ATC120911: Report of the Portfolio Committee on International Relations and Cooperation on the seminar held on the involvement of South African companies and personnel in security related activities and business abroad, the impact on the conduct of foreign policy abroad, dated 29 August 2012
Report of the Portfolio
Committee on International Relations and Cooperation on the seminar held on the
involvement of South African companies and personnel in security related
activities and business abroad, the impact on the conduct of foreign policy abroad,
dated 29 August 2012
The Portfolio Committee on International Relations and Cooperation held
the seminar on 7 March 2012 at the Strand Hotel,
Members in attendance were:
African National Congress
Ms R Magau
Ms W Newhoudt-Druchen
Mr I Davidson
Mr B Eloff
In attendance were Ms L
Adviser, Mr L
, Committee Secretary and Mr D
, Committee Researcher.
The experts invited to facilitate the seminar were Dr
Institute of Global Dialogue (IGD); Dr
and Catherine Grant from the South African Institute
of International Affairs (SAIIA), as well as Mr Clive
from Standard Bank Main office,
Opening and statement of objectives
welcomed all those in attendance
and gave an overview of the objectives for the seminar. He highlighted that the
Presidency announced a deliberate policy of economic
diplomacy in 2010. A number of high powered delegations of South African
business fraternity have been seen accompanying the President to several trade
missions he took to different countries around the globe. This is aimed at
deepening economic relations and growth in partnerships for the good of the
The conduct of South African business abroad
should be complimentary, not contrary, to the aspirations and conduct of South African
foreign policy. It would be useful to debate the issue, and learn more on the
successes accrued to and inherent challenges facing South African companies
doing business abroad.
It would also benefit the Committee to know if
there could be other approaches to this pronouncement. The Committee is in
support of a code that is facilitative and not impeding on the operations of
South African business, as it is a fact that there is a scramble now for
African markets and natural resources.
Through the activities of the African
Renaissance Fund among other interventions, conflict situations were lessening
and the environment for sustainable economic activity have been created. It
could only be fair for South African companies, small or large to benefit from
such environments, by making sure they are there doing business.
However, the Committee wishes to see these
businesses conducting themselves in a way that will protect the image of the
country: through practising fair labour practices; against corruption and ill-discipline;
operating within the laws of the host countries and upholding South African
values (UBUNTU), while keeping expected international standards.
There have been recorded challenges relating to
the conduct of
the issues of hegemony are
said to be compounded by the conduct of our companies abroad;
the image of this country
and its people has been greatly compromised due to the conduct of businesses
companies allegedly could not resist the temptation to be involved in
partisan conflicts abroad, corrupt practices and bribery to win favour over
their competitors. Labour practices are reported as less favourable to what
obtains in South African business environment.
However, the Committee is aware of a lot of good
South African companies are doing in the continent and beyond infrastructure
development and investments, human resource development, knowledge transfer,
building post conflict institutions, technical assistance - there is a huge
South African footprint in terms of business investments. The question is,
however, whether the critics and the people of
The other issue related to both companies and
individual South African personnel engaged in
and security firms abroad. In
recent times, this phenomenon reared its ugly head in many occasions. This was
of serious concern to the Committee as to the apparent involvement of companies
and individuals in these illegal activities.
These practices do a lot of harm to the image of
the country and again these individuals need to be educated of the challenges
they impose on the conduct of international relations abroad. Their involvement
in illegal practices for financial gain impedes the way the country relates
with the outside world.
Presentation by Dr
involvement of South
African companies and personnel in
and security firms abroad; the impact on the
conduct of foreign policy abroad
In his presentation Dr
began by giving some background on the issue of
Private Security Companies (
) and noted that
International conventions have made provisions against
and private military security companies engaged
in illicit military activities. The UN Convention on Mercenaries 1989 outlaws
mercenaries and illicit activities of private military and security companies.
The universal revulsion of mercenary activity led, in time, to the OAU
Convention for the Elimination of
The South African legislative framework is as follows:
Foreign Military Assistance Act
15 of 1998
Prohibition of Mercenary
Activities and Regulation of Certain Activities in Areas of Armed Conflict Act
27 of 2006 (received
presidential assent in November 2007, but yet to receive presidential
proclamation necessary to repeal 1998 Act).
Since the end of the Cold War, there has been a significant
increase in the number of
globally and in
activities can compromise, undermine, and negatively affect
The activities of
In 2011, allegations that South African
were hired by Muammar Gaddafi and his son
Islam did a lot of damage to the countrys image and role in the African Union
effort to mediate in the conflict. As a result, questions were asked about the
As a result of the range of clients that call on
services, and the changing nature of warfare in the
generation network centric wars;
business and criminal
networks; extractive industry investments and exploration in volatile
are performing an ever
wider range of services for clients. Such services include operational
deployments and command services in conflicts; training, advisory, intelligence
services; counter-insurgency operations or support missions; non lethal
security and operational support functions.
