What is debt?

This is the second in a series on debt and how it can effect you. The previous post dealt with SA’s junk status and can be read here.

In its broadest sense, the idea of a “debt” refers to an obligation to do something, whether by payment or by the delivery of goods and services, or not to do something.  For the purposes of this series, we will focus only on the obligation to repay money.

South Africans are no strangers to borrowing money.  In 2014, the World Bank Findex reported that a higher percentage of people in South African borrowed money than in any other country in the world.[i]  “Borrowing” could mean borrowing from financial institutions, from friends and family, from stores (buying on credit) and from private informal lenders.  These are all types of debt.

Whatever the case may be, if you have debt, or are thinking of borrowing money, there are some important things you need to consider:

  1. Whether the debt will be secured or unsecured;
  2. What your interest rate will be; and
  3. How many repayments you will be required to make.

In this post we will discuss some of the common types of debt and what makes them different from one another.

Common types of debt

Secured versus unsecured debt

Secured debt is when the person you borrow money from has some sort of claim to your assets if you don’t pay them back.[ii]  Home loans are a good example of secured debt.  On the other hand, unsecured debt is debt without any collateral or security.  A personal loan from a bank is unsecured.  Because secured debt is less risky, lenders will usually offer better interest rates for secured debt compared to unsecured debt.

Home loans

For many people, buying a home or land is the largest financial investment they will make over the course of their lives.  A home loan is a loan given by a financial institution for the purchase of a house. They will give you enough money to buy the house today, if you agree to pay off the loan with interest in small amounts over a number of years.  As it is such a large amount of money, the financial institution will usually require that the loan be secured by a mortgage bond over the property.  This means that your house is the collateral for the loan, and can be seized by the bank if you fail to pay your debt.

What is a mortgage bond?

A mortgage bond is a legal instrument which is registered against the title deed of immovable property.  It gives the bond holder something called a “real right” over your property.  This prevents the owner of the property from selling the property without the permission of the bond holder, and allows the bond holder to sell the property if the owner fails to pay their home loan repayments, as agreed.

A bond comes into being when you sign bond documents with the bank or the bank’s attorneys.  On a practical level, it is a note on the Deeds Office records that someone else has a real right over your property.

Car finance

You can finance your car through a financial institution in one of two ways: an instalment sale agreement, or a lease sale agreement.  In both cases, the bank will own the car until you pay off the loan. Once you have made all the payments on an instalment sale agreement, you become the owner of the car.  In the case of a lease sale agreement, you get the option to buy the car once the agreement has run its course.

You should always be wary of the fact that cars lose value over time.  So, if you buy a car and need to sell it in a year’s time because you can no longer afford the repayments, it is possible that you won’t make enough money from the sale to repay everything you owe.

Personal Loans

A personal loan isn’t secured against anything you own. Unsecured loans are riskier than secured loans because it is less certain that the lender will get their money back if you fail to pay the loan repayments. To cover the risk, the lender will usually require a higher interest rate.  Where you might get a home loan at 2% “above prime”, you could get a personal loan at anything from 5% to 20% above prime. In real monetary terms, that means you are paying a lot more for the debt.

Although it is a riskier form of debt, this does not mean that the lender can’t get their money back.  A lender will still be able to enforce the agreement through the courts and the mechanisms in the National Credit Act 34 of 2005.

Payments by monthly instalments

Think of all of those adverts you see which tell you that you have the choice of paying for a product today, or paying a number of smaller payments over a number of months (TVs, furniture and cell phone contracts). If you choose to pay off the item over a number of months, you will have a contractual obligation to make those payments and, if you default, the store that you bought the item from will be able to take legal action against you for breaching that contractual obligation.  This could involve reclaiming the item, cancelling the contract, and/or claiming damages against you.  You will usually end up spending much more for the product than you would have if you had saved up and bought it cash.

Private informal lenders

Borrowing from informal lenders is common in South Africa.[iii]  Private informal lenders are unregulated and, as such, may charge much higher interest than formal lenders. If you are borrowing informally, make sure that you know what interest will be expected from you.  Be careful of lenders that don’t agree to repayment terms and interest up front, as you could end up repaying many times what you borrowed.

