the manufacturers. Remember we don't sell the product. But they do sometimes use middlemen, yes; but even in that, more and more there's government to government business. If we come in, we come in only if it's a government to government deal, that's all. We don't pay our people.

CHAIRPERSON: I just have one, I don't usually ask questions because these people are very competent. I wonder whether it is an appropriate question, that relates to the sale of arms; because many of us are deeply concerned about the armaments industry and have been gravely exercised by the fact that we having got to a democratic dispensation, reasonably peacefully, have been involved in the sale of arms to Ruanda, Sudan and so forth; and to other parts of the world whose human rights records are to say the very least dubious. What happened, I mean where are you about this, because we think it is something that is an embarrassment really to as I have done (unclear sentence) where strife and turmoil were happening and you hear people say, well these arms have come from South Africa.

MR OMAR(?): Mr Chairman, I think it is obviously a very important question for the whole of South Africa to be addressing it all of the time. At one level, I think we must clarify that, Armscor at this point has no control whatsoever over any decision that the National Convention Arms Control Committee would take on who receives the exports from South Africa. I know quite often we've been approached by media organisations and other NGO's and so forth for comment and we'd be surprised ourselves that a certain deal is going through or has reached an advanced stage, because we are that far out of the loop at this point in time. So I think whatever comment we'd make would obviously then have to be at a personal level and at, at a personal level for myself, I would say that the kind of controls that the South African government has institute under the chairmanship of Minister (name unclear) and the National Convention Arms Control Committee are probably the best in the world. They obviously could do with a greater deal of transparency, they could do with a greater deal of accountability. I think it's at that level. It's at the level of governments control over arms exports that we'd have to address this. But we as a corporate organisation as a corporate structure have absolutely no say now over such decisions.

MR HAYWARD: I think Mr Chairperson, they've also taken a decision now to destroy all our small arms, that we've got surplus stocks of. That's been taken. So I think there's a consciousness, the fear you have and the concern we have, I think it's shared by everyone. But you know they're very difficult, there have been so many floating around this region, from so many countries. It's almost an impossible task to know what's going where. But I can tell you this; I don't pick up that there's arms traders that I know of, but they've got to be obviously, but they're not major groupings.

CHAIRPERSON: Thank you very much. We are grateful to you for having come, I had a wonderful speech for when you had not come ...

MR HAYWARD: I spoilt it

CHAIRPERSON: But thank you very much. Fabcos? Would you apologise for the fact that you're coming; actually it's not so bad, not so bad; we've done quite well actually. I thought maybe you'd clapp me for having got this thing moving, so that by now we are on the last but one. Oh, it's not quite as good; no, don't let me. Thank you very very much Dr Boraine.

DR BORAINE: My own word of welcome. It's very good to see you, and I assume you are leading the delegation and I would be grateful if you would introduce your team to us now please.

MR TSHWANGANE: Thank you very much Mr Deputy Chairman. I would like to start by introducing our founding father of Fabcos on my left, Mr Joas Mokghale, next to him I'll introduce one of our leading ladies in the hairdressing fraternity, Mrs (name unclear) Ramo (?). On my right I have the leading person in our (unclear) association, Mr S Mokgwatsane and yours truly the president of Fabcos, Reggie Tshwangane.

DR BORAINE: Again, a very warm word of welcome; I'm tempted to ask you to stay behind, not you, but the hairdresser and the taverna. I need help in both areas. Would you take the oath or the affirmation?

MR TSHWANGANE: The oath.

DR BORAINE: All of you will take that?

MR TSHWANGANE: Yes.

DR BORAINE: Please stand then. Dr Boraine administers the oath.

DR BORAINE: Do you have a presentation you'd like to make before we have the question time?

MR TSHWANGANE: Yes, I think we have a presentation to make, before question time.

DR BORAINE: Please go ahead.

