South Africa: actions against the abusive debts imposed on the popular classes

13 November 2019 by Eric Toussaint

Victims of the 2012 Marikana mine massacre.

The 2012 Marikana mine massacre

In 2012 thirty-four protesting miners employed at the Marikana platinum mine were massacred by police repression. They were in a hard fought struggle for wage increases. They had nothing left to lose because at the demand of creditors the mining company was directly stopping large sums from their wages.

The stoppages were excessive and had no genuine legal basis. Low pay had pushed the miners into debt with loan-sharks who made immense profits and with the complicity of their employer company seized the miners pay directly at the source. When inspecting the dead miner’s pay slips the commission inquiring into the circumstances of the massacre saw that 28 of them were having pay withheld. During the month that preceded the massacre many of the miners had had pay stoppages, some of which amounted to more than half their pay. One of them had no pay at all; his pay slip showed a negative balance Balance End of year statement of a company’s assets (what the company possesses) and liabilities (what it owes). In other words, the assets provide information about how the funds collected by the company have been used; and the liabilities, about the origins of those funds. . [1]

Photo of the pay slip of one of the miners killed in the massacre. The total of the stoppages leave a net pay of 2399 rands (about €145)
Source : Bench Marks Foundation and the photographer Chris Molebatsi

Although the situation of the miners in Marikana is an extreme case it is not at all unique. Stoppages on pay in favour of loan-shark creditors, by complicit employers, is a common occurrence in South Africa. In the case of Marikana it was the mining company itself that controlled the society that made the loans to the miners and so could put its fingers directly into the miners pay packets. As the old saying goes “ each is his own best servant”, here is a sinister example.

A movement demanding justice for the Marikana miners has arisen, see in particular Dick Forslund, [The Bermuda Connection : Profit shifting, inequality and unaffordability at Lonmin 1999-2012], AIDC,

Loan sharks reclaim direct access to social benefits

In South Africa many workers are subject to important pay stoppages through employers’ complicity with loan-sharks.

In good neoliberal tradition the South African government outsourced the management of social security payments from the South African Social Security Agency –(SASSA-) to a private management company – Cash Payment Services (CPS). Seventeen million people have rights to various kinds of benefits. CPS has used its position to collect claimants’ personal information in order to draw them into the net of micro-credit debt. The double advantage for CPS is its subsequent practice of directly deducting the resulting micro-credit repayments from victim claimants benefits.

The NGO Black Sash has brought an action in justice against this practice as being conflict of interest Interest An amount paid in remuneration of an investment or received by a lender. Interest is calculated on the amount of the capital invested or borrowed, the duration of the operation and the rate that has been set. , abuse of position and profiteering (the author’s affirmations). The court fixed a limit to the stoppages but did not condemn the practices. CPS’s contract was nevertheless renewed for a year in order to avoid excessive hardship on ongoing claimants. Black Sash continues its combat against these illegitimate practices.

For more information

Legal action against Lifestyle Direct Group International

The victims of a fraud that caused them to enter into illegitimate and illegal debt have grouped together to bring a class action against Lifestyle Direct Group International and its dependant internet offshoots. The plaintiffs are supported by the Stellenbosch University Law Clinic who are trying to help thousands of such victims of doubtful credit practices.

The plaintiffs are asking the courts to declare the practices of Lifestyle Direct Group International illegal

The plaintiffs say that they were pushed into signing loan contracts under false pretences. Briefly, the reimbursements became so exorbitant as to be impossible to repay. Consequently, the company used a clause in the contract to apply direct debits to borrowers bank accounts.

The plaintiffs are asking the courts to declare the practices of Lifestyle Direct Group International illegal and that its 19 websites be closed down.

The plaintiffs lawyers are arguing on the basis of articles 40, 41 et 48 of the Consumer Protection Act - CPA (2008).

The case is to be heard by the Cape Town High Court on 27 November 2019. The decision could make jurisprudence and reinforce complaints against the numerous companies that systematically abuse customer’s good will in order to convince them to accept a loan contract and then despoil them.

For more information

Translated by Mike Krolikowski


[1See Dick Forslund, “The Bermuda Connection : Profit shifting, inequality and unaffordability at Lonmin 1999-2012”, AIDC, Particularly interesting is annex B : The 2012 R2000 Back-to-work allowance and mine worker indebtedness, pp. 63 et 64

Eric Toussaint

is a historian and political scientist who completed his Ph.D. at the universities of Paris VIII and Liège, is the spokesperson of the CADTM International, and sits on the Scientific Council of ATTAC France.
He is the author of Greece 2015: there was an alternative. London: Resistance Books / IIRE / CADTM, 2020 , Debt System (Haymarket books, Chicago, 2019), Bankocracy (2015); The Life and Crimes of an Exemplary Man (2014); Glance in the Rear View Mirror. Neoliberal Ideology From its Origins to the Present, Haymarket books, Chicago, 2012, etc.
See his bibliography:
He co-authored World debt figures 2015 with Pierre Gottiniaux, Daniel Munevar and Antonio Sanabria (2015); and with Damien Millet Debt, the IMF, and the World Bank: Sixty Questions, Sixty Answers, Monthly Review Books, New York, 2010. He was the scientific coordinator of the Greek Truth Commission on Public Debt from April 2015 to November 2015.

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