Civil society joins forces calling McKinsey to account

Press release and memorandum

Future South Africa and the variety of civil society organisations associated with it today holds a picket outside the offices of McKinsey in South Africa to protest the way in which the global company conducted itself in relation to its empowerment partner Trillian Capital and their business deals with Eskom.

McKinsey stands accused of criminal complicity in the capture of the South African state by powerful business interests colluding with prominent political leaders and public sector officials. These allegations – which relate principally to the relationship between McKinsey, Eskom and Trillian – are supported by compelling evidence.

Aside from the allegedly corrupt manner in which McKinsey secured its engagement with Eskom, the South African public, including the business community, is outraged at the unconscionable fee of R1.6-billion that McKinsey has levied for a six-month contract. Approximately R600-million of this fee was paid to Trillian despite the fact that they performed little, or no, billable work on the project. Indeed Trillian’s sole contribution has, it appears, been confined to using its political connections to secure the contract for McKinsey.

In the face of this evidence, long in the public domain, we are appalled at the inaction of our criminal justice authorities, in particular the Hawks and the National Prosecuting Authority. The evidence clearly points to contraventions of the Prevention and Combating of Corrupt Activities Act. We demand that they mount a formal investigation of the conduct of McKinsey, Trillian and Eskom.

We strongly support Corruption Watch’s planned submission to the US criminal justice authorities requesting that they conduct an investigation into apparent contraventions by McKinsey of the provisions of the Foreign Corrupt Practices Act.

MEMORANDUM

Believing that:

Corruption robs South Africa of its potential to combat poverty and encourage economic development,
It also erodes our democracy which further reduces our developmental capacity and agency,
Eskom is central to our lives as South Africans and has a great potential to contribute more to our economy but, because of McKinsey’s actions among others, this potential has been blunted, and this will result in it wanting to increase its tariffs and thus making electricity even more unfordable for the poor and unemployed;

We demand answers to the following questions:

What do your global corporate leaders know – in particular Dominic Barton, global managing partner and David Fine, global leader of McKinsey’s Public and Social Sector Practice – about the relationship between McKinsey and Eskom, and what is their view on the character of this relationship?
What are your leaders’ views, apart from the apparent corrupt nature of the relationship between Eskom and Trillian, of the unconscionable fee of R1.6-billion levied for a six-month advisory contract?
What will McKinsey do about this? Who will be held accountable for acts of corruption and this blatant gouging of South African public resources?

We call on McKinsey to:

Come clean , as their silence up until this point has been deafening,
Cooperate fully with the Parliamentary inquiry into Eskom,
Report any unlawful actions of their employees who worked on the Eskom contract to the relevant law enforcement authorities. Further, McKinsey must help the authorities to investigate the conduct of their employees on the Eskom contract.
Subject itself to an independent outside inquiry by the relevant statutory and legislative bodies.

A failure to respond positively to this memorandum will result in further civil disobedience action at McKinsey offices here and elsewhere.

Today’s action was supported by:

United World Karate Federation
Save SA
Section 27
Former public servants
Greater Mayfair Civic Association
Christian Lawyers/Advocates Africa
Freedom Movement
Batho Pele
MEQ Business Consultants
Public Service Association
Freedom Under Law
Veterans
OUTA
Centre for Strategic Management
NPO Popular Education
Viol
Democracy Works
JAI
Corruption Watch
BLSA
Treatment Action Campaign
FEDUSA
Right2Know
Ahmed Kathrada Foundation