Debt traps

A debt trap is the term used to describe a situation where a person has debt that is extremely difficult or impossible to repay.  One of the ways in which you can fall into a debt trap is when you start borrowing from other institutions, or from informal lenders, to repay the debt you currently have.  It becomes a downward spiral when the new debt is on worse terms (higher interest) than the old debt. The further into debt you get, the closer you get to being blacklisted, declared insolvent and having your assets sold to repay your creditors.

Good debt management

Debt can be a very useful tool for buying assets or financing your dreams, but it can also be a quick way to lose a lot of the things you have worked so hard for.  Being aware of how debt works and how to manage it is crucial if you are going to rely on debt to help you to reach your goals.

When you take out debt, remember that interest is the cost of that debt.  The higher your interest rate, the more you are spending to get debt. The lower your interest, the cheaper your debt – always aim to get the lowest interest rate you can. One of the ways that a financial institution will determine what your interest rate will be, is to consider your credit rating.  When you default on your payments (make late payments or no payment at all), your credit rating goes down. This will make your future debt more expensive and possibly lead to your eventual blacklisting. When you pay your debts according to the terms of your agreement, your credit rating improves. The better your credit rating, the more likely you will be offered better interest rates in future – always try to stick to the terms of your contracts.

In our next part of this series, we will deal with the issue of interest rates and inflation and how this affects debt.

By: Alexander Ashton

Alexandra Ashton is an attorney heading up the LRC Johannesburg debt and housing department. She holds a BCom and an LLB with distinction from Wits University. 

Alex, with thanks to the continued financial support of Legal Aid South Africa, is currently working on assisting people who lost their homes as a result of the fraudulent Brusson Finance lending scheme to be restored ownership of their properties.

Disclaimer: The opinions expressed by the Realising Rights bloggers and those providing comments are theirs alone, and do not reflect the opinions of the Legal Resources Centre. The Legal Resources Centre is not responsible for the accuracy of any of the information supplied by the bloggers.

[i] According to the World Bank, Global Findex Data Bank, (available at: Databank.worldbank.org/data/reports.aspx?source=1228) 85.6% of South Africans had borrowed money in the year leading up to the report compared to the global average of 42%.  See also Demirguc-Kunt et al, “The Global Findex Database 2014: Measuring Financial Inclusion around the World” at page 7 available at: http://www.worldbank.org/en/programs/globalfindex.

[ii] A secured loan is defined in the National Credit Act No.34 of 2005 as “an agreement, irrespective of its form . . . in terms of which a person advances money or grants credit to another, and retains, or receives a pledge to any movable property or other thing of value as security for all amounts due under that agreement”.

[iii] The 2014 World Bank Findex Data Bank recorded that 10.9% of South Africans have borrowed from informal lenders.

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How the ratings downgrade affects your debt: a legal perspective

[Featured image sourced from BusinessTech]

As of today, 07 April 2017, both Standard and Poor’s (S&P) and Fitch, two of the three international ratings agencies alongside Moody’s, have downgraded South Africa’s credit rating to sub-investment grade, or “junk status”. There has been a lot of discussion about how this could affect the exchange rate, international investment, taxes and government spending. But how does it affect the average person and what, from a legal standpoint, should you be aware of?

Before we start, it is important to note that there is no need to panic. Economic changes don’t usually happen too drastically, or overnight. Nonetheless, there are things that you should do to prepare yourself so that you are not caught financially off-guard by changes as they happen.

So what can the average person expect? The average person could be affected in five ways: taxes may increase, interest rates may increase, inflation may increase, job security may decrease and returns on your pension, provident and retirement funds will probably decrease. What this boils down to is more pressure on your pocket. That pressure will make it harder to save, invest, and – more critically – make it harder to repay debt and cover your day-to-day expenses. In this post we are going to focus on what happens when you can’t pay back your debt.

First of all, what is debt? Debt is when you have effectively borrowed someone else’s money that you need to pay back. Debt can take a number of forms. Home loans, vehicle finance, credit card debt, personal loans, store cards, cell phone contracts, and instalment sales are all forms of debt. With the pressure of interest rate increases and rising costs of expenses, it becomes harder to make your monthly repayments. If you don’t or can’t pay your monthly instalments, your credit provider can take a number of legal steps against you depending on you contract with them and the nature of the debt.