MR TSHWANGANE: Thank you very much for this opportunity. Our presentation is not going to be a lengthy one. So the areas which we are going to try to cover is the 'who are we', black business under an apartheid regime, why this presentation.

&#9;Fabcos is the Foundation of African Business and Consumer Services, herein after called Fabcos, were founded to function as a business and consumer watch dog in the apartheid South Africa, complimentary to the efforts of Nafcoc. Inspired by the success of the then Black Taxi Association which was SABTA, which was the most successful black business organisation in South Africa. We proceeded to mobilise, organise, particularly the informal sector with a specific purpose of assisting the development of this sector to graduate to the formal sector. Who we are:

&#9;Fabcos is the creation born out of the dreams of noble men and women committed to the development and empowerment of disadvantaged black business. Fabcos is an organisation which promotes the development and empowerment of black business; and indirectly the black community at large. To this end Fabcos provides basic business skills, training, marketing expertise, research, management services and avail empowerment opportunities to its members. Fabcos was born out of the political and economic disenfranchisement of yester year. It is a catalyst that has the formal and informal sectors of South Africa economy to join together in mutually beneficial relationships.

&#9;The black business under apartheid regime: Much as combined voice of black business who (unclear) made (unclear) and persistent appeal, our initiative and efforts suffered and crushed under the ruthless inhumane (unclear) of the (unclear) regime. For all intents and purposes, there were circumstances in which black business operated, were not conducive. For management skills acquisition to build and develop business ability and capacity. A situation that was underpinned (?) by deliberate methods and a vicious and harsh legal system that kept black business progress to a bare minimum. Organisations like Nafcoc and Fabcos, survived purely out of the benevolence of only a handful of progressive corporate organisations, whose strategies, we suspect were persuaded by the desire to assuade their consciences as opposed to effective participation in the main stream of the economy for survival development prosperity. &#9;Why the presentation? South Africa has a history of (unclear),dispossession an explosion such that over the past years to the present, South Africa boasted enormous wealth of natural resources. But failed to optimise the benefit it would derive from beneficiating its raw materials and selling finished products to global markets for a better (unclear). The perpetuation of a system of explosion was sought by, which deprived the vast majority of our population the opportunity to learn and develop skills. That could have established and sustained a massive industrial sector that many would envy. Education, training and industrial skills development were not seen as a basic priority to economic development. But an element of control within policies that emphasised separation above the viability of communities within towns, cities, within towns and cities. But we do acknowledge with profound gratitude the efforts or our present government in encouraging and promoting black business. However, it is our wish that our government should continue to actually seek ways and means of enabling black business creating conditions conducive to economic growth. By the same token we are not convinced that the private sector, white business in particular is committed to effective empowerment. It is incumbent on them to demonstrate their bona fides. 

&#9; Last but not the least, there is an area that we need to address. Fabcos is a business organisation, that is not aligned to any political party, ideology and affiliation. It upholds the freedom enshrined in our constitution and is a loyal corporate citizen of this South Africa. At Fabcos we were never party to any discussion or debate on sanctions. At the time these discussions were the order of the day, Fabcos had not seen the light of the day. The first of Fabcos, on (unclear) in 1989 and it is well documented. 

&#9;Fabcos must realise the various significant challenges it's facing. Most important is the speed of the changes. We have special (unclear) the roots of our unity and solidarity. We may have cause to celebrate our good fortunes but we must remind ourselves of the value upon which our achievements have been founded. What we share above all, is a strong commitment to the noble and monumental idea of effectively empowering black business. Our founding commitment to articulate forcefully the will, wishes, aspirations of black business. Our commendation for diversity and active respect for each other's view points and our enduring capacity for honourable compromise. These historically envued values are serving us well in a world of often-brutal turmoil. We believe they will see us through to success in our quest for advancement and development. We also believe that they will continue to animate our marriage of mind and unity of purpose. Including our ideals to build and develop Fabcos ideas to a perpetual oasis, to meet the needs the requirements and aspirations of our people. Mr Chairman, we are not where we should have been. Neither are we where we want to be, but we at Fabcos always say, thank God we are no longer where we used to be. I thank you.

