Everyone is talking and writing about Lex Libertas’s White Cross project these days. More so in South Africa than in America, which is a pity, but still understandable. In America it was merely another peripheral event in a news environment dominated by much larger issues.
High fuel prices are on everyone’s lips in America, as are the issues of America-Iran and the Strait of Hormuz, both of which naturally have a direct impact on fuel prices. Then there are also the approaching midterm elections and ongoing speculation about how the above issues will play into them.
It does, however, look like six of one and half a dozen of the other, as is usually the case with American politics. The Democrats take “pleasure” from the crises I mentioned because they believe it will make voters vote for them. The Republicans, on the other hand, apparently sit on a pile of money that is being used in their election campaign and will be used further to win voters over to their side.
But the above was just by way of introduction, because I want to write about another issue in South Africa that, like the White Cross project and American politics, also portrays two divergent convictions.
Just as pro-White Crossers stand opposite White Cross condemners, and just as Democrats stand opposite Republicans in America, so our South African business sector stands in two camps opposite each other.
There is the cooperative or appeasement approach towards the ANC-in-government, which stands opposite the direct-confrontation approach. The latter often follows after the former has been tried, but without results.
Yet there are noticeably some in the business sector who simply stick to the cooperative or appeasement approach. They convince themselves that it does bear fruit, even though very few such fruits are to be seen after 32 years of appeasing the ANC-in-government.
Our stumbling economy testifies to that.
Despite decades of high-level business summits, working groups and “CEO initiatives” under the leadership of well-known business personalities, macroeconomic bottlenecks such as labour rigidity, monopolies of state-owned enterprises, port and rail decay, and ongoing regulatory uncertainty have remained entrenched or have worsened over time.
Reference is made to a few “green shoots”, which are not disputable, but are also far from being grounds for conviction.
Private power generation has indeed been directly facilitated, such as through the removal of the 100 MW licence ceiling and the facilitation of private grid access, which has played a decisive role in stabilising electricity supply.
The continued existence of the Eskom monopoly remains, however, a source of great concern.
With a R30 billion surplus and highly questionable “Chinese” accounting methods, we are expected to forget about the massive historical debt burden that taxpayers had to absorb, which was basically written off by Treasury, as well as the continued above-inflation increases in electricity tariffs that are passed on to power consumers without alternatives.
What is the R30 billion surplus going to be used for? Debt repayment is no longer necessary. How much of it is going to be channelled again to cadres and their buddies?
We know by now how much creative thinking and planning is applied for that, from cadre employment to the awarding of tenders to cadres and their buddies at inflated prices, and everything in between in which the cadres, who are already planted in the enterprise, are masters.
Mention is also made of joint government-business sector task teams that have been brought directly into Transnet’s corridor management to restore rail lines and improve port efficiency.
There are signs of improvement, but the jury is still out on the matter.
Breaking down and destruction is quick, but building up takes long. More than 30 years of lack of maintenance, incompetent management and incapable executive staff cause enormous damage, as has indeed happened across South Africa.
But let us now be honest: business leaders who maintain continuous, public optimism and preach cooperation have often simply become a shield behind which the government hides in order to feign the appearance of cooperation with the business sector.
This has merely allowed the ANC-in-government to claim that it works hand in hand with business, while fundamental ideological reforms have been postponed and never truly considered because of the underlying socialist ideology to which the ANC is married.
The few “green shoots” referred to were merely the result of total desperation. The ANC-in-government simply had no shorter-term options, but I can give readers a letter that it made not one jot of difference to the ANC’s ideological views.
In the good old Marxist tradition, it is merely regarded as a temporary retreat, which will again be converted into a return to the socialist approach when the time is ripe.
Thus simply exploitation of business’s softness and good intentions.
The limits of cooperation
Here are the facts.
During periods in which business adopted a cooperative attitude towards the ANC-in-government, policies such as Broad-Based Black Economic Empowerment (B-BBEE), the National Health Insurance (NHI) and expropriation discussions continued without any meaningful shift towards free-market principles.
Despite the broader private health sector having offered comprehensive technical cooperation and compromise models to achieve universal health coverage, the government basically approved the NHI Bill in 2024 unchanged.