Ultimately, the law recognises a creditor’s right to be paid for what they have lent you. So if you stop paying, you don’t simply get to walk away without repercussions The law provides a number of ways for creditors to get their money back. Ultimately, each way puts your belongings and, sometimes, your livelihood and home at risk. Common legal routes to recoup unpaid debt are as follows:

  • Bonds over your immovable property (mortgage bonds) allow credit providers to sell off that immovable property to repay themselves. You might have a home loan secured by a mortgage bond over your house for instance.  If you default, the bond would allow the bank to sell your home.
  • Writs of execution allow creditors to sell your movable property (for example your car or furniture), and or your immovable property to pay themselves back.
  • Garnishee orders / emolument attachment orders allow a creditor to deduct money straight off your salary.
  • Orders of insolvency allow creditors to sell off your assets to repay themselves.

Over and above all of this, defaulting means that you run the risk of being black listed. If you are black listed you won’t be able to get credit in future. If you avoid black listing, you may run the risk of having your own personal credit rating downgraded. Just like the S&P downgrade, this will make credit institutions less inclined to lend you money, and if they are willing to lend you money, it will more than likely be at interest higher rates.

So basically, you need to avoid defaulting on your debt.

What you as a consumer and a debt holder can do to avoid default is to first and foremost “know your debt”. In other words, know exactly how much you have borrowed, and exactly how much you have to pay back on a monthly basis.

Secondly, “know your interest rates”. You need to know which of your interest rates are flexible and take steps to understand what an increase in the repo rate will mean for each of your repayments. Most debt is granted on a flexible interest rate. What this means is that if the reserve bank chooses to increase the repo or “prime” lending rate (which is likely to happen following a downgrade) your interest rate will also be increased.

Thirdly, “have a plan to reduce your debt”. Have a plan of how you are going to repay your debt. The best place to start to reduce debt is try to reduce your expenses and to use any extra money you have – after paying off your monthly repayments – to pay off your debt starting with the debt with highest interest rate.

Fourth, “try to avoid more debt”. Particularly avoid debt on medium-sized purchases and purchases you don’t need. That new TV may only cost you “R199 per month!!!” But that is adding to your debt burden, your risk of default, and usually, you will end up paying more for that TV over the long run than you will if you save up and buy it in a lump sum. Yes, this means you may not have as many nice things. But if interest rates increase you will be grateful that you are not drowning in debt.

Fifth, “downsize if necessary”. Do you really need that expensive car, that expensive house, or that fancy cellphone? Think about going simpler, smaller and cheaper. When it comes to debt, every little bit counts.

I hope this basic overview has been helpful. Over the weeks to come, we are going to run a number of articles on our “Realising Rights blog” to unpack the concepts set out in this article with the aim of helping you take control of your debt.

By Alexandra Ashton

Alexandra Ashton is an attorney heading up the LRC Johannesburg’s debt and housing department. She holds a BCom and an LLB with distinction from Wits.

Alex, with thanks to the continued financial support of Legal Aid South Africa, is currently working on assisting people who lost their homes as a result of the fraudulent Brusson Finance lending scheme to be restored with ownership of their properties.

Disclaimer: The opinions expressed by the Realising Rights bloggers and those providing comments are theirs alone, and do not reflect the opinions of the Legal Resources Centre. The Legal Resources Centre is not responsible for the accuracy of any of the information supplied by the bloggers.

Should fracking happen in South Africa?

Photo: No Fracking Signs at Prince Albert – by Danie van der Merwe (Flikr)

The threat of fracking has been imminent in South Africa for almost a decade. But South Africa is just not ready for fracking. There are many detrimental effects of this mining activity on communities and the environment.  The regulatory requirements to mediate these effects are also not present. Allowing fracking to take place in South Africa would simply be disastrous.

Fracking, or hydraulic fracturing, is a technique used to extract gas from deep underground, which involves digging wells up to four kilometres deep. A mixture of water, sand and chemicals is injected at high pressure to crack shale rock formations and release the gas, which is then brought to the surface.