CHAIRPERSON: Thank you very much. Hlengiwe?

MS MKHIZE: Thank you very much Mr Chairman. Just tell us briefly, whether there were fundamental philosophical differences between Fabcos and Nafcoc, which warranted a new business structure.

FABCOS SPEAKER: Thank you, chairperson. I think yes there was a fundamental difference between Nafcoc and Fabcos. Nafcoc which was the front runner in the defence of and support of ailing and struggling black business evolved as a chamber of business, representing the interests of the more formal and more better established black business of the time. Increasingly there was a growing concern for the neglected informal and semi-formal sectors, which needed even greater help for them to develop and survive. Thus Fabcos chose the road of focussing specifically particularly on developmental activities for the black business sector. Thus the distinction being, Fabcos being a governmental agency as opposed to Nafcoc which was a chamber of business.

MS MKHIZE: In page one, of your submission, you refer to Fabcos, you say Fabcos were founded to function as a business and consumer watch dog. Was there and economic motive as well? If there was, I would really like you to explain to the commission as to how your philosophy differs from that of established business that existed, organised business that existed at that time. You know, I'm referring to bodies like SACCOB.

FABCOS SPEAKER: Thank you Mr Chairman. The difference here, by the nature of being a black organisation. That was a (unclear) difference. Now the difference here, was we were actually looking at trying to pull out the disadvantaged black business person from the quagmire of hopelessness and try to push him to the area where he can become or be recognised and seen as a business person.

MS MKHIZE: Well, maybe can you just. I mean this is important for us, tell us as a commission, you say you are (unclear) to a situation; you talk about the situation under which you are (unclear) emerged. That is page two. You talk about, the last paragraph, you talk about the situation that was underpinned by deliberate methods and a vicious and harsh legal system that kept black business progress to a bare minimum. Regarding this I would really like us to, like you to create a picture of exactly what was happening. We all know, we've heard from black management forum, bodies like COSATU and others, but in your own view, if you can tell us what exactly was happening at that time.

FABCOS SPEAKER: Thank you Mr Chairperson. I think it's an open secret was the circumstances the black man has been in this country over the years. Black business was no exception to the situations which prevailed at the time. It could never be sufficiently persuaded that the SACCOB's of that time could truly and honestly commit themselves to the self-advancement of black business. Hence we found that. At every corner, and in fact the entire social engineering of apartheid was such, that it intended to suppress the black man, in all his aspects of existence. Hence we talk about education for instance. And the kind of education that never gave blacks the opportunity to acquire business management skills for instance to be able to run their business' efficiently. When it came to the informal sector, we know that left, right and centre, they were harassed. They were harassed by what? By the formal sector business' that existed. You'd be arrested in old apartheid days, you could never hope to see the many vendors that are lining our streets today. And yet it is a known fact throughout the world that it is small business actually, ultimately generates the most jobs. And that was the (unclear) of the majority of lesser and deprived people. And for that reason therefore, when we saw our people being harassed, routed every day, we had to take up the cultural sword then. Hence the idea of mobilising people so that we can bargain collectively. Mobilise these people so that our voice is heard, as it made representations for the easing of legislation that disallowed blacks in any way. Whites were allowed to open up business' everywhere. It was easy for a whit business to procure a licence to operate business. It was one of the most difficult if not impossible tasks for a black man to procure a licence to run a business. And for that reason, therefore, that is why, we believed that the only way and the best person who could represent, and promote the interest of black business could only be a black organisation. This is what inspired the formation of Nafcoc in the first place and later Fabcos addressing the other still neglected sector.

MS MKHIZE: Just a last question, (unclear). Hardly we have engaged in this exercise because we are concerned, we would like to make recommendation about the future. Do you think what we have heard today is the right direction which the country should take. We have heard about Afrikaans business, English business, Black business?

