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South Africa: Hot Potato
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Business Day (Johannesburg)
EDITORIAL
14 May 2008
Posted to the web 14 May 2008
Johannesburg
HUMAN rights group Khulumani, which represents about 36000 South Africans seeking damages in the US courts from more than 50 major corporations that had dealings with the apartheid government, is understandably elated at this week's US Supreme Court ruling clearing the way for the $400bn lawsuits to proceed.
The decision does not, however, imply that "there is absolute merit in the claims", as stated by a lawyer representing the group. In fact, the judgment was made on entirely technical grounds -- the court requires at least six of its nine justices to form a quorum, and four had to recuse themselves because they own shares in one or more of the companies concerned. In the absence of a quorum, the Supreme Court's default position is to affirm the ruling of the lower court without taking a position on the merits of the dispute.
Still, the fact that the case will be heard by the New York District Court at all is a significant victory for Khulumani and the other organisations representing apartheid victims, who are hoping the multinational companies will be called to account for defying United Nations sanctions. But getting to court is one thing; proving their case in terms of the US Alien Tort Claims Act is quite another.
The companies concerned were not violating US law by maintaining a presence in SA, even if the UN had imposed sanctions. Unless the court can be shown specific examples of how their presence in SA contributed directly to violations of human rights, it will be difficult to justify reparations.
The US judiciary will be mindful, too, of the broader implications of setting a precedent that might encourage such international claims. US companies are active throughout the third world, including many of the world's trouble spots, and the risk of being sued at home could cause them to have second thoughts about investing in the developing world as a whole.
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The reparations issue is a political hot potato even the South African government would prefer to avoid having to juggle.
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