History of Fracking in South Africa

Fracking is not a new practice and dates back to the 1860s in the United States but started being used commercially in 2009. Currently, almost 95 percent of US states use fracking techniques. In South Africa, formal interest in fracking began in 2008; the potential areas of interest being in the Karoo and parts of KwaZulu-Natal (KZN). Since then, there have been a number of applications for exploration rights from companies such as Bundu Oil and Gas, Shell SA and Falcon Gas and Oil.

The threat of litigation around the imperfections of this process, and around the absolute lack of investigation into the technology and its impacts, resulted in the Minister of Mineral Resources, Susan Shabangu, declaring a moratorium on the issue of exploration licences in April 2011. The Department of Minerals and Resources (DMR) was instructed to set up a task team to explore the implications of fracking, the feasibility of the gas extraction, as well as its impact on the environment.

At that time, no timeline was given for when research would be conducted. The Minister commissioned a report from a group of different government agencies to inform her about whether fracking should go ahead or not. The problem with the task team responsible for the report was that it excluded representatives from key government departments. Only certain voices were heard in the report. This omission does not reflect administrative justice, a right to which we are entitled under the Constitution.

In September 2012, a little over a year later, the moratorium was lifted. Cabinet endorsed recommendations of the report on the lifting of the moratorium and mandated the Minister of the DMR to hold a series of public consultations with interested and affected stakeholders to provide further details.

Possible pollution events associated with fracking

Fracking typically requires 1000-2000 large truckloads of water, which means thousands of wells will require truckloads of water to be transported to the fracking site at significant environmental cost. Most of South Africa’s surface fresh water (98%) has already been allocated to existing users. This raises the question of how the fracking industry will source the millions of litres of water it will need to undertake its operations.

Fracking entails the pumping of toxic chemicals at high pressure, with water and sand, into underground shale rock formations. Some of the fracking liquid returns to the surface after use, and has to be disposed of without causing harm to the environment. The fracking liquid often consists of both toxic and radioactive sludge, which must be transported to hazardous waste management sites.

The most serious environmental concern related to fracking is that of ground water contamination. The potential risk to ground water comes from two sources: the injected water (water and chemicals) and the released natural gas. The water used in drilling shale gas is fused with sand and chemicals (corrosive inhibitors, surfactants, iron control chemicals, biocides, friction reducers and scale inhibitors). When these are injected down the well, there is a strong possibility of polluting underground water. Freshwater reserves can also be contaminated when the fluid is spilt at the site of the wells or in other accidental spills.

Fracking can release gas and / or vapour into the atmosphere. These emissions are either of original additive chemicals, entrained contaminants from the shale formation or the methane released by the fracking process. There is an ongoing debate about the relative leakage of methane into the atmosphere from the exploitation of shale gas in comparison to the emission rate from conventional gas. This is potentially important because a high leakage rate might mean that methane released into the atmosphere from shale gas extraction could have a higher net greenhouse gas footprint, than, for example, coal. Fracking operations should, therefore, seek to minimize all emissions into the atmosphere and monitoring processes need to be actively enforced.

Lastly, shale gas development involves continuous activity conducted over a sustained period of time (this can vary considerably, but is often several years) over the entire course of a day, seven days a week. The noise of compressors, generators and drilling, extensive truck movements, intrusive un-natural lighting overnight and the release of bad smelling chemicals can have significant negative health and well-being impacts on nearby communities, especially in the context of quiet rural and semi-rural areas that also relatively densely populated.

Do we have the regulatory requirements to undertake fracking?

What are the regulatory conditions that currently exist that would affect fracking? The Mineral and Petroleum Resources Development Act (MPRDA) is the central statute that governs applications for and the granting of rights and permits to conduct shale gas extraction. The requirement for the submission and approval of an Environmental Management Plan (EMP) for an exploration and production right allows for the potential environmental impacts of shale gas extraction to be investigated prior to such activities being conducted.

If waste will be generated by any activity, an assessment as to whether the National Environmental Management Water Act (NEMWA) applies to the activity will need to be made and, if required, any requisite waste management licenses applied for and obtained prior to starting any activity requiring the management of the waste.

Should any company succeed with exploration, a water use license in terms of the National Water Act is to be secured through applications for individual or integrated water use licenses. Various factors will have to be considered for the granting of the licence – one of which is the availability of resources.

