From Rhetoric to Responsibility:
Making reparations to the surviviors of past political violence in South Africa

Chapter 7

Financing a Reparations Scheme for Victims of Political Violence

by Brandon Hamber & Kamilla Rasmussen

Brandon Hamber is an independent consultant.

Kamilla Rasmussen is a former intern at the Centre for the Study of Violence and Reconciliation.

Making reparations or granting compensation to those who have been politically victimised is first and foremost not a financial issue. It is an issue of principle and policy. Furthermore, the TRC's recommendations are not primarily, and certainly not exclusively, about financial compensation. Reparations for those who suffered in the past, according to the TRC final report, should range from the erection of headstones to programmes for better access to social services and community reconstruction, as well as financial compensation (see Chapter Two).

However, it was felt that it was important to make some mention of the financial component of the TRC's recommendations. This was done not because we see cost as the issue that should determine the outcome of the debate on whether reparations should be granted, but in order to preempt a situation where opponents of reparations attempts to use financial arguments to obfuscate the issues.

In South Africa (SA), the rights of victims in the political and criminal arena seem to be routinely overruled by potential cost factors. There seems to be a covert accord between business and the government that any reparations programme would be too expensive. This is odd considering no substantial investigations or research into the issue has been undertaken by government or business.

This chapter, therefore, provides some basic information on the reparations issue, in the hope of providing information that ordinary citizens, policy makers and civil society could use in the reparations debate.

The TRC's Recommendations Regarding Financial Reparations

By October 2000, government, with some foreign donor assistance, had earmarked R340 million (less than 34 million Pound Sterling) for the reparations process. This is minuscule next to the funds spent on granting amnesty and laughable in the face of the civil claims victims have forfeited in the name of furthering reconciliation. To date, 12 000 people have received about R2 000 to R6 000 each as a so-called urgent interim payment. Combined, this accounts for about 10% of the funds allocated.

The TRC recommended that in addition to other types of reparation, individual reparations grants should be made. The TRC recommends a payment of R21 700 p.a. (based on the average household income) for six years to about 22 000 victims. If this occurred the financial obligation would be R477, 4 million p.a. or R2, 864bn over six years. It is interesting to compare the amounts recommended by the TRC for reparations to other line items in the government budget.

For purposes of comparison, an annual payment of R477, 4 million would represent only 0,06% of the Gross Domestic Product, which, in 1999, was R 801 billion.

In terms of specific budget line items, the percentages that proposed financial grants would consume are summarised in the table below.

Budget Items	Amount	Comparing R477.4 Million Relative to Item
Total government expenditure (2000/2001)	R233 billion	0.20%
Defence (2000/2001)	R13,766 billion	3.47%
Higher education (universities and technicons) (2000/2001)	R7,028 billion	6,79%
Combined expenditure of all provinces on welfare, including in the main, social welfare transfers such as old age pensions, disability and child maintenance grants (2000/2001)	R20,398 billion	2,34%
Correctional services (2000/2001)	R5,787 billion	8,25%
Poverty Relief Fund (2001/2002)	R847 million	56,4%
National parliament (2000/2001)	R416 million	114,76%
Demutualisation of Old Mutual*	Led to the collection of about R577 million by government in 1999/00	82.8%
* Presumably, Sanlam's demutualisation could have raised/will raise an equivalent amount.

From the above table, it can be seen that financial reparations, as one component of the TRC's recommendations, cannot be said, in real terms, to create an inordinate drain on the fiscus.

Furthermore, developing countries have borne these sorts of costs before. In Chile - a country with a Gross Domestic Product (GDP) per capita not very much higher than SA's - children of those killed during the military dictatorship of Pinochet have a right to a monthly pension until they reach 25 years of age. For the rest of the beneficiaries the pension is for life. The monthly pension is between R1 400 and R2 000 for the family of the deceased depending on the number of dependants. About 800 scholarships a year are also granted to the families of victims. Victims get free medical and psychological care. The fiscal burden of this programme is about R120 million per year.