This proves that “appeasement talks” and “cooperation” failed to change the socialist ideology on important policy fronts.
When confrontation works
Let us next look at the other, opposite approach: direct confrontation.
Anglo American and Kumba aggressively opposed the Department of Mineral Resources over the Sishen rights.
It concerned a 21.4% undivided share in the mining rights of Africa’s largest iron-ore mine, the Sishen mine in the Northern Cape.
At the beginning of the century, when the South African state’s iron and steel producer, Iscor, was unbundled, it was divided into Kumba Resources, responsible for mining, and Iscor Steel, which later became ArcelorMittal South Africa.
Under the old dispensation, ArcelorMittal retained a 21.4% share in the mining right at Sishen. According to the Mineral and Petroleum Resources Development Act (MPRDA), all old-order mining rights had to be converted to new-order rights by 30 April 2009.
While Kumba successfully converted its 78.6% controlling share, ArcelorMittal failed to apply timeously for its 21.4% share, whereby that portion of the right lapsed.
What the ANC-in-government then did was, instead of awarding the lapsed 21.4% share to Kumba, which already owned the remaining 78.6% and operated the entire physical mine, to have the Department of Mineral Resources silently award prospecting rights over that 21.4% share to a politically connected, unknown BEE company called Imperial Crown Trading 289 (ICT).
ICT’s shareholders included prominent figures with close ties to the ruling elite, such as Jagdish Gupta, Duduzane Zuma and the former deputy minister Prudence Zako.
ICT paid nominally little for prospecting rights over an active, operational iron-ore quarry worth billions of rands.
Chris Griffith and the boards of Kumba and Anglo American, however, refused to yield to political pressure to sign a settlement.
They realised that if they were to accept it, it would create a dangerous precedent that would threaten property rights and the legal system across the entire mining sector.
They consequently launched a high-profile, unyielding court battle against both the Department of Mineral Resources and ICT.
They argued that the DMR’s award was illegal, procedurally flawed and fraudulent, and pointed out that ICT’s application apparently copied data directly from Kumba’s confidential files.
The outcome was that the mining executives’ firm stance led to a total legal victory.
The North Gauteng High Court declared ICT’s prospecting right null and void and illegal.
The Supreme Court of Appeal upheld the High Court’s judgment and found that the department’s decision was illegal and invalid.
The Constitutional Court finally ruled that once ArcelorMittal’s 21.4% right had lapsed, Kumba had become the sole holder of the mining right over the Sishen mine. The court permanently set aside the award to ICT.
The case remains a well-known watershed moment in South African corporate history.
It demonstrated the business sector’s willingness to use the judiciary to defend assets against irregular state-driven awards.
Many “smaller” battles have also already been won by civil organisations such as OUTA, Solidariteit, AfriForum and Sakeliga that have produced enforceable results where dialogue achieved little.
They have also, in some cases, taken the government to court over corruption and regulatory overreach.
Thus direct, straightforward and public confrontation has often delivered concrete results.
Concluding thoughts
Given the nature of our politics, it does not appear that we as a country will soon, if ever, be characterised at national level by business-friendly and free-market government approaches.
Rather, political consolidation at national level will yield more of the same as under the ANC-in-government as described above. Or perhaps much worse under a merger of radical ANC thinkers with the MKP and the EFF, which could result in nationalisation on a large scale.
I therefore foresee the increasing necessity of the direct-confrontation approach.
In my view, it will yield better results for as long as we are still a constitutional democracy.
The cooperative or appeasement approach simply does not work, or works very rarely, as I have pointed out.
It is pure window-dressing to pretend that the ANC-in-government believes that the private-sector approach is better.
In certain cases, intervention by the private sector is allowed by the government over the shorter term purely because the crisis cannot be handled by the state.
But it is regarded through the ideological lenses of radicals merely as temporary setbacks.
It does not change the unwavering belief in the socialist ideology with the state as the master over everyone and everything.
Piet du Plessis is a retiree with a long history of applied socio-economic development. A liberated Afrikaner who has moved beyond self-flagellation, he believes that he has been freed to live out his cultural pride and values, and to proclaim them openly when appropriate.
