Taking on global corruption: Seriti Commission challenge

This opinion piece was first published in the Business Day on 26 August 2016. It was authored by Michael Marchant from the Open Secrets Research Project.

Civil Society groups Corruption Watch and the Right2Know Campaign have announced that they will be taking the Judicial Commission of Inquiry into the Arms Deal (Seriti Commission) on judicial review. They insist that the South African public has been denied both truth and justice for corruption that continues to cost the country billions. The review is an attempt to challenge impunity for an event that corrupted South Africa, but by forcing us to reconsider the evidence it provides an important opportunity to look at the role of the European Arms Companies in a deal that has proven deeply damaging to our democracy.

The findings of the Seriti commission, which cleared almost all parties of any wrongdoing has found little public support. One of the cheerleaders has been former President Thabo Mbeki who continues to regard critics of the arms deal as driven by an outdated but ever present stereotypical view that African governments are inevitably, or even uniquely, corrupt. There are undoubtedly some people who are trapped in a mindset that pathologises African governments.

The discourse around corruption is painfully blind to the role of corporations, banks and powerful governments in the ‘global North’, as the Arms Deal has shown. This is about corrupt local elites and global corporations willing to pay massive bribes.  Consider the recent #LuxLeaks and #PanamaLeaks revelations, detailing a range of illicit activities that contribute to trillions of dollars flowing out of poorer countries. The response was often to defend this type of financial system, and justify the rapid externalization of wealth by pointing to public sector corruption.

Further, we do not talk enough about South African corporate collusion to raise prices, nor of the powerful companies that shift their profits offshore and cry poverty when it comes to paying wages. We simply do not pay enough attention to role of the the private sector in corrupting public officials.

Mr. Mbeki know this, and his recent reports on the extent and negative impact of illicit financial flows should be commended for prompting us to be more critical of the role of multi-national corporations, banks, central banks and western governments in the theft of wealth and resources that need to be mobilized to improve the lives of people throughout Africa.

However, what Mbeki misses is that effective investigation of corruption in the Arms Deal is a crucial part of these efforts to shed light on what corruption really looks like.

A proper investigation of the Arms Deal will expose the public officials of the time that enriched themselves through the deal. However, it would also include scrutiny of the central source of corruption in the deal; the European companies that paid billions of rand to their agents in South Africa to influence the deal. Some of these companies have admitted in foreign courts or internal documents to their role in paying bribes in South Africa and all over the world. They profited handsomely in return.

An effective investigation would also consider the role of private banks and export credit agencies in financing arms companies, arms purchases, and providing channels and accounts into which bribes are paid. The lack of due diligence done in this regard is one of the central conditions that facilitates the movement of illicit money globally. 

The arms trade is one of the most corrupt industries in the world. It exemplifies that power and secrecy are the real factors that allow for corruption, and that it is a profoundly global phenomenon.Further it is an industry that has contributed greatly to the suffering of South Africans both pre and post 1994. Global arms companies and banks violated the arms embargo to prop up an Apartheid state at the height of domestic repression and foreign wars. It was also a central source of corruption in the Apartheid government, with nearly R500 billion (in current terms) being spent through the special defence account, with almost no effective auditing or oversight. 

The Seriti commission has failed to be the first meaningful step to expose the nature of this trade, but we cannot allow that to be the last word. This judicial review is an opportunity to set the record straight.  First we need truth, thereafter we must pursue justice.