FABCOS SPEAKER: Thank you Mr Chairman. I say yes, it is the right direction we are beginning to take and I want to qualify that. You see, what we need here as South Africans is to have a new strategic paradigm. The new strategic paradigm dictates that obviously we should start joining hands, or joining forces into competing for the future and not competing against each other. We need to begin, especially us as black people, to start churning out architects who will begin to dream the future and be part of change of the course of events, rather than turning out what we have presently mostly the maintenance engineers. So we have a duty, as South Africans to start doing that and we as Fabcos, have demonstrated that we have the willingness to get into that arenas and start moving forward. We are involved in the most important forum, business for the country, business for South Africa, for instance, Nedlec for instance, that our demonstration as Fabcos' willingness to move along and join forces.

CHAIRPERSON: Thank you very much. I was just saying to my colleagues the wealth of giftedness that there is in our country, a lot of which has been hidden, sidelined, disempowered and so on; and it is thrilling really sometimes to be made aware by presentations that have happened today but your own particular presentation here. That God has blessed this country richly. That we have been awful in wasting the resources that God has given us. Not just national resources, but especially human resources and one is excited as you get to realise the giftedness of so many of our people in this country and that one hopes that those talents are going to be used for the benefit of the whole of our people of our country. Thank you very much. You may stand down.

&#9;Now the very very last. 

Thank you for not saying "yebo go go".

DR NKOSI: Knows what "yebo nfundu" is. Chairperson, I do have this onerous responsibility of summing up in some particular fashion; which fashion I think needs me to highlight the important points that came out during the course of the submissions and also to attempt to focus the attention of every body here on the issues that really need to be dealt with as we go into the future. I would like to do a number of things, first I would like to introduce what I'm going to be saying by quoting a book that was just recently written by a colleague of ours, those of us who used to be professors, and then proceed to look at the presentation that was made by Professor Sampie Terblanche. Look at it in terms of what I can add to it, because I think it is a significant presentation, then thirdly look at the important issues that I think we need to deal with, then finally to focus again on the points that were made by Professor Terblanche. And then look at the relationships of these organisations that presented today, which organisations are grouped into three categories; essentially the private sector organisations are SACCOB, Nafcoc and Fabcos and then the two parastatels, Eskom and Armscor and then of course Old Mutual and Barlow Rand, these are private companies in their own right and that will be the end of my attempt to not summarise, chairperson, but to shed more light on what has been said. Let me start with an introduction.

&#9;The spirit in which I accepted the invitation to be on the panel for these hearings is captured in a book written by Dr Bernard Mako Siswe Makobani, a retired professor in the anthropology department in the University of Connecticut in (unclear). Bernard is back in this country after a lengthy period of exile in the United States where we taught together. This book is titled quote: ' The making of a racist state, British Imperialism and the Union of South Africa.' The period, and I think professor Sampie will be, Sampie Terblanche will be interested in this is from 1875 to 1910 close quote. It's published by the African World Press in Trenton, New Jersey in 1996. Now the pertinent part of what I'm trying to introduce here, appears on page 370, under a chapter called, 'historical knowledge and it's importance'; I will repeat that, 'historical knowledge and it's importance'. Ben says the following:

"Our present reality that is in South Africa, is made up of the descendants of beneficiaries of conquest as well as victims of dispossession and the descendants of slaves and indentured labourers. In South Africa the past is never past, it is active in the present. Our present condition is a consequence of the action of the past. Any attempt to forget the past, will not cure our condition."

I could not disagree with a single word in that little quotation. I am therefore motivated by the need to cure our condition, which I presume is one of the main primary objectives of this commission. In my comments I will confine myself to the submissions that we've had today. 

