Samancor and the dark side of foreign investment

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The Samancor Chrome case shows how ‘investor-friendly’ policy has allowed corporate plunder to the detriment of long-term development

Lost your password? Please enter your username or email address. You will receive a link to create a new password via email.Lost your password? Please enter your username or email address. You will receive a link to create a new password via email.During the 2024 medium term budget policy statement on 30 October, the government of national unity re-emphasised its commitment to “attracting more foreign investment”. is a desperate attempt to lure foreign capital into South Africa.

One of the core allegations against Samancor involves the establishment of a Malta-based subsidiary, Samchrome. The deputy minister of foreign affairs at the time, Aziz Pahad, proudly announced that “it was confirmed that the Chinese parastatal company Sinosteel was committed to investing $230 million in a ferrochrome mine and smelter project with South Africa’s Samancor”.

This illustrates how foreign investment often does not deliver the promised benefits and raises the question of how such a significant discrepancy could have gone unnoticed. In a supporting affidavit to the court, AIDC called this behaviour of profit shifting and subsequent wage reduction “wage evasion”.profit shifting was directly linked to the illusion that the firm could not afford the wage increases

Samancor has claimed that the outcomes of the report show that no action is necessary. However, they have declined to share the report with AMCU, claiming that they are not obliged to under section 165.

 

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