How effective are these measures to mitigate the impacts of fracking?

Should the South African government decide to issue exploration and production rights for shale gas fracking, the least we can expect is an appropriate regulatory regime that is implemented, monitored and enforced. The current fracking regulations and the current pollution control laws do not achieve this.

We do not have the capacity or will at local – and national government level to do the basics of waste management, such as collecting solid waste, preventing dumping, closing down illegal mining operations and controlling sewage and industrial pollution. We simply will not be able to handle the extra burden of fracking waste once fracking activities begin.

Fracking can be extremely water-intensive, depending on the precise techniques used. This may pose risks in the KZN Midlands, and other parts of the country which are currently experiencing drought conditions.

In theory, it seems that South Africa’s pollution control laws do allow for mining; however, due to the nature of fracking, the current pollution control laws may not be sufficient to deal with the detrimental and long-term effects of fracking.

The environmental impacts of conventional mining in South Africa have never been regulated effectively. To the extent that appropriate regulations do exist, their implementation has been ineffective. As a result, mining has had, and continues to have, significant negative impacts on the environment. Many of these impacts, such as acid mine drainage, cannot be easily remedied and will continue to impose heavy financial, health and environmental costs on society for the foreseeable future.

I would argue then, that with the current regulatory environment, as well as the potential harm caused by fracking, the government will need to rethink its regulatory regime before allowing fracking to happen.

by: Shaun Bergover, candidate attorney

Disclaimer: The opinions expressed by the Realising Rights bloggers and those providing comments are theirs alone, and do not reflect the opinions of the Legal Resources Centre. The Legal Resources Centre is not responsible for the accuracy of any of the information supplied by the bloggers.

The Road to Freedom – George Bizos

Freedom Month Lecture Series, University of the Witwatersrand

Speech by: Advocate George Bizos SC

(Counsel, Legal Resources Centre)

assisted by Byron Jaffe, Monika Juengst-Miechzkowska and Avani Singh (Legal Resources Centre)

presented at the University of the Witwaterstrand, hosted by the Department of Arts and Culture

21 April 2016

Introduction

The progress towards democracy in South Africa can only be described as one of triumph.  We have broken from the shackles of the apartheid era, and have the Constitution of the Republic of South Africa, 1996 as the high water mark of our constitutional dispensation.  At the outset, I must state that I refuse to accept the proposition of those who say that nothing has changed.  A simple example of this can be seen at my office everyday, where all of us, of varied races and backgrounds, eat lunch together in the kitchen; this is a far cry from my early days at the Bar, where I had to fight to be allowed simply to share chambers with Advocate Duma Nokwe because of the difference in the colour of our skin.  Indeed, this evening, at the kind invitation of the Department of Arts and Culture for which I am grateful, I have the opportunity to share with all of you from so many walks of life my reflections about our road to freedom, something that would have been impossible a few decades ago.

In refuting the view that nothing has changed, I must also hasten to add that we of course have a long way still to go in achieving our constitutional ideals.  We have perhaps never before in our post-1994 democracy been confronted as starkly with the realities of inequality as we were with the recent student protests.  South Africa remains one of the most unequal societies in the world, and the struggle to remedy that continues.

The meaning of freedom for me still finds its point of departure in the opening paragraphs of the Freedom Charter of 1955.  It stated powerfully that:

We, the People of South Africa, declare for all our country and the world to know:

that South Africa belongs to all who live in it, black and white, and that no government can justly claim authority unless it is based on the will of all the people;

that our people have been robbed of their birthright to land, liberty and peace by a form of government founded on injustice and inequality;

that our country will never be prosperous or free until all our people live in brotherhood, enjoying equal rights and opportunities;

that only a democratic state, based on the will of all the people, can secure to all their birthright without distinction of colour, race, sex or belief;

And therefore, we, the people of South Africa, black and white together equals, countrymen and brothers adopt this Freedom Charter;

And we pledge ourselves to strive together, sparing neither strength nor courage, until the democratic changes here set out have been won.

