William Saunderson-Meyer on the extortion rackets hobbling mining and infrastructure projects
Oh, for those innocent days a decade ago when the word of the year — selected by international dictionary compilers like Oxford, Collins and Merriam Webster — was usually egocentric ephemera like “selfie”, “youthquake”, “geek” and “binge-watch”.
More recently, the tone became more serious and ominous, with “Brexit”, “fake-news” and “climate-strike”. No surprise, then, that last year it was words like “lockdown”, “pandemic” and “isolation”.
In South Africa — not yet, but soon — look out for force majeure. Admittedly, it’s a linguistic migrant. But still, this bit of French legalese is a concept that ordinary South Africans, especially those living along the eastern seaboard, are becoming uncomfortably familiar with.
A loose translation is “act of God” and it’s inserted in business contracts to excuse the parties of liability for natural and unavoidable catastrophes. As you’ll see from what follows below, even more loosely translated it means “you’re fucked” and there’s not much to be done about it.
The July insurgency in KZN and parts of Gauteng was the first time the phrase emphatically impinged on the public consciousness. In short order, the ports and rail operator Transnet declared force majeure on all contracts relating to traffic through the port of Durban, while the refining and pipeline operator, SAPREF, did the same as regards petrol and diesel supplies.
As a knock-on, Assmang resorted to force majeure on its ferromanganese production, as did Transalloys. So too, for a second time, did Transnet, when a cyber-attack hobbled operations at its Durban container terminals. ___STEADY_PAYWALL___
But the trend had started before the civil unrest. In May, Australian-owned Richards Bay Minerals (RBM), justified the closure of its entire operation, which contributes R8bn a year to the KZN economy, on force majeure, when its general manager was gunned down and equipment set ablaze, following ongoing friction with local tribal leaders. He was the second RBM executive assassinated.
Even earlier, in 2019, just across the border from the mutinous Zulu kingdom, an Austrian-South African construction joint venture relied on force majeure to abandon what was intended to be the highest bridge in the southern hemisphere and one of the longest main-span balanced cantilever bridges in the world. The Mtentu bridge was meant to be the first leap across the rugged Wild Coast landscape by the much needed but perennially delayed N2 highway that is meant to link KZN, Port St Johns and East London.
The reason? Violent protests by the locals.
In the media coverage of the decades-long delays that have plagued this gigantic infrastructural project, the explanation for the endless sabotage and protests usually boils down to a stirring tale of stout local resistance to environmental exploitation by rapacious foreigners. While that is indeed part of a complex situation, the other part of this often media-lauded “community action” is simple brigandry.
In much of rural South Africa, but especially along the East Coast of KZN and the Eastern Cape — areas where economic and social development are desperately needed — communities are playing a dangerous game of blackmail and intimidation. Corporates are held hostage and forced to make massive pay-offs to criminal gangs fronted by tribal chieftains and local leaders. And the ransom demands are not a note compiled from a jigsaw of words cut from newspaper headlines, but are couched rather in the seductive language of “transformation” and “enabling Black Economic Empowerment”.
You wanna play? You gotta pay. And as with most hostage situations, complying and paying the ransom is never a once-off cost. A naive readiness to shell out is quickly parlayed by the brigands into an instalment plan of financial misery, with regular and ever-larger sums being demanded.
The African National Congress government is unable or unwilling to intervene forcefully, so these feudal bandits are thriving. The passivity is in part because the SA Police Service is simply not fit for purpose, but also because there is an unacceptably high political cost attached to an ANC administration acting against the actions of a segment of the indigenous population group that comprises the bulk of its voters.
This is basically the same reason why President Cyril Ramaphosa failed to act for four days against the KZN insurgency. It has, too, the same result: it emboldens the criminals. Nor are these the unpredictable “acts of God” that the contract drafters have in mind, but instead the predictable behaviour of a criminal class.
Construction mafias have sprung up all over South Africa. Progress on any new project is a fraught and conditional process, with endless negotiations for paybacks, either in the form of cash or kind — clinics and recreational facilities that “the community” can use as pawns in future negotiations, by threatening to destroy them.
The RBM experience is a case study in this game of economic roulette. Its force majeure paused the implementation of a R6.7bn project that would contribute R100bn to the KZN economy over its 25-year lifespan. Operations could only be restarted after RBM restored the “flow of funds”, in this case, R130m, to the amakhosi, the traditional leaders in the four tribal regions that RBM operates.
Business Maverick editor Tim Cohen dug behind the bland RBM and government press releases to grapple with the implications. In an article last month, he wrote: “The company, the [amakhosi’s] community trusts, and the Department of Mineral Resources and Energy think they have solved the problem, but they haven’t. The mine reopens, which satisfies the company and shareholders, the government gets its tax and the ‘community’ groups get their payoffs.
“But I think it’s pretty clear that if you put R130m on the table, there is a huge incentive to create havoc to get it. Or to create havoc to ensure that other people don’t get it.”
There is little sign that the government comprehends these declarations of force majeure — escalating from the Eastern Cape two years back to the half dozen in Durban in July — are symptomatic of its failure to provide investors with the levels of law enforcement necessary for economic growth to take place. On the contrary, Ramaphosa’s administration continues to live in a parallel universe where mere wishing will make it so.
This week, Co-operative Governance and Traditional Affairs Minister Nkosazana Dlamini-Zuma announced that the ANC has been secretly working on a plan for a spanking new city, “somewhere” on the coast between Port St Johns and Margate, which are almost 250km apart. There’s not much detail on the closely guarded plans, except that the new city will be “coastal, smart, vibrant, integrated, prosperous, sustainable and resilient”, and that the ANC believes the development will “reduce unemployment, promote tourism and reverse migration and apartheid spatial planning”.
TimesLIVE reports that the city, referred to in ANC documents only as “the eastern seaboard development” will promote new black industrialists — read ANC cadres — while “capturing the imagination of the people in asserting the ANC as leader of society”, according to Dlamini-Zuma. While the ANC document has no timeline or budget, Public Works & Infrastructure Minister Patricia de Lille says that a complete strategy would likely be presented to the cabinet by April next year.
This is barmy stuff. Its only significance is that it illustrates that the disjuncture between reality in South Africa and the magical thinking of our government has not narrowed under Ramaphosa. On the contrary, perhaps under the delusion that he needs to be an inspirational leader, Ramaphosa has become the blesser of ever-greater leaps of fantasy on the part of his ministers.
On past experience and given that destructive “acts of God” are becoming worryingly frequent along our eastern seaboard, it’s probably safe to predict that the ANC’s model city is not going to be built soon. And that you won’t be able to get there by taking the Ramaphosa Bullet over a world-class engineering marvel spanning the Mtentu River.