&#9;Let me start with Professor, I'm sorry, Sampie Terblanche's presentation. In my view, Chairperson, that presentation was extremely valuable and fundamental to the understanding of what actually took place in the economic sphere and in the political sphere, and the social consequences of the interaction of politics and economics on the society that has evolved in this country. It does the following things: 

&#9;First, it shows the underlying political ideologies; by that I'm talking about the kind of state or states that we've had since 1652. &#9;Second, it shows the dominant economic policies and philosophies that prevailed during that period. These economic philosophies tended to, to a large extent, influence the kind of business interest one saw, or sees in this country. 

&#9;Third, you then notice the resulting social relation that occur because of the interaction of those two powerful political forces. The state, and the economic philosophy which is really driving the business interests in the country. 

&#9;Now, I would like to add a little bit to what Professor Sampie Terblanche presented, Chairperson; and the temptation, being a former academic is to try and see whether I can fit in another puzzle. But I think it will be instructive. 

&#9;We start with for instance, Jan Van Riebeeck. This may be funny, who was he? He was an embezzler; who happened to be located at the Cape when one of the ships or two of the ships, I don't really recall were shipwrecked. To cut a long story short, he is taken by another ship to the Netherlands. When he gets there, as a worker for the Dutch East Indian Company, he was asked among other things, whether he would recommend to have the Cape set up as a station for the provisioning of ships that came from the Netherlands and they were going to Batavia, which is really Indonesia. 

&#9;Against the vociferous objections of two of the captains whose ships were shipwrecked at the Cape, he decided that it was a good idea to set up the station at the Cape, in order to save his skin. So here comes this man, after he had been sent to the West Indies and set up shop in the Cape. Who sent him? This is where the constructive part of the exercise occurs. Forget that he was an embezzler. He was sent by the Dutch East India Company. Where did the Dutch East India Company get the charter to run this business? From the state authorities of the Netherlands.

&#9;Here is a classic case of how the state can determine the economic consequences of the beginnings of colonialism in South Africa. Now he struggles to get labour from 1652 to 1657. And finally he is given the go ahead again by the company to colonise the country. 

&#9;So a very important period in the history of this country starts with 1657, during which two things happened; slaves get imported into the country, in order to help in the production on the land and colonisation starts with the free burgers who came in. Now here are the beginnings of two very critical things. One, plantation labour immediately became dual in character. Blacks did the hard work, whites did the supervision. 

&#9;The origins of the dual labour structure go back 1657, with the introduction of slavery. If you do not believe me, read a book called, 'White Supremacy' by Frederickson. It will give you the parallels of Dutch formation in the United States as well as in South Africa. Very well documented, he's a professor at Stanford University in California.

&#9;So you begin to see the evolution of the dual labour structure in which whites supervise blacks labour. And that should be something that all of us are familiar with because you still see it to this day. That's where it comes from. So it is very important to recognise the origins of some of these formations in order to be able to deal with them as we progress into the next century. 

&#9;The next thing that happens is that in the process of colonisation, introducing slaves, really developed a racist attitude towards the colour of black people. And that attitude was carried through all the major industries of this country. The agricultural and pastoral economy of the Cape was underpinned by black labour, working for whites. 

&#9;When the next industry, which is the first mining industry starts in Namaqualand, that was copper mining, the same dual labour structure is moved into the copper mining industry. Except that it is modified slightly by the intrusion of the experience of Cornwall miners, who mined tin. There was no beneficiation for copper in Namaqualand, it all had to be shipped out to (unclear). 

&#9;The development of the copper mining industry was then followed by the diamond mining industry and when that takes place there is not a European country that is not represented on the Kimberley mines. What do they bring? They bring their own work experiences from their own countries and followed by the capital that comes in from those countries. What kind of labour is put at the disposal of capital? It is again this dual labour structure that we see, being racist that started in the agricultural and pastoral economy, moved over with modifications from Cornwall into copper mining. Now it comes in with important innovations from every part of the world into the diamond mining sector. Now the actual development of the mining system that took place in Kimberley, was developed by and American mining engineer who had enormous experience in mining, because the United States was ahead in terms of mining in comparison to South Africa. 

