Bloomberg News

South Africa Adopts Secrecy Law That May Stifle Graft Probes

November 23, 2011

(Updates with comment from chairman of editors forum in fourth paragraph, rand in seventh.)

Nov. 22 (Bloomberg) -- South Africa’s Parliament approved a law to protect state secrets that opposition parties, labor unions and media companies say will curb free speech and stifle efforts to expose corruption.

The ruling African National Congress used its majority in the National Assembly to pass the Protection of State Information Bill by 229 votes to 107, with all opposition parties rejecting the measure. The law proposes jail sentences of as long as 25 years for anyone obtaining classified information, even if its disclosure was in the public interest.

Members of the South African National Editors’ Forum and the Parliamentary Press Gallery Association attended the sitting dressed in black and staged a walk-out after the vote.

“We are broken inside,” Mondli Makhanya, editor-in-chief of Avusa Ltd. newspapers and the chairman of the editors’ forum, told reporters outside Parliament. “We never thought we’d come here dressed in black to actually witness democracy, this constitution of ours, being betrayed.”

The law may raise doubts among investors about the government’s public commitment to fight corruption. The state’s relationship with the media has deteriorated as newspapers reported on scandals involving senior officials including President Jacob Zuma. Charges of corruption, fraud, money laundering and tax evasion against him were dropped on April 6, 2009, the month before he was appointed president.

Free Information

“Business can only flourish in a society where the flow of information is free and unfettered by undue state control,” Gareth Ackerman, chairman of Pick n Pay Stores Ltd., South Africa’s second-largest grocer, said in an e-mailed statement. “The apparent haste with which our government appears to wish to push this bill through the House of Assembly will be damaging to foreign investment.”

The rand fell as much as 1.6 percent against the dollar today, and traded 1.2 percent lower at 8.452 at 4:07 p.m. local time.

“This law is not encouraging investor confidence,” Ion de Vleeschauwer, chief dealer at Bidvest Bank, which runs South Africa’s largest chain of moneychangers, said by phone from Johannesburg. “It is certainly not working in the rand’s favor today.”

More than 400 organizations and 16,000 individuals joined the Right2Know campaign that lobbied against the bill. Protests were staged outside Parliament in Cape Town and at the ANC’s headquarters in Johannesburg today.

Investigative Journalism

“It is insulting to all South Africans to be asked to stomach legislation that could be used to outlaw whistle-blowing and investigative journalism, that contains no public benefit defense clause and that makes the state answerable only to the state,” Nobel laureate and cleric Desmond Tutu said in an e- mailed statement.

Fourteen local newspapers published front-page editorials today urging lawmakers to vote against the bill.

“The spreading culture of self-enrichment, either corrupt or merely inappropriate, makes scrutiny by a free media which is fueled by whistle-blowers who have the public interest at heart more essential than ever since 1994,” the joint editorial said.

Secret Information

State Security Minister Siyabonga Cwele told Parliament on Nov. 16 the law was needed to combat espionage and information- peddling, and amendments that had been made to it addressed all legitimate concerns. He rejected calls for the release of secret information to be permissible in the public interest, saying harm would have already been done by the time a court could test the validity of such a defense.

“This bill is not about regulating the media,” Cwele said. “Neither is this bill about covering up corruption. We remain resolute and steadfast against corruption and fraud.”

A first draft of the law was introduced into Parliament in May 2008 and withdrawn five months later after a public outcry over the sweeping powers it gave the state to restrict access to official information. A tougher version was then unveiled in March last year that proposed giving the heads of all government agencies the power to classify documents in the “national interest.”

Opposition Parties

Following objections from opposition parties, labor unions and Johannesburg-based Naspers Ltd., South Africa’s largest media company, and Avusa, publisher of the country’s biggest Sunday newspaper, the ANC decided in June to limit the scope of the law to protect information that has the potential to undermine national security.

The bill will now be referred to the National Council of Provinces, which has the power to propose amendments before Zuma signs it into law.

Opposition parties plan to ask the Constitutional Court, the country’s highest judicial body, to determine whether the bill is lawful.

“Today is a dark day for our democracy,” said Lindiwe Mazibuko, parliamentary leader for the opposition Democratic Alliance. “It should never have come to this. We will not give up this fight.”

--With assistance from Robert Brand in Johannesburg. Editors: Karl Maier, Antony Sguazzin

To contact the reporter on this story: Mike Cohen in Cape Town at mcohen21@bloomberg.net

To contact the editor responsible for this story: Andrew J. Barden at barden@bloomberg.net


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