TRACEY DAVIES: Beware big business in government

An article in the May 22 edition of The Economist titled “Business Leaders Fear that South Africa Risks Becoming a Failed State” noted that “for several years firms have sent staff to help run government departments, paying their wages”.

Apparently “corporate lawyers work at the prosecuting authority; bankers toil in the department of industry, several secondees are involved in Operation Vulindlela” and there is “insourcing of help to Mr Ramaphosa’s office”.

Now, I can hear you say: “Thank goodness. If only the private sector were running the country.” And there are many areas in which private sector capability outstrips that of the government.

But don’t fool yourself that these seconded lawyers and bankers are toiling away for your benefit. Business works for its own interests, and while those interests may sometimes align with what is best for society at large (we all need affordable, reliable electricity and drinking water that doesn’t kill us), this is certainly not always the case. 

Powerful industry associations in this country spend a lot of time and effort lobbying the government to make sure the rules suit big business, regardless of the impact on everyone else. That is why we have weak air pollution laws, a toothless carbon tax and no legal requirement to disclose wage gaps.

Lobbying is not regulated in South Africa, but just because we don’t have a US-style, in-your-face lobbying industry doesn’t mean it isn’t happening. In fact, it suits business enormously that most of the population is entirely clueless about its often effective efforts to influence the government in its favour. I was amazed to discover, in the days when I regularly interacted with officials in what was then the department of environmental affairs, that these officials often referred to the companies they were supposed to be regulating as “our clients”.

It’s been reported in the media on a number of occasions recently that various groups of CEOs have met with President Cyril Ramaphosa. But nobody ever seems to ask: “Hang on — which CEOs? What deals were made? Who is promising what to whom? And how will that affect the rest of us?”

The government’s role is not only to create an enabling environment for economic development, but also to ensure that it puts in place and implements appropriate rules and regulations to curb behaviour by business that harms people and damages the environment. While our government may now be failing at these things, it is no long-term solution to put the corporate fox in charge of the national henhouse.

The CEOs who meet regularly with the president, and who are seconding staff into government departments and paying their salaries, have not been elected to run the country. We seem to have already forgotten the lessons of state capture, which became so entrenched precisely because of unfettered, secret access to the president by businesspeople who sought to divert the resources of the state for their own benefit.

Any close interaction between state and business should concern every one of us, especially because the private sector is not obliged to abide by the standards of accountability the constitution requires from the government. 

The case for transparency

The same Economist article reports that “business groups stress that their efforts will be transparent”.

Really? Apparently this seconding has been going on for years, but I haven’t been able to find any information on government or industry association websites about where secondees have been deployed, who is paying them and what they have been instructed to achieve.

It would be easy for business to give credibility to claims that it seeks to act in the interests of all by simply being open and transparent about these interactions.

It doesn’t matter whether they are well-intentioned or not: we have a right to know about them. The adage “power corrupts, absolute power corrupts absolutely” is just as applicable to business leaders as it is to politicians. Letting captains of industry steer the ship of government, especially without any accountability, is not the route to a just and inclusive society.

* Davies is director of Just Share