Have the changes set out in the Freedom Charter yet been won?  Certainly, we have the frameworks in place to make this possible, but the difficult questions arise when we look at the lived experiences of the majority of our people.  And, if this change has not yet been fully realised, are we again prepared to re-commit to sparing neither strength nor courage until it has been won?

We were beautifully naïve when we began on this road to freedom, cautiously optimistic but almost too afraid to truly imagine the potential that a democratic South Africa could hold.  The end goals of our efforts were wide spread, spanning the nation of South Africa and its diverse people.  My reflections tonight come from the experience of one who lived through the early days of freedom, but who continues through my work to at the Legal Resources Centre to grapple with the ongoing struggles.  I think of the birth and growth of freedom in South Africa as being not unlike the way one might reminisce about a beloved child: they did not always run, but they crawled, fell, and even cried; however, because they were their kin by blood, ultimately rose up tall.

A history of scars and tragedies

Ask any South African about historical heroes, and you would receive a plethora of names who served as our guiding lights into the democratic era; in their wisdom, they saw the start of the fall of colonialism as a turning point in the realisation of the ideals of freedom and equality for all.  For many, these were ideals pursued not knowing whether the realisation would materialise in their lifetimes, but with a certainty that they were worth pursuing nonetheless.

We saw a world where the territorial gains by colonialists were being dissolved; where the right to self-determination, free of want and fear, was being realised; trade barriers were being lowered; and aggressor nations were being disarmed.  In this way, one began to see a version of South Africa that had not truly been imagined before.

But the fall of apartheid was a complicated beast.  There was no overt aggressor state, but rather than aggressive controller.  In the face of this consistent oppression, the anti-apartheid movements – diverse as they may have been, from political parties such as the ANC to workers movements, women’s movements and youth movements – found common cause in the concerted ideal of freedom for all in South Africa.

The cost and the losses that came in realising this freedom cannot be gainsaid.  From the Treason Trial, the student uprisings, the death of activists like Steve Biko and Ahmed Timol in police detention, the hazardous activities undertaken by the military wings – suffice it to say that the suffering was immense.  It is difficult to comprehend the extent and depth of the personal suffering that was experienced.  When I think, for example, of the death of Steve Biko in custody and the fear that more members would suffer the same fate, I remain awe-struck by the continued and concerted efforts of so many people across the country who overcame their fears to pursue the cause.  I must add, though, that in recalling the student uprisings, and reading the recent comparisons with the student movements that we have seen over the last year, I can only pray that we never again see innocent blood being spilled of those pursuing their right to receive a decent education.

Many people continue to carry with them the pain and scars of those days.  When freedom ultimately came, it was not a victory for a particular movement; it was for the people as a whole.  By 1985, we could almost taste freedom, but there was still a long and difficult part ahead before it could be achieved.  The tide may have turned slowly, but it ultimately did turn.

Amidst the pain of those dark days, though, were moments of unparalleled joy.  The release of former President Nelson Mandela, for instance, comes to mind.  The memory of him standing before the world, a free man smiling with his arms raised high – nothing can compare to that moment.  On the one hand, I relived some of the darkest times of South Africa’s history in that moment then and there; but on the other, I realised too that many of the struggles, the violence and the heartache were behind us, and what lay ahead was for us to get down to the business of running a free and democratic country.  The challenge was daunting, but thrilling.

A Constitution for all

The Constitution and I have had a long friendship. As some of you may know, I participated in the negotiation and drafting of the Constitution, and was a member of the team of lawyers who argued for its certification before the Constitutional Court. For many years, I have been involved in constitutional litigation, and today still work in the Constitutional Litigation Unit of the Legal Resources Centre. As with all good friendships, I have defended it; I have challenged it; and I have tested its limits and bounds. However, to this day, I continue to stand by it and believe in the potential that it holds.

The Constitution was approved in May 1996 by the National Assembly by an overwhelming majority: 421 of the 435 members voted in favour of it; only 2 opposed; and the other 12 abstained. This, however, was only the first hurdle. It still needed to be certified by the Constitutional Court as being in line with the 34 constitutional principles contained in the Interim Constitution.[1] This was a novel approach, and we were uncertain of what to expect.

The five of us representing the Constitutional Assembly – a team which included Advocate Trengrove SC and Advocate Moerane SC – drafted more than 