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Financial Support to Apartheid: Outstanding Debts
Published online by Cambridge University Press: 12 May 2022
Abstract
This case note presents the arguments made in the amicus curiae brief submitted by the UN independent expert on debt and human rights to the OECD National Contact Point in the case brought in 2018 by Open Secrets and the Centre for Applied Legal Studies concerning the alleged complicit conduct of two banks during apartheid in South Africa. It also outlines the developments in this legal case and comments on why apartheid victims’ claims against financial accomplices are now more compelling than ever.
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- Case Note
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- Copyright © The Author(s), 2022. Published by Cambridge University Press on behalf of SOAS University of London
Footnotes
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Researcher, National Scientific and Technical Research Council - Argentina and Interdisciplinary Centre on Rights, Inclusion and Society Studies, Universidad Nacional de Río Negro, Patagonia.
References
1 See: van Vuuren, H A Tale of Profit, Guns and Money (2017, Jacana Media)Google Scholar; Gubbay, I “Towards making blood money visible: Lessons drawn from the apartheid litigation” in Bohoslavsky, JP and Letnar, J Černič (eds) Making Sovereign Financing & Human Rights Work (2014, Hart Publishing) 337Google Scholar.
2 See generally the Open Secrets website, available at: <https://www.opensecrets.org.za/apartheidbanksdocket/> (last accessed 25 March 2022).
3 For example, In Re South African Apartheid Litigation 617 F Supp 2d 228 (SDNY 2009) (Civ No 03-cv-04524), paras 160–63, available at: <https://casetext.com/case/in-re-south-african-apartheid-litigation-5> (last accessed 25 March 2022).
4 Final Report (1998, Truth and Reconciliation Commission South Africa) vol 4, chap 2 at 58.
5 Open Secrets and CALS v KBC Group. All documents related to the case are available on the OECD Watch's website, at: <https://www.oecdwatch.org/complaint/open-secrets-cals-vs-kbc-group/> (last accessed 25 March 2022). The amicus curiae brief is set out in full in the annex to this case note.
6 See the complaint submitted to the OECD National Contact Point by Open Secrets and the Centre for Applied Legal Studies (April 2018), available at: <https://www.wits.ac.za/media/wits-university/faculties-and-schools/commerce-law-and-management/research-entities/cals/documents/programmes/bhr/resources/OS%20CALS%20OECD%20Complaint%20to%20Belgium%20%20Luxembourg%20NCP%2017042018.pdf> (last accessed 25 March 2022).
7 See in particular, annex, sec (d) below.
8 See the statement signed jointly with the UN special rapporteur on truth, justice, reparation and guarantees of non-recurrence: “Apartheid and bank complicity case: UN expert urges reform of OECD review mechanism to protect human rights” (UN Office of the High Commissioner of Human Rights (OHCHR) press release, 27 April 2020), available at: <https://www.ohchr.org/en/press-releases/2020/04/apartheid-and-bank-complicity-case-un-expert-urges-reform-oecd-review?LangID=E&NewsID=25831> (last accessed 7 April 2022).
9 Banks and Human Rights: A Legal Analysis (December 2015, Foley Hoag LLP and the UN Environment Programme Finance Initiative), available at: <http://www.unepfi.org/fileadmin/documents/BanksandHumanRights.pdf> (last accessed 25 March 2022).
10 This informal group was created to discuss the implications of the UN Guiding Principles on Business and Human Rights for the banking sector. Its current members are UBS, Credit Suisse, Barclays, BBVA, BNP Paribas, Deutsche Bank, ING, RBS, Standard Chartered, UniCredit and JP Morgan.
11 “Paper on the implications of UN Guiding Principles 13b & 17 in a corporate and investment banking context” (December 2017, Thun Group of Banks), available at: <https://media.business-humanrights.org/media/documents/files/documents/2017_12_Thun_Group_of_Banks_Paper_UNGPs_13b_and_17.pdf> (last accessed 7 April 2022).
12 Letter from OHCHR (on behalf of the UN Working Group on Business and Human Rights) to the Thun Group of Banks (23 February 2017), available at: <https://media.business-humanrights.org/media/documents/files/documents/20170223_WG_BHR_letter_to_Thun_Group.pdf> (last accessed 7 April 2022).
13 “OHCHR response to request from BankTrack for advice regarding the application of the UN Guiding Principles on Business and Human Rights in the context of the banking sector” (12 June 2017, OHCHR), available at: <https://www.ohchr.org/sites/default/files/Documents/Issues/Business/InterpretationGuidingPrinciples.pdf> (last accessed 7 April 2022).
14 Open letter from JP Bohoslavsky to members of the Thun Group of Banks (19 October 2017, OHCHR), available at: <https://www.ohchr.org/sites/default/files/Documents/Issues/Development/IEDebt/LetterThunGroup.pdf> (last accessed 7 April 2022).
15 Letter from BankTrack and other civil society organizations to the Thun Group of Banks in respect of significant concerns regarding the Thun Group discussion paper (28 March 2018), available at: <https://media.business-humanrights.org/media/documents/files/documents/180322_Thun_Group_CSO_letter.pdf> (last accessed 7 April 2022).
