MORE than 30 of the world’s leading international banks and corporations will face a claim in a New York court today for $100 billion (£62 billion) in damages for their role in supporting apartheid.

The human rights case, brought by Ed Fagan, an American lawyer, is seeking vast punitive damages on behalf of tens of thousands of black people who faced systematic discrimination and human rights abuses under nearly half a century of white rule in South Africa.

The international banks and companies, among the biggest players of the international corporate sector, are accused of aiding and abetting the apartheid regime and of making vast profits out of South Africa’s former white-minority government.

They include the Barclays and NatWest banks, from Britain, Citigroup and JP Morgan Chase, from the United States, Commerz and Deutsche banks, from Germany, UBS and Credit Suisse, of Switzerland, Credit Lyonnais and Banque Indo-Suez, of France, the Anglo American and De Beers corporations, from South Africa, plus scores of other companies, such as Ford, IBM, Royal Dutch/Shell and Exxon Mobil.

The South African Government is against the legal action, which it fears will damage prospects for attracting much-needed foreign investment. Documents submitted to the New York Southern District Court allege that the banks helped to keep the repressive white regime afloat by rescheduling its debts after the imposition of United Nations trade sanctions against South Africa.

The documents are said also to provide evidence that international oil companies helped to prolong the life of the regime by breaking the international trade embargo, while companies such as IBM and Fujitsu profited from supplying computers and software needed to enforce pass laws and other racial segregation policies.

The apartheid reparations lawsuit, which is expected to last several years, is being pursued in the American courts under the 1789 Alien Torts Claims Act, an obscure 18th-century statute that allows any individual to file for damages over human rights abuses against companies that do business in the United States.

Mr Fagan, who rose to prominence in 1998 after winning a $1.25 billion lawsuit against Swiss banks accused of making it virtually impossible for Holocaust victims to recover money deposited for safe-keeping as the Nazis swept across Europe, has accused the banks and companies of being “central to the economy that sustained the South African state during apartheid”. He said: “The bottom line is an innocent population was being victimised as the countries of the world looked on.”

John Ngcebetsha, a South African lawyer who has been working on the case with Mr Fagan, is confident of winning an out-of-court settlement, as happened with the Swiss banks. But the strategy of trying to embarrass the banks and companies into paying up has led to criticism that the case will be decided “in the court of public opinion rather than a court of law”. The legal action is hugely popular in South Africa, where a recent survey showed that 75 per cent of the majority black population believe that whites benefited from the apartheid system.

It is also seen by many apartheid victims, angry at the delays in receiving compensation from the State for their suffering, as a last desperate attempt to win reparations.

Dorothy Molefi, one of the plaintiffs, whose teenage son Hector Pietersen was killed by the South African security forces in the 1976 Soweto uprising, said: “We want reparations from those international companies and banks that profited from the blood and misery of our fathers, mothers, brothers and sisters.”

Thandiwe Shezi, another plaintiff, said: “Fourteen per cent of South Africa, the white population, would not have maintained apartheid for so long if they were not aided and abetted by international business.”

However, President Mbeki said: “The South African Government is not, and will not be, a party to such litigation. We consider it completely unacceptable that matters that are central to the future of our country should be (judged) in foreign courts which bear no responsibility for the well-being of our country.”

The defendants have agreed to refrain from making any public statements about the case, although they have been waging a concerted behind-the-scenes campaign to fight the legal basis of the claim.

Modern economy built on abuse

SOUTH AFRICA’S modern economy was built on the denial of basic human rights to millions of black and mixed-race people, making them extremely vulnerable to exploitation by white-owned businesses, mining houses and commercial farms (Michael Dynes writes).

The standard of living for the average white person rose after the Second World War, but non-whites in sprawling townships were given second-rate education and denied access to the job market, which, as much as possible, was preserved for whites. The Truth and Reconciliation Commission (TRC), set up in an attempt to heal the country’s wounds, promised that apartheid victims would be compensated. About 22,000 people who suffered gross human rights violations have each been offered £2,500, but the TRC says that an overall £250 million, mostly from the foreign and domestic business community, would be more appropriate.

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