DA questions Ferrostaal sponsorship of Mandela movie

Tim Harris to write to the NMF about their knowledge of the deal

Arms Deal offsets: R75m funding for Mandela film raises serious questions

Arms Deal company Ferrostaal has paid R75m towards the production of the Nelson Mandela movie "The Long Walk to Freedom" - one of their "offset" commitments under the multi-billion-rand Arms Deal. This raises questions about the moral appropriateness of an arms company, especially one tainted by allegations of corruption, investing in a movie about Nelson Mandela.

On Friday, Trade and Industry Minister Rob Davies finally shed some light on the controversial investment by Ferrostaal into Anant Singh's production of the "Long Walk to Freedom".  His answer, however, has raised more questions about the appropriateness of the deal and its benefits for South Africa.

In a reply to one of my Parliamentary questions the Minister confirmed that Ferrostaal contributed R75m to the R250m required to produce the movie. Half of this amount - approximately R37,5m - was structured as a grant. The other half was a loan, meaning that interest payments will accrue to a German arms company from the profits of the movie.

A cloud of corruption allegations hangs over Ferrostaal: they are under investigation in several European countries and their head offices in Germany were raided last year.  This raises serious questions about the appropriateness of their funding of a movie about a moral giant like Nelson Mandela. Would it not have been relatively easy for Anant Singh to raise funds from less questionable sources, especially for the telling of such an important and compelling story?

In addition, this deal appears to be the only offset investment by any arms company that is not industrial or agricultural in nature, raising questions about the opportunity cost of the investment. Could we have created more sustainable jobs, or secured more long-term economic returns, if the investment had been made into an industrial project instead?

In addition, it seems unbelievable that a single film project could result in 28 000 jobs as the Minister says it will.  Aside from the possible exaggeration of the number of jobs created, it is clear that the vast majority of what the Minister calls "jobs" would actually be short-term work opportunities.

I will be writing to the Nelson Mandela Foundation to establish whether they were aware of any association between the "Long Walk to Freedom" project and the German Arms Deal company and, if so, whether they believe such an association is appropriate.

Statement issued by Tim Harris, MP, Democratic Alliance shadow minister of trade and industry, October 31 2010

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