16 “Independent expert on the effects of foreign debt: Purpose of the mandate”, available at: <http://www.ohchr.org/EN/Issues/Development/IEDebt/Pages/IEDebtIndex.aspx> (last accessed 25 March 2022).
17 See for illustration, UN Security Council res S/RES/418 (1977) and UN General Assembly res 40/64A (1985), 41/35B (1986) and 42/23B (1987).
18 The report is available in all UN languages at: <http://www.undocs.org/A/HRC/28/59> (last accessed 25 March 2022).
19 See D Acemoglu and Robinson, J Economic Origins of Dictatorship and Democracy (2005, Cambridge University Press)Google Scholar; de Mesquita, B Bueno et al. The Logic of Political Survival (2003, Massachusetts Institute of Technology Press)CrossRefGoogle Scholar; Wintrobe, R The Political Economy of Dictatorship (1998, Cambridge University Press)CrossRefGoogle Scholar.
20 See Conrad, J “Narrow interests and military resource allocation in autocratic regimes” (2013) 50/6 Journal of Peace Research 737CrossRefGoogle Scholar. Specifically for military expenditure by Latin American dictatorships, see Scheetz, T “The evolution of public sector expenditures: Changing political priorities in Argentina, Chile, Paraguay and Peru” (1992) 29/2 Journal of Peace Research 175CrossRefGoogle Scholar.
21 See Albertus, M and Menaldo, V “Coercive capacity and the prospects for democratization” (2012) 44/2 Comparative Politics 151CrossRefGoogle Scholar.
22 See, among others: Looney, R “The influence of arms imports on Third World debt” (1989) 3/2 Journal of Developing Areas 221Google Scholar; Dunne, J, Perlo-Freeman, S and Soydan, A “Military expenditure and debt in small industrialised economies: A panel analysis” (2004) 15/2 Defence and Peace Economics 125CrossRefGoogle Scholar; Smyth, R and Narayan, P Kumar “A panel data analysis of the military expenditure-external debt nexus: Evidence from six Middle Eastern countries” (2009) 46/2 Journal of Peace Research 235CrossRefGoogle Scholar.
23 Oatley, T “Political institutions and foreign debt in the developing world” (2010) 54/1 International Studies Quarterly 175CrossRefGoogle Scholar.
24 See JP Bohoslavsky and A Escribà-Folch “Rational choice and financial complicity with human rights abuses: Policy and legal implications” in Bohoslavsky and Letnar Černič (eds) Making Sovereign Financing, above at note 1, 17.
25 Measured in constant USD 2,000 per capita. Data compiled from the World Development Indicators (1970–2006, World Bank).
26 To estimate those probabilities, the other variables have been held constant.
27 The results remain largely unaltered if one controls for trade (imports plus exports as a percentage of GDP).
28 Cassese, A “Foreign economic assistance and respect for civil and political rights: Chile - a case study” (1979) 14/2 Texas International Law Journal 251Google Scholar.
29 See Bradlow, D “Don't waste a serious crisis: Lessons from South Africa's debt crisis” in Bohoslavsky, JP and Raffer, K Sovereign Debt Crises: What have we learned? (2017, Cambridge University Press) 220Google Scholar.
30 See T Addison “The political economy of the transition from authoritarianism” in P de Greiff and R Duthie (eds) Transitional Justice and Development: Making Connections (2009, Social Science Research Council) 110; and, generally, D Sharp (ed) Justice and Economic Violence in Transition (2014, Springer Publications).
31 Convention against Torture and Other Cruel, Inhuman or Degrading Treatment or Punishment, art 4; International Convention on the Suppression and Punishment of the Crime of Apartheid, art 3(b); Supplementary Convention on the Abolition of Slavery, the Slave Trade, and Institutions and Practices Similar to Slavery, art 6; Convention on the Prevention and Punishment of the Crime of Genocide, art 3(e); Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, art 1(2); UN Convention Against Transnational Organized Crime, art 5(1)(b); International Convention for the Suppression of the Financing of Terrorism, art 2(5)(a); International Convention for the Suppression of Terrorist Bombings, art 2(3)(a); Protocol against the Smuggling of Migrants, art 6(1)(b); Statute of the International Criminal Court, art 25(3); and the Statutes of the International Tribunals for Rwanda, art 6 and for the Former Yugoslavia, art 7.
32 Charter of the International Military Tribunal, art 9 (8 August 1945) 59 Stat 1544, 82 UNTS 279.
33 On the dissolution of IG Farben, ordered precisely because of its implication in serious violations of international law during World War II; see Control Council Law No 10: Punishment of Persons Guilty of War Crimes (20 December 1945) in Enactments and Approved Papers of the Control Council and Coordinating Committee (1946, Office of Military Government of Germany (US)) I at 306.
34 In re Tesch (The Zyklon B case) 13 Ann Dig 250 (Brit Mil Ct 1946), reprinted in UN War Crimes Commission, Law Reports of Trials of War Criminals (1947) 1 at 93; United States v Flick (22 December 1947) in Trials of War Criminals Before the Nuremberg Military Tribunals Under Control Council Law (1952) 10/1.
35 “Study on the right to the truth” (report of the OHCHR, 8 February 2006), UN doc E/CN.4/2006/91.