&#9;But the point I'm trying to make chairperson is I'm tracing the evolution of these phenomena, the labour structure that we've been talking about in terms of its extensions, migratory labour. The founding of the compounds. The compounds were first put in place in the diamond mining industry in the country. And also the running of that diamond industry pleased the members. Cecil Rhodes even went to the extent of getting into politics in the Cape in order to be able to influence the economic imperatives that were needed to run the diamond mining industries. Here's a classic case again of the duality of the state and business interests. 

&#9;Now one thing I nearly left out, is in this evolution of the agricultural and pastoral economy of the copper mining industry, of the diamond mining industry, you also have an important powerful force, the economic philosophies that prevailed. And I think Professor Sampie Terblanche mentioned that. Free trade was very important during the period of British Imperialism as well as the operations of the Dutch East India Company and the state in the Cape.

&#9;Later the development of free trade, comes in place, and I think Professor Sampie Terblanche is right when he says there was a mixture of both free trade and mercantilism during the period of the 1870's and thereabouts. Now these forces are powerful. They're not just home-grown, they stem from outside. When Britain comes into South Africa and begins to see the potential of the diamond mining industry and begins to see what will happen with respect to gold, it takes a very important interest. Britain comes here, motivated, not just by the dispossession of black off land but by making sure that they have the supplies of gold, which was a commodity that underpinned all international transactions at that time. Now, I have now reached the point where I think Professor Sampie Terblanche started. My addition is simply this, 1657, critical, slavery the jewel labour market. Shortly thereafter you see the development of the agricultural and pastoral economy which really exploits that labour structure. Then you see the development of copper mines of the copper mining industry and you see the modification of the system and it carries on through the diamond mining industry into the gold mining industry. Where, suddenly, you see this massive amounts of labour streaming from various parts of Africa and they are housed in compounds. The design of which was borrowed from the Panama Canal and you see the Transvaal Chamber of Mines, going as far as Northern China to fetch what they call 'coolie labour' to bring them into these compounds that were designed with the technologies that were evident in the Panama Canal. Remember now, the Panama Canal was an incredible feat of engineering and you had to have hundreds if not hundreds of thousands of people working to cut through that (unclear). The consequences of that, was that you have to house them in a very hostile environment and that's what happened. 

&#9;Now I want to add by saying, is that what's gone or left. &#9;Thank you very much.

&#9;Now the point I'm also trying to make is that the same evolutionary process of this labour structure, was translated into the manufacturing sector. Consequently what we now have, where there is a depravation of black managers, where there is a depravation of skilled people, where today, when you see these Africans in bakkies on a cold morning, you have free labour. In the past it wasn't free labour. If you got arrested and you were taken down to Marshall square, the probabilities that you would end up working in the farms of a white farmer, who was contracted by the government to take you for nothing, were very high. I have gone through that experience, I stopped short from digging potatoes with my hands, because I had to be very street smart to get out of that trap as a young man. But you see, those bakkies you see today, in the past they were huge lorries, with many people sitting in the back there and then two white farmers sitting with guns at the end, at the corners of the truck, ready to shoot you if you jumped off. Now this is what we have seen in the evolution of how labour in this country has been used. The point of this exercise is to simply say, I would like to add that little part eventhough, it is not very elegant because I've gone into the manufacturing sector.

&#9;Let me try and be a little more elegant now. The larger issues that we need to look at. It really doesn't matter whether it was in 1657 or 1997, the nature of the state is very very important. And the states change over time. We now have a democratic state, but that state must understand, that when it comes to economic imperatives, whatever the economic philosophy is, we will always see the relationships between what the state does and what the dominant economic paradigm is. And that's what we're looking at now with globalisation. With the determinance of the (unclear) system etcetera. I will not get into the question of whether should we follow the (unclear) system, and the advice they give or not, that's a separate issue. But for us it is important to understand the relationship of the state and those economic philosophies. It is also very important to think in terms of how civil society is organised. In 1657, civil society was limited, if it existed at all. If you look at the journals of Jan Van Riebeeck, he has a whole compliment of the people he came in with from the Netherlands, including one thief. And he was the head man who determined who did what kind of labour in that compliment. There was no civil society, but civil society began to evolve after the burgers came into colonise the country. 

