The South African Federation of Trade Unions (SAFTU) is angered and totally disgusted by the so-called Government of National Unity’s National Energy Crisis Committee (NECOM) and the B20 network – which we consider the local chapter of the global ‘Bourgeoisie 20’ – led by Business Unity South Africa (BUSA). NECOM and B20 appointed Bain and McKinsey to play a role – directly and indirectly – in the affairs of the South African state and business at the global scale, in the run-up to Johannesburg hosting the G20 meeting next November.
It is true that Johannesburg was measured as the world’s most unequal city and is the main host of a business elite that PwC has regularly measured as the world’s most corrupt in that firm’s biannual ‘Economic Crime and Fraud’ survey – but that is no excuse to show off our state and corporate degeneracy to the world in such an obvious way.
Bain was banned by Treasury from doing business with the government for ten years in September 2022 due to its involvement with the state capture, especially degrading the South African Revenue Services (SARS). The UK government also banned Bain from doing business with the state for three years as a result of this heinous wasting of our state’s taxation capacity, especially affecting what big business owes.
McKinsey escaped similar action by cutting a deal with the National Prosecuting Authority in which it agreed to pay R870 million in addition to the R1 billion they had paid earlier. Some reports suggest R2.2 billion was paid by McKinsey. But the consulting company contributed to wrecking both Eskom and Transnet, and therefore got off lightly. Far more in compensation is due South Africans from these three-piece-suited tsotsis.
And yet Bain was just appointed to provide advice to NECOM while McKinsey was appointed as a consultancy to coordinate BG20 activities. This is part of the overall G20 functions the South African state agreed to have responsibility for.The SA Presidency has decried the return of both Bain and McKinsey, stating on Sunday:“Whilst the Presidency or government has no control over the B20 processes, it does not endorse the appointment of McKinsey in this regard. Similarly, the Presidency does not condone the inclusion of Bain in supporting the activities of NECOM. The appointments do not contribute to the engendering of public trust and promotion of good governance, given the well documented role of the two firms in state capture and corruption. The Presidency calls on business to reconsider its position and to appoint more suitable partners for these important endeavours.”This is a pathetic statement, representing our state elites trying to absolve themselves for accountability and responsibility in this massive scandal. Government is not a helpless player which can issue a dry statement like this, when it has the power to discipline the world’s worst corporate corruption.
NECOM is, according to President Ramaphosa’s own ‘State of the Nation’ government website, “overseen at a technical level by the Director-General in the Presidency and includes more than 100 high-level officials from across government and Eskom, working closely with business and other social partners.” With Bain assisting NECOM, we better understand its bias, and why, for example, Eskom has consistently favoured the biggest capitalist firms, in redirecting scarce electricity from meeting basic needs and supporting labour-intensive industry and small businesses, and why Eskom is also backsliding on commitments to shift to renewable energy – and why such energy is privatised by Independent Power Producers instead of being socially-owned and labour-controlled. We are baffled that Bain is allowed by the government to provide project management of the Energy Council of South Africa (ECSA), because according to its website, “Business, Eskom and Government have committed to working in partnership to support the delivery of the agreed objectives. It is further backed by the CEO Pledge, representing over 140 of South Africa’s leading companies. NECOM workstreams are led by co-chairs nominated by Eskom and Government and supported by the NECOM secretariat. Business participation follows an agreed governance process coordinated by the Energy Council with support from Business for South Africa.”
This is a case of classic Public-Private Plundering, and it is exactly why so many African states – including Mozambique today, Nigeria in August and Kenya in June – have social rebellions underway. If NECOM and BUSA continue along these lines, we will become another case where anger boils over. It is from these and many other examples that the South African government has been found wanting when it comes to its commitments to reverse the devastating effects of corruption. Transparency International’s 2023 Corruption Perceptions Index (CPI) indicates that corruption in South Africa has worsened under the administration of President Cyril Ramaphosa, compared even to the previous leadership of Jacob Zuma!. South Africa’s score dropped to 41/100, its lowest ever, ranking it 83rd out of 180 countries.
This decline reflects widespread corruption, including state capture and ineffective systems to hold public officials accountable. Concerns have also been raised about impunity for powerful figures, lack of transparency, and undermined judicial independence. Given that the Government of National Unity has Democratic Alliance officials who tend to represent the interests of white monopoly capital and western multinational corporations, it is clear that South Africa is taking major steps backwards, and cannot expect to be released from Financial Action Task Force ‘grey listing’ next year.
Moreover, the G20 process is utterly compromised by the likes of BUSA and McKinsey. It is clear now why BUSA excluded the Black Business Council in the G20 during the November summit in Brazil. BUSA are obviously hypocrites when it comes to corporate governance, as if their leaders are, as implied in the PwC Economic Crime and Fraud surveys, completely addicted to corruption.We in SAFTU demand accountability! We demand an explanation from BUSA – a business association that has repeatedly condemned state capture activities and that made public pledge to deal with its members that are implicated. We call for a transparent explanation of the criteria used to appoint these firms for energy management and G20-related events. Why are companies with tainted reputations still being awarded contracts? And why are their officials who are obviously guilty of corruption, not wearing orange?
