Last year we wrote about the embarrassing moral implications of South Africa's alleged involvement in the Iraqi Oil for Food scandal.
South African foreign policy claims the high moral ground in dispute resolution – but creeping shadows will be cast over our moral superiority if it is shown that the ANC government knew of the kickbacks in dealing with Iraqi oil which contravened resolutions of the UN Security Council to which South Africa is bound.
The Donen Commission of Enquiry started today but adjourned without hearing any evidence. This commission was appointed by President Mbeki to look into the allegations of South Africa’s alleged involvement in the Iraqi Oil For Food scandal. These allegations were detailed in a report of the UN Independent Inquiry Committee (IIC).
The Oil For Food program was established by the UN in 1995 and was intended to allow Iraq to sell oil to the world in exchange for money to be used for food, medicine and other humanitarian needs. Unfortunately money was often paid into Saddam’s coffers instead of the UN accounts which would have seen the money look after the needs of ordinary Iraqis.
On Friday last week the Mail & Guardian wondered whether the SA government knew about the kickbacks.
| The IIC reported last October that Iraq had abused the programme by bestowing lucrative allocations on politicians and other influential people in order to buy international support against sanctions; and that it had raised “surcharges” on oil trades and “kickbacks” on food and other humanitarian transactions. These payments to Iraq were in breach of the sanctions. The Mail & Guardian has documented how Oilgate company Imvume Management acted effectively as a front for the African National Congress in its Iraq oil dealings. The ANC was to have shared in the profits, while Iraq was assured of the ANC and South Africa’s support against sanctions. Donen is unlikely to stray much into the influence-buying allegations, which he calls a “moral issue”. His terms of reference limit him to examining whether South Africans physically breached sanctions by paying the surcharges and kickbacks to Iraq; whether that constitutes an offence in South Africa; and how to prevent recurrences. |
The key issue to be investigated is a payment allegedly made by South African oil company Imvume to Iraq where US$60 000 of a promised $464 000 was paid to obtain a contract to buy two million barrels of oil for South Africa's Strategic Fuel Fund.
The IIC report found that Majali and two of his companies (Montega and Imvume) “profited from Iraq’s efforts to deliver business opportunities to SA in return for political support.”
Imvume initially said that they were unaware that the kickbacks were illegal. Now they outright deny that any payment was ever made. Sounds murky to me.
The M&G claim that evidence suggests some knowledge of the payment at high levels. In September 2001 a government delegation travelled with Majali to Iraq where oil allocations were requested.
Deputy President Phumzile Mlambo Mgcuka (then minerals and energy minister) signed a departmental motivation for the trip which said “a surcharge imposed by the Iraq’s [sic] on their oil allocation makes it difficult for South African companies, especially Black Economic Empowerment Groups, to break into the market.”
It seems plausible that the government’s Strategic Fuel Fund may have wanted to source Iraqi oil via a private company rather than do a direct government-to-government deal. By going this route the surcharges would by paid by the private companies; thus keeping the state's paws nice and clean .
If this is true then the individuals and private companies who made the surcharge payments could be off the hook. However this would drop the blame square on the shoulders of the SA government. Those creeping shadows would then hover not only over our pretence of superior international morality; but also over our basic commitment to international law.
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