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Global Economy > Can Globalization 'Go Social'?

South Africa’s Mbeki rebukes
a mining chief for 'badmouthing'

In a September online newsletter on the Web site of South Africa’s ruling African National Congress (ANC), President Thabo Mbeki challenged CEO Tony Trahar of mining giant Anglo American Plc about comments he made, in an interview with London’s Financial Times, indicating that he believed South Africa still had “political risk.” Mbeki asked: "Is [Anglo American] now saying that democratic South Africa presents the business world and our country with higher political risk than did apartheid South Africa?" The now famous letter is animating debate about corporate responsibility in an era of globalization.

Photo of MbekiThe government document that assesses our First Decade of Democracy, the 10-Year Review, makes an important point about the continuing disjuncture between the political and the business leadership in our country. Correctly, it argues that this matter should be addressed by both leadership echelons, to ensure that during our Second Decade of Freedom, these two sectors, the political and the economic, work together better, to accelerate the pace towards the achievement of the commonly agreed national goal of a better life for all.

Necessarily, because of its size and role in our economy, this discussion must include the leadership of the Anglo American Corporation, or what is now called Anglo American plc. There can be no doubt whatsoever but that we have to treat this corporate citizen as one of the important players within our national system of social partnership.

The Anglo American Corporation was established in our country in 1917. It grew over the decades to become the largest conglomerate in our country, active in many sectors of our economy. It has therefore been an important player in the processes that resulted in the level of development we achieved during the greater part of the 20th century.

Perhaps more than any other, this Corporation stood out as the quintessentially South African and Southern African company. It grew to become the giant it is because of its access both to our natural resources, and to cheap, unskilled labour in South and Southern Africa. Regardless of the wishes of its leadership, and like all other companies, it benefited from the criminally oppressive and exploitative labour, economic and political system instituted and maintained by the colonial and apartheid system in our country.

The company developed and grew in our country, and region, during a period of the highest political risk. Nevertheless it thought that it made good business sense to continue to expand its operations in our country, both before and throughout the years of apartheid rule. Such patently obvious political risk as existed then neither drove it offshore, nor diminished its appetite to expand its operations in our country....

Our defeat of the apartheid system has been a factor of material importance and benefit to Anglo American. It qualitatively expanded the possibilities for this company to become a global player. It now knew that if it expanded to the rest of the world, it would not have to contend with the hostility generated by the universal rejection of the apartheid system. Symbolising the global freedom it has achieved, it is now openly seeking investment opportunities in the People’s Republic of China, thanks to the victory of our liberation movement.

In this context, the company sought our government’s agreement for it to secure a first listing on the London Stock Exchange. The government accepted the argument advanced by Anglo American that it needed such listing because, unlike London, the South African capital market would not be big enough to finance the large investments visualised by the company in our country and region, and elsewhere in the world.

Over the years, many foreign business people have consistently told us that despite the many benefits they have derived from the defeat of the apartheid system, many South African business people continue to communicate negative messages about our country whenever they travel abroad, or receive visiting business people.

Some have argued against such foreign listings as was done by Anglo American, saying that there was no need to change domicile away from South Africa, to access the global capital markets. And yet others among these foreign business people have remarked about a phenomenon they do not understand, of the unusually high levels of liquid capital held by South African companies, which are not invested in our economy….

All of us are aware that business in our country has flourished in the last 10 years, our First Decade of Liberation. The reality is that business people in our country have never had it so good. It has therefore been difficult to understand why important business people would continue to hold and communicate negative views about our country, regardless of the actual and real situation in the country, which they know very well, and from which they benefit handsomely.

Earlier this month, on September 7, Business Day reproduced an article on Anglo American that had originally been published in the Financial Times. It was entitled “Anglo American reshapes itself to spread its wings globally.”

In the article, Mr. Tony Trahar, CEO of Anglo American plc, is quoted as saying: “I think the South African political-risk issue is starting to diminish—although I am not saying it has gone.” Mr. Trahar is quoted as saying this in the context of a speculative discussion by the Financial Times, about the possibility of the transfer of the Anglo American Head Office from Johannesburg to London.

This brings us back to the issue of the disjuncture between our political and business leadership mentioned in the government 10-Year Review. Both the ANC and the government would not know what political risk Mr. Trahar is talking about. What is this risk that has started to diminish, but has not gone? Is this the risk that persuaded Anglo American that it should list and re-domicile in London, while speaking to us only about the size of capital markets?

When foreign business people have told us about South African business people “bad mouthing” our country, is this what they were talking about? Have our business people been going around the world talking about a persisting political risk in our country? And what have they said is the cause and nature of this risk?

The poor and the despised who worked for Anglo American and other companies that made it during the years of white minority rule, paid a pittance for their labour, are today’s voters. For ten years they have made the point clearly and firmly that they care too deeply about the future of their children to allow their own painful past and the instincts it invokes, to determine that future.

They have chosen reconciliation rather than revenge. Rather than reparations, they have asked for an opportunity to do a decent job for a decent wage. Do they deserve to be computed as a political risk, when everything they have done and said has made the unequivocal statement that they are ready to let the past bury the past?

Is it moral and fair that these, who daily bear the scars of poverty, should suffer from the guilt of their masters, who are fixated by the nightmare of a risky future for our country, which derives not from what the poor have done and will do, but from what the rich fear those they impoverished will do, imagining what they themselves would have done, if they had been the impoverished?

Throughout the colonial and apartheid years, Anglo American did not seek a London listing, and did nothing that would generate speculation about the future of its Johannesburg Head Office. Is it now saying that democratic South Africa presents the business world and our country with higher political risk than did apartheid South Africa?

What information does it have, or projections into the future, that say that there is a persisting political risk in our country, on which Anglo American must base its decisions about its future? Would the company be willing to share this information, or projections, at least with the government, so that steps could be taken to remove the risk?