Victims of apartheid are demanding $50 billion from American and Swiss banks in compensation for profiteering from the "blood and misery" caused by white South Africa.
The lawsuit -- which was filed on June 16, the 26th anniversary of the 1976 Soweto Uprising -- accuses Swiss companies, Credit Suisse and UBS, and U.S.-based Citicorp of providing loans to the apartheid government in violation of UN-imposed economic sanctions. The suit is spearheaded by Ed Fagan, a U.S. lawyer who forced Swiss banks to pay $1.25 billion to World War II victims of the Nazi Holocaust in 1998.
The lawsuits claims that big business was central to the white-ruled economy that sustained the South African state during the apartheid years. Fagan claims that after World War II, many financial institutions and corporations or their agents, including many that had conspired with and made possible the Nazi regime's reign of terror, were willing, even anxious, to engage in the same type of business with apartheid South Africa. He argues that were it not for the "conspiracy" of banks such as Citicorp, Credit Suisse and UBS, apartheid could not have been endured as long as it did. "Our finances and banking were done by foreign bankers who even gave us credit for covert operations," he says.
The lawyers argue that the Nuremberg trials put companies "on notice." They were warned they could be held accountable "just as were the financial institutions and corporations that fueled the Nazi regime" for acts that supported crimes against humanity. The companies are accused of financing the minority white regime between 1985 and 1993, in violation of UN-imposed sanctions. The banks' loans allegedly allowed the cash-strapped regime to buy arms and continue its oppression of the black majority.
The action by the Apartheid Reparations International Legal Claim is being made in New York under United States laws that permit non-U.S. citizens to file claims of human rights abuses and torture in that country's courts -- provided the company concerned has U.S. operations.
The legal team plans to target more international banks and other companies, including some in Britain, France and Germany. German computer companies will be sued for providing the technology required for the infamous "pass" system which required all blacks, banned from the streets in white areas after dark, to carry passes at all times.
The initial claimants include a father of twin 12-year-old boys who died during one of the notorious "death squad" raids and Lulu Petersen -- the sister of 13-year-old Hector Petersen, the first among more than 1,000 black students to die in the Soweto uprising. The legal team expects hundreds of thousands of South Africans to join the suit. A special telephone hotline has been set up in South Africa for people who want to join the case.
The lawsuit is part of an ongoing debate over reparations and may represent the only practical means to obtain long overdue compensation. The very loans that financed apartheid rule are now crippling the post-apartheid regime.
A recent German-Swiss study found that 90 percent of all long-term loans to the South African government in the 1980s came from just four countries: Germany, Switzerland, the U.S. and the UK. But once the sanctions were imposed in 1985, German capital became the most important direct financier of apartheid. By the end of 1993, according to the study, South Africa was indebted to German business to the tune of about $1.6 billion. Most of that debt was public sector debt -- money that had been lent to the apartheid government.
The post-apartheid government -- with its emphasis on international diplomacy and foreign investment -- has continued to honor the debts incurred by the white minority regime. The fear is that defaulting on international loans may make it difficult to secure investment in the future. Mbeki has therefore also been reluctant to pursue the question of foreign liability, or demand from compensation from multinationals for past sins.
South Africa currently owes around $30 billion, which makes interest payment on international debt the largest budget item after education. It leaves the government in no position to help the 17,000 victims identified by the Truth and Reconciliation Commission, let alone provide for basic needs such as housing or healthcare. At the same time, identified perpetrators of human rights abuses who were granted amnesty by the Truth and Reconciliation Commission, are indemnified against civil actions by their victims.
M.P. Giyose, chairman of Jubilee South Africa, which is campaigning to cancel apartheid debt and provide reparations to victims, describes the legal action as a "last resort."
"We tried everything from providing detailed research to popular mobilisation ... but the banks, businesses and politicians refused to cooperate," he says.
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