In cases where
in conflict, it is important to note that International Humanitarian Law (IHL)
which governs warfare and classifies people into civilians and combatants, does
not make provision for
(hired guns) whether they
are contracted by state or non-state actors. This leaves
in a proverbial legal no mans land.
contracted by governments that do not want to risk regular military personnel,
or reputation in domestic or international operations.
South African foreign policy challenges
In 2011, several rumours and reports surfaced about South
activities on the side of Libyan rebels,
and that a group had been contracted to protect Muammar Gaddafi and some of his
family members. The latter type of cases can reflect negatively on
It has to be noted that International Humanitarian Law (IHL)
has not been able to criminalise mercenary activities, but
can be held accountable according to the rules of IHL in cases where
commit war crimes. This means that the South African
governments response to mercenary and
activities has to consider whether war crimes were committed.
An evaluation should be made of the current system that
grants approval to
to act outside
services such as
protection, training, and military assistance are relatively non-controversial.
However, the South African government could consider stricter controls over
that provide the following type of services in
conflict environments: when
are positioned at
military-specific locations to provide either offensive or defensive services
in theatre; when
are contracted to provide
specific targeted killing services (note covert operations); when
utilise and are contracted to operate high-tech and
unmanned weapons systems; use electronic surveillance and control information
The Foreign Military Assistance Act (1998) prevents any
foreign military assistance without prior authorisation from the National
Conventional Arms Control Committee (NCACC). It may be necessary to audit,
review and interrogate the current regime to determine its effectiveness.
Furthermore, it would be to establish whether there is a need for further
change to prevent cases where the South African government may be embarrassed,
or its foreign policy objectives undermined by
In the case of a scenario reflected in the paragraph above,
it may also be necessary to interrogate the extent to which NCACC decisions on
foreign military assistance are informed by the mandate of the Department of
International Relations and Cooperation (the Department), regarding South
African diplomatic activities, South African Secret Service, and domestic
intelligence. Decisions whether to allow
in specific theatres have to be assessed against the backdrop of ongoing
Observations by members of the Committee
The role of South African embassies in conflict
countries should be redefined.
The use of child soldiers in conflict situations is
unacceptable. Hopefully there are no South African companies involved.
It should be investigated whether there were
companies engaged in illegal activities hiding in
Local security companies are sometimes linked to
foreign entities. Credibility of these accusations should be established.
It would be useful to establish how many South
African companies are involved abroad in private military security issues.
There should be monitoring of the activities of
South African companies abroad.
There should be a differentiation between lethal
and non-lethal activities of private security companies.
The right to work should not be impinged upon by
measures to curb the activities of private security firms.
It should be established whether the South African
and the extent of citizenry
involvement in such activities.
The focus areas in current legislation being
reviewed must be explored.
Reponses by the presenter
Embassies are not really meant to be a watchdog,
but if they are aware of
causing problems for
Child soldiers are typically associated with rebel
People or groups hiding out in
Of the 62
9 are South African.
A legislative review will focus on chain of command
The South African government does not use
Presentation by Ms Catherine Grant: Thoughts on the concept
of a code of business conduct for South African companies abroad and the impact
of their activities on the conduct of foreign policy abroad
Ms Grant began her presentation by noting the fact that
while issues concerning the responsibilities of business have been an
ongoing debate, today the conception of Corporate Social Responsibility (CSR)
marks the start of a new era. Corporate Social Responsibility gives business a
new role and purpose. The objective of CSR is entrenching the idea that
business needs to earn their licence to operate and thus act in a manner in
line with society expectations. Hence a commitment to corporate citizenship
is the key to long-run profitability for individual firms by ensuring public
support for the market economy.
Two official influences that have led to
movements of business conduct:
Firstly, the continuing
official public concern with environmental issues and threats such as green
house gas emissions has led to the idea of a movement in actions and policies
of sustainable development. Secondly, the hostility towards Multinational
Enterprises (MNE) in general that their behaviour is profit motivated.
A code of conduct sets rules outlining the
responsibilities of or proper practices for an individual or organization. It
is defined as Principles, values, standards, or rules of behaviour that guide
the decisions, procedures and systems of an organization in a way that (a)
contributes to the welfare of its key stakeholders, and (b) respects the rights
of all constituents affected by its operations. A code of conduct is a
voluntary set of standards describing the behaviour expected from the people in
These standards exist
so that companies conduct their business in a framework of relevant
laws, regulations and internal policies.