In South Africa, however, it is how government budgets and prioritises issues that may be more of a problem for financing reparations than the availability of funds. Despite the fact that, compared to other budget items, reparation costs look relatively low, the financing of a reparations programme, over and above other government programmes, will invariably clash with the commitment of government's Growth Employment and Redistribution (Gear) Strategy to reduce the share of State spending as a proportion of GDP.

Today, nearly half a century after the liberation of the Nazi concentration camps, the Federal Republic of Germany has paid out more than $50 billion in the form of reparations to the State of Israel and indemnification to Holocaust survivors. The German Finance Ministry estimates that it will pay out almost $20 billion more by the year 2030, when according to its current calculations, the last survivor will have died. Yet what the German government calls Wiedergutmachung, literally meaning 'making good again', can never truly be complete. Most Jews and some Germans avoid the term Wiedergutmachung altogether, considering it to be naïve. (Michael Wise, 1993)

There are also problems of inherent structural conservatism in the budgeting process. Government generally favours a continuation of spending on items that have been spent on before. For example, national government is due to be allocated about R97 billion in the 2001/2002 budget, but only about R900 million (or about 0,93%) is available for new expenditure projects. New items are normally difficult to include on the government budget without the political will to do so.

For any new project to be given access to hard fought-over resources it is critically important that it be covered by a priority area listed in the Cabinet's statement of fiscal priorities which is finalised in about May each year (but is not open for public scrutiny). Recently, listed priorities are understood to have included, inter alia defence re-equipping, HIV-AIDS, the criminal justice system and early childhood education.

Thus, ensuring dedicated funding for a reparations grant scheme as part of the overall reparations proposals, within the current government frame of thinking, will depend on the following factors:

• political commitment to funding a comprehensive reparations programme;
• reasons as to why a reparations grant scheme should be prioritised over and above other priorities;
• whether the social benefits of the scheme can be comprehensively demonstrated, and
• the degree to which it can be shown that allocating addition resources to reparations is necessary as the benefits from such funding cannot be derived from other social programmes.

Nonetheless, this need not mean that those campaigning for reparations, politically speaking, need to accept the current conservative government economic frame as a legitimate method for the allocation of resources.

The Role of the Business Community

One of the sectors the TRC called on to redress its past was business. It is indisputable that until the dying days of apartheid, the system continued to create an economic environment conducive to White economic advancement. Apartheid was beneficial to many local and international businesses. As a result, the TRC directly highlights the responsibilities of the business sector. The Final Report, Volume 5, Chapter 6, states:

The business sector failed in the hearings, to take responsibility for its involvement in state security initiatives, including those associated with the national security management system, specifically designed to sustain apartheid rule. Several businesses, in turn, benefited directly from their involvement in the complex web that constituted the military industry. (pg. 252)

The TRC also links this sectoral responsibility to current government policy. According to the TRC, government, and the business sector, share obligations to redress the imbalances of the past. In its final report, volume 5, Chapter 8, the TRC states:

The huge and widening gap between the rich and poor is a disturbing legacy of the past, which has not been reduced by the democratic process. It is morally reprehensible, politically dangerous and economically unsound to allow this to continue. Business has a particularly significant role to play in this regard. (pg. 318)

Thus, the liability of the business sector cannot be divorced from the current environment which is being created by government policy - an environment suited largely to the whims of big business. It will not be sufficient for government to deflect attention to the business sector without showing its own political commitment to ensuring that reparations are made and the rights of victims realised.

The TRC recognised the potential economic impact of reparations and made a number of suggestions on how to fund the process. The instruments to achieve these goals and to incorporate a role for the beneficiaries of apartheid and business in addressing the past, include:

• a wealth tax;
• a once-off levy on corporate and private income;
• each company listed on the Johannesburg Stock Exchange to make once-off donation of 1% of its market capitalisation;
• a retrospective surcharge on corporate profits extending back to a date to be suggested;
• the suspension of all taxes on land and other material donations to formerly disadvantaged communities;
• responsibility for the payment of the previous government's debt to be critically reconsidered, and
• the SASRIA Fund (contributed to by business as a safeguard against material loss during the latter part of the apartheid years) as a source of funds for reparation, reconstruction and development.

