BMF Statement on State Capture Report

January 18, 2022

After careful review and reflection on the report, the Black Management Forum (BMF) welcomes both the publication and some of the recommendations in Part 1 of the State Capture Report.

The promise of a developmental state that prioritizes ethics and good governance has been undermined by deep-rooted and institutionalized corruption. The report offers the country an opportunity to honestly reflect on the kind of society we deserve and, more importantly, the kind of leadership needed to build a democratic and prosperous country.

The BMF commends the work of the Commission in leading a complex process that lasted nearly four years. We believe that what was uncovered did not reach the depth of the state of corruption in the country, but gave us insight into key issues relating to governance, legislation and the shameless abuse of power. political and economic.

The State Capture phenomenon, as we have come to understand it, has four main characteristics:

Create a shadow state where decisions are no longer made by the executive;

Reorient public entities (SOE), government institutions and plunder their resources;

Replace good and efficient people with flexible co-conspirators in public enterprises and government institutions, and

Weakening of state institutions

The extent of corruption uncovered has a negative impact on the transformation agenda. Disregard of the PFMA, the Executive Code of Ethics and other key legislative requirements delegitimizes the government’s commitment to transformation. It is therefore very concerning that the ruling party seems to be in internal conflict over how this report should be interpreted and its recommendations implemented. Minister Gwede Mantashe has come out to defend cadre deployment and suggests the report could launch attacks on deployment, which can undermine transformation and democracy. The ANCWL said comrades should not use the report to fight internal party battles. There seems to be a prevailing view within the ANC that the report’s recommendations should be implemented in a way that does not harm the party. Yet the whole State Capture project was only possible because of the ANC as the ruling party. The ANC’s response so far does not inspire confidence at all that the recommendations in the report will be prioritized and implemented.

As mentioned above, one of the key features of state capture is the replacement of good and efficient people with flexible co-conspirators in state institutions, across all three levels of government and in especially in public enterprises. The BMF has always believed that a group of independent professionals composed of highly recognized and experienced individuals should be created. This should be supported by the creation of the necessary legislation to give it constitutional and legal life. This body should help the public and private sectors to recommend leaders for leadership and strategic positions. Part of the job of this panel is to screen potential leaders who seek to serve on boards of directors, to hold strategic positions throughout the state, including commissions. The fundamental principle that will guide the Group is the transformation program. We therefore reiterate this call for a panel of independent professionals to be established to help and curb corrupt future leaders and phantom agendas in the upper echelons of management.

While corruption in South Africa has become synonymous with the public sector and government, what this report has clearly revealed is the complicity of the private sector in aiding and abetting state capture. The BMF believes that the spotlight needs to be shone not just on the local businesses involved in state capture, but also on the many multinational corporations. Companies that have entered our country and committed crimes they would not dare to commit in jurisdictions such as the UK and the US. Of the other companies that have been singled out, Part 1 of the State Capture Report focuses on an American company, Bain, as having been central to the capture of SARS by being involved in 3 of the State Capture phenomena mentioned above. above :

Bain, through his relationship with former President Jacob Zuma, was aware of the appointment of Mr. Tom Moyane to lead SARS before the public. In fact, Bain was so entrenched in state capture that they were literally at the table with President Zuma when the capture of SARS was being planned.

Bain then worked with former President Jacob Zuma and Mr. Tom Moyane to oust SARS by firing effective and efficient individuals and replacing them with more flexible ones.

These co-conspirators within the SOE then weakened the agency and crippled its ability to investigate tax evaders in South Africa – the most prominent of them being notorious members of the Gupta family.

The weakening of SARS had a huge economic impact in our country which is still plagued by the stubborn threats of inequality, poverty and unemployment. Taxes collected by SARS are used by the government to provide services to its 60 million people, as well as to create an environment for the economy to thrive and create jobs.

The BMF is of the view that all companies that are singled out by the report should be expelled from doing business in the country for facilitating the weakening of state organs. This action will send a strong message to the country’s private sector and the international business community, that their influence must be informed by the principles of justice, fairness and equity. The companies and individuals involved should be prosecuted and sanctioned accordingly, even if they have refunded the money.

We reject the Commission’s recommendation on Deferred Prosecution Agreements. This continued softening of the consequences of unethical business behavior will further set back the country’s transformation trajectory. The discussion in the country misses this key element of powerful corporations being properly dealt with, which have used their influence to intimidate and cripple the state. Business is at the heart of society and is the lifeblood of society. Therefore, businesses must be held to the highest ethical standards as they guide the lives of ordinary people in our country.

“The BMF argues that the capture of major state-owned companies has been a heinous crime against the South African people and that no company or person should be coddled by a credible South African business person or organization. In fact, the companies and individuals who have now been officially confirmed in the report as having aided and abetted state capture should at best face criminal prosecution and at least the most severe penalties,” the official said. BMF vice president, Esethu Mancotywa.

Posted by BMF, January 18, 2022