We demand that all contracts with McKinsey, Bain and any other corrupt consultancy be forthwith cancelled, and another company not involved with attempts to collapse our country and its young democracy be appointed.We urge those who give lip service to the King IV Report on Corporate Governance to use these incidents to call for genuine introspection by NECOM and B20 leaders, and that they join us in advocating far stricter blacklisting of companies implicated in corruption.We call on the government and its institutions to not to engage with firms that have demonstrated lack of accountability and a commitment to ethical practices.Below we remind South Africa of the sins the two companies committed against the people of South Africa. Bain & Company
1. Undermining the South African Revenue Service:
• Bain played a central role in the deliberate weakening of SARS. In collaboration with former SARS Commissioner Tom Moyane, Bain helped restructure the institution, crippling its efficiency and capacity to combat tax evasion.
• The Nugent Commission of Inquiry found that Bain’s restructuring plans were designed to benefit politically connected individuals and companies at the expense of national revenue collection.
2. Collusion with the Gupta Network:
• Evidence suggested that Bain’s engagements with Moyane and others were pre-planned and influenced by individuals aligned with the Gupta family.
• Meetings between Bain representatives and former President Jacob Zuma were flagged as suspicious, with reports that Bain secured its SARS contracts through improper channels.
3. Overbilling for Subpar Work:
• Bain received millions in fees from SARS for restructuring work that ultimately caused immense harm to the institution. The company was accused of delivering poor-quality work that was tailored to political agendas rather than operational needs.McKinsey & Company
1. Collusion with Eskom and Trillian Capital Partners:
• McKinsey partnered with Trillian, a Gupta-linked company, to secure lucrative contracts from Eskom without following proper procurement processes.
• McKinsey received R1.6 billion in fees for work that was later found to be unnecessary and grossly overpriced. Trillian was used as a vehicle to siphon funds to Gupta-linked entities.
• McKinsey eventually agreed to repay R1 billion to Eskom, admitting the contract was unlawful.
2. Involvement in Transnet Corruption:
• McKinsey advised Transnet on its locomotive procurement project, which became one of the largest scandals in South Africa. The project’s costs were inflated from R38 billion to over R50 billion, with funds siphoned off to Gupta-linked entities.
• McKinsey’s role in creating inflated financial models facilitated the corruption, and it worked alongside Regiments Capital, another Gupta-linked company.
3. Failure to Follow Due Diligence:
• Despite claiming to have rigorous ethical standards, McKinsey ignored clear red flags about Trillian’s Gupta connections and continued to work with the company, benefiting from the corrupt network.Key Consequences of their Actions
• The weakening of SARS directly contributed to a reduction in tax compliance and revenue collection, impairing the state’s ability to deliver services.
• At Eskom, inflated contracts and mismanagement exacerbated the utility’s financial crisis, contributing to the ongoing load-shedding crisis.
• At Transnet, the corruption linked to locomotive procurement drained resources and undermined critical infrastructure development.
These examples illustrate that Bain and McKinsey were not just passive participants but active enablers of state capture, prioritizing profits over ethical conduct and the public good. Their continued involvement with South African institutions raises serious concerns about accountability and governance. Too many investigations into this corruption pandemic have gone awry. Why was Glencore never investigated here, even if allegations remain about the 2007 bribing of the ruling party (successfully prosecuted in the U.S. in 2015), about the dramatic price increase paid by Eskom for Optimum Mine coal in 2015, and about local and foreign banks fixing and manipulating the rand:dollar exchange rate (again, successfully prosecuted in the U.S.). What is obviously needed is a commitment by the government and any business leaders who purport to be patriotic, to commit to serious prosecution and jail terms for the corporate tsotsis. A full Truth and Reconciliation Commission for such corporate crime is required, including compensation. There are countless leading politicians – especially from the ruling party – who have been corrupted in the process of the world’s worst economic crime and fraud, so a full audit of public debt and contracts that fall under suspicion is required. That in turn should allow an “Odious Debt” declaration to be made, and compensation paid so that our resources can be claimed back and the likes of McKinsey and Bian properly banished.
We believe that the following individuals who appear to be responsible, be considered accountable for these decisions:; B20’s Cas Coovadia, who was BUSA’s former leader and is the corporate ‘sherpa’ to the G20; and the Board of the Energy Council, consisting of Simon Baloyi; Sasol; Dr Nombasa Tsengwa, Exxaro Resources; Craig Miller, Anglo American Platinum; James Mackay, Energy Council; Dan Marokane, Eskom Holdings; John Smelcer,; Globeleq Africa Limited; David Jarvis, Industrial Development Corporation; Jason Quinn, Nedbank Group; Rekha Sinath, Remgro Limited. What kind of signals are these corporate elites sending to South Africa, if not a complete disregard for corporate ethics, and for their patriotic duty to our whole society?