&#9;And as you go further on, you begin to see the formation of political parties with the intent of really (unclear) the state and organising the rudiments of civil society which had laws and systems which were operative during that time. We are no different now. We have a state, we have a economic philosophy, it's a global economic philosophy, because we no longer have socialism around, but we also have civil society fortunately it’s a little more democratic than what it was in the past, and then we have a legal framework that makes sure that the laws of this country are obeyed and executed properly and justice is done. Now, I think if I go back again to Professor Sampie Terblanche's presentation, that's the attempt we are, his trying to make, to show you how these tend to interact. It's within that forest that you start splitting hairs and you look at how individual interests behave. Not necessarily the individual in this case, but we're looking at business organisations. I switch immediately to SACCOB, Fabcos and Nafcoc. 

&#9;I can take Nafcoc and Fabcos, chairperson and look at them in the context of really political organisations for their business organisations, because of their environment in which they were operating. And still are operating. They're disadvantaged in very many ways. Now when you start looking at the sort of depravation that you see in Nafcoc and Fabcos and you look at the formation of ASACOM way back in 1892 and FCI in 1917 and you look at Nafcoc coming into being in the 1960's and you look at Fabco's in 1988. It becomes very clear that these cannot really be put alongside one another. And when you look at SACCOB, in fact ASACOM and FCI, and you see how they tried to operate in the past. The term, engagement, I think the deputy chairperson was right, is borrowed from Chester Crocker's concept of constructive engagement, which was a failure. Let's assume that it is true, that engagement underlined the way in which ASACOM and FCI dealt with the states of that time. They have ample evidence to indicate the extent to which they engaged the state. They even have a methodology they use to represent their feelings to the state. These were the resolutions. When you look at those resolutions and you see the end results of those resolutions over all those years, you scratch your head and you wonder, how could they have survived so long, but made very little difference. And you look at the other group, Fabcos and Nafcoc, and you begin to realise invariably they had to become part and parcel of the liberation struggle in order to break the shackles that surrounded them. I only have two minutes left. I want to make one point clear. It really doesn't make any sense for me to sit here, in particular me, and listen to the absolving of individuals and individual organisations, the same organisations become collective in character in ASACOM and FCI and SACCOB. And you ask yourself, how much more power does one organisation have if it acts alone compared to if it acts in tandem with others. Therefore we have to sooner or later, understand that we will have to bear collective responsibility for the some of the ills that this country has and it is not good enough to suggest that, ' I was not involved, I did not know about it'. Those kind of things really are reminiscent of what happened at the (unclear) trials. 

&#9;There is no comparison, this particular hearing is quite different from that. But I must be honest with you, I cannot help but recall those trials. The last thing I would like to say chairperson is simply add what Professor Sampie Terblanche has said, I won't go over the seven points of depravation that he talked about. But my view is that this is just the beginning of a very important process. If you look at how I introduced my little comments, you'll realise we've just barely scratched the surface. The question is how do we move from here to where, and the concept of a justice reconciliation statement in my view, is absolutely appropriate. Thank you.

CHAIRPERSON: We are deeply grateful to you Professor, for helping us to have this clearer picture, the historical perspective. I'm very grateful to all of you, who have come and all who have participated and shared and we want to thank our interpreter and the people involved with the technical business. 

&#9;How can you do that to me, after praising you like this

And thank you one and all we are all grateful. We resume at . I will 

happily not be here, you resume at a earlier, half past eight. 

Thank you very much.

HEARING ADJOURNS