These recommendations were meant as general macro-economic policies to address the extreme inequality of the society. They were not constructed solely with an aim to finance reparation. The suggested policies have longer-term goals that stretch beyond the relatively short-term horizon of the reparation programme.

The TRC's suggestions should provide a welcomed starting point for incorporating the business sector into the process of reconciliation and opening the debate about the role of the beneficiaries of apartheid in addressing the wrongs of the past. If SA is ever to move beyond its developing world status, it is essential that the benefits of macro-economic policies for the business sector be counterbalanced by social obligations. At the same time, these suggestions are a call to government to begin to publicly debate the financing of reparations.

In addition to the above suggestions, a few other policies could be considered as potential options. These include:

• the re-allocation of resources from the defence budget and
• donations from individuals, international aid organisations, and the business sector.

From a victim-perspective the defence budget will invariably be the area that will attract most attention. It is morally questionable to justify why there should be an increase in military spending and not in spending on victim support. Guatemala, for example, has a specific clause in its reparation policy saying that resources should be allocated to reparations from cuts in military expenditures. Pressure to cut the defence budget will invariably increase as the reparation debate prolongs. The current arms procurement deal in SA is projected to cost as much as R50bn over the next 12 years. Furthermore, the 65 000 jobs that were meant to be generated through the acquisition programme may well not materialise (Business Day, October 12, 2000).

The idea of establishing a donation-driven reparations fund has already received much public comment with some calls for Whites to donate 1% of their annual income to a reparations fund on Reconciliation Day, 16 December. It may well be a way that ordinary South Africans who want to contribute to redressing past ills can feel they are making a contribution. In fact, to generate R477, 4 million a year, a donation of R95 annually from 5 million South Africans is all that will be necessary. The difficulties of such an approach would be that the funding available would be hard to predict from year to year. This does not include the administration costs of administering the scheme proposed by the TRC or their broader reparations suggestions. Such costs and the additional funds necessary to implement broader reparations could be considered the purview of government and seen as a way that government could fulfil its obligations in terms of the TRC Act.

Conclusion

To date, most South Africans and the government have failed to even attempt to deal with the TRC's recommendations. They seem to have been written off as not fiscally viable, without any consideration whatsoever. The very least that victims of apartheid are owed is that the reparations issue is discussed publicly. Government must take a lead in this regard and it would be useful for government to establish a process of how businesses that wish to contribute to reparations could do so.

A point of departure for business, and those who feel they owe nothing to those victimised in the past, should be to address three issues in a direct fashion:

• the attitude that they are morally exempt from making a contribution to any reparations programme;
• the argument that the suggestions of the TRC make no moral or fiscal sense and can, therefore, be justifiably ignored, and
• the issue of what it is they are currently doing to redress the imbalances of the past and address specific needs of victims.

One concern is that the lack of public debate so far means that the reparation process may be reduced to pragmatics before any principles have even been set. Step one in the process should be to establish whether survivors of violence have a right to reparation in the first place. Thus, we reassert that reparation, despite the focus of this chapter, is primarily not a financial issue - it is about morals and principles.

A long-term and substantial reparations programme would need to include financial compensation, symbolic measures like building memorials, and the assurance that victims get adequate social and medical assistance, whilst the government as a whole addresses the imbalances of the past.

Surely government recognises that the current lack of debate about the granting of reparations to victims of political violence is nothing short of an embarrassment for SA, which is supposedly a champion of human rights. Not only were victims' rights to justice undermined by the amnesty provisions, but the lukewarm approach to reparations by all sectors in society, including the government, remains a constant reminder that human rights principles have barely taken root.

Chapter 8

© Centre for the Study of Violence and Reconciliation