19/04/2018 16:47 SAST | Updated 20/04/2018 05:51 SAST

Apartheid's Bankers To Face Official OECD Complaint

"Belgium's Kredietbank and its Luxembourg subsidiary (KBL) helped facilitate up to 70 percent of illegal arms transactions for the South African state."

'Joining The Dots' Report, Open Secrets, 2018

Two advocacy NGOs hoping to turn up the heat on banks accused of facilitating the apartheid regime's financial transactions involving arms are set to submit official complaints abroad next week.

Open Secrets and the Centre for Applied Legal Studies (CALS) say new evidence places two European banks at the centre of the apartheid era's arms and money-laundering machinery, neither of which have ever been held to account.

READ: SA's Murderous Arms Machine And The Bank That Cashed In (And Out)

According to the groups' joint media statement, Belgium's Kredietbank and its Luxembourg subsidiary (KBL) helped facilitate up to 70 percent of illegal arms transactions for the South African state, in contravention of a compulsory U.N. arms embargo.

Why approach the OECD?

The two South African NGOs will in coming days submit a complaint to the wealthy 35-member state Organisation for Economic Development (OECD), one of the few international mechanisms to keep corporations across borders in check.

The OECD's Guidelines for Multinational Enterprises set out standards, albeit voluntary, to prevent corporations' transactions and activities from leading to human rights violations. To put effect to these guidelines, each member country of the OECD has National Contact Points (NCPs) through which anyone can submit complaints over noncompliance of corporations.

By approaching the OECD, Open Secrets and CALS say they hope the NCPs in Belgium and Luxembourg will ultimately make findings on the conduct of the banks.

Researcher at Open Secrets Khuraisha Patel on Thursday said they will ask for an apology from, and investigation into, the banks, as well as for the OECD to put on record the alleged violations. The NGOs also want European banks to put in place new oversight mechanisms for financial institutions to avoid repeat offences.

​​​​Researcher and co-author of "Apartheid, Guns and Money" Michael Marchant says the ultimate goal is to ensure that the banks – among a host of other corporations worldwide – pay reparations for alleged complicity in human rights violations – or further, for aiding and abetting the apartheid regime.

Organisers say they recognise the limitations of the OECD, including a "lack of real teeth", according to a Daily Maverick column on Thursday, but hope the complaints may "publicly challenge authorities in Europe to grapple with... the harm caused by their corporations, and to show the mechanisms they tout can be effective".

Gaelen Pinnock | Scarlet Studio (via press release)

Justice for economic crimes in South Africa

At the People's Tribunal on Economic Crimes in February, Professor Bonita Meyersfeld detailed the banks' alleged role in aiding South Africa's state-owned arms company, Armscor: firstly, through creating shell companies to help erase the trail of money and secondly, in creating access to bank accounts.

Evidence bearers at the tribunal argued that through accounts managed by the banks, money to purchase arms could be transferred from Pretoria to the ultimate recipients without raising any alarms. More simply, by setting up fake companies and channelling money through them, the apartheid regime was able to oil its military machine without let or hindrance.

READ: Evidence Of State Capture The 'Tip Of The Iceberg' — Tribunal Panel

"Countries such as Belgium, France, Portugal and others were able to utilise private entities to enter into engagements with banks that very elegantly set up these shelf companies," she said.

In its preliminary findings, the tribunal panel led by former Constitutional Court justice Zac Yacoob wrote that sufficient evidence exists to warrant "at least a thorough investigation into the conduct of a number of entities, including the French government and Kredietbank".

READ: Apartheid Crimes: TRC Was 'Insufficient', Corporations Got Off Scot-Free, Says Witness

Their cooperation with the apartheid system, the panel wrote, was "in our view at least as dangerous and harmful as the conduct of the apartheid regime in terms of killings, torture, forced removals, wrongful imprisonment and the like".

Marc Davies
Panel of adjudicators at the People's Tribunal on Economic Crime between 3 and 7 February 2018 at Constitution Hill, Johannesburg.

"Indeed, the regime's conduct would have been more difficult to sustain, had it not been for the illegal trade in arms during this period. The forces of evil were strengthened and rendered virtually invincible by these sanction-busting entities," the panel wrote.

Patel on Thursday wrote that the "failure to hold corporations accountable [for these actions] has undermined efforts to make South Africa an equitable society".

She added: "Not only... have reparations not been paid, but South Africa has to pay back this odious debt with little understanding of the role of powerful corporations in the crimes of our past and present."

Representatives from Open Secrets and CALS will be in Europe to launch the complaint from April 24-27.