Recommendations were made for bringing the state and business closer and
The relationship should be
more interactive between government and business.
labour and civil society should be involved more comprehensively.
Business needs to
communicate more about its approach to development, and more success stories
must come to the fore.
fringe study on South African companies on the continent is a good
start and long overdue.
There is a need to
consolidate information on existing codes and compliance by South African
companies already doing business abroad.
There is a need to upscale
skills of government officials to interact and better understand interests of
the private sector e.g. enhance economic diplomacy training within the Department.
There is a need to advocate
for a strong organised business both locally and on rest of the continent.
The code of conduct should be formulated by
government in conjunction with business. However, it would be strongly
recommended that it is owned by business itself in terms of its implementation.
Presentation by Mr Clive
A perspective from business formations in
Standard Bank will be 150 years old in May and employs over 50 000
people. It has operations in 53 countries with 17 of those being in Sub-Saharan
Africa. It is
Recommendations by the presenter
It would be preferable to have a body/entity which will be a custodian
of a code of conduct for companies. However, such a body should also monitor
all companies from sub-Saharan
Observations by the members of the Committee
The Committee needs statistics on good and bad
behaviour by companies to fully comprehend the depth of the situation.
The image of
Interaction at NEDLAC is not sufficient; a lot more
consultation is needed.
Standard Bank was congratulated for its efforts in
On their own, Codes are not sufficient.
Applicability and monitoring are an issue only
because the regimes are not strong enough.
There is evidence of contradictions in the laws of
different countries in which these companies operate. There is a need for a set
of minimum standards that all companies must apply in all countries in which
they have operations. However, South African companies must not be
disadvantaged in the African markets.
Responses by the presenter
South African businesses need to be aware of their
role in strengthening
Codes apply to a range of companies that
voluntarily subscribe to them.
A company like
its employees equally in countries like
The envisaged code of conduct must extend to
business operations in IBSA and BRICS countries.
NEDLAC engagements have been meaningful. However,
it is clear that far more than NEDLAC is needed. This mechanism is not
A name and shame campaign for companies that do not
behave well should be considered.
Presentation by Dr S
possible alternatives to guide South Africas future business engagements on
the continent, within the confines of foreign policy?
The basis for examining whether there should be a code of conduct or not
depends on the framework needed for guiding our foreign policy. It should be
decided whether it would be economic diplomacy combined with political
diplomacy. A good balance should be found between these two elements, and both
must be driven at the same time. Economic diplomacy must be a tool for
extending elements of foreign policy.
There is pressure on foreign policy to provide evidence that it
concretely contributes to domestic priorities. This presupposes that economic
diplomacy must be prioritised. Huge delegations on presidential trips abroad
must be meaningful and work towards alleviating poverty in
At times South African companies promise more than they can deliver,
creating unrealistic goals. Negotiations within NEDLAC collapsed because of
mistrust, aloofness and perceptions that
recommended that the options
Nationally, we need either a code or a charter
between state and business to lay down a framework for doing business in
Perceptions abroad are that the face of
There is no greater consensus between South African
business and government. Businesses should work together with government to
Strong and decisive public diplomacy is needed.
Communication is very poor communication from the Department to the middle
Business should take the initiative and encourage
others to adhere to good, ethical conduct.
There are still unresolved challenges within the
region, such as harmonisation of industrial policies, communication and
interconnectivity impacting on regional intra-trade. There should be an exerted
effort between government, the private sector and civil society to address
Either way, strong leadership in the above
groupings is needed.
Observations by members of the Committee
Perceptions can be managed with the correct level
A lot can be learnt from
Sullivan principles are playing out in a very
interesting way in relation to South African business abroad. (Sullivan
principles: Rev Leon Sullivan, an African-American minister who was a member of
the board of General Motors, introduced the principles in 1977, and later
launched them jointly with the UN Secretary General
in 1999. This code of conduct consisted of
seven requirements a corporation was to demand for its employees as a condition
for doing business. In general, the principles demanded the equal treatment of
employees regardless of their race both within and outside the workplace).
These demands directly conflicted with the official South African policies of
racial discrimination and unequal right in the workplace.
Business and government need to work more closely
together because it is government that takes the brunt for the conduct of South
African companies abroad.
In conclusion, the Chairperson noted that economic diplomacy should be
considered an extension of South Africas foreign policy, and that it would
be important for the Committee to perhaps engage with the
Portfolio Committee on Trade and Industry on any future engagements held on the
issues of South African companies abroad, to consolidate recommendations on the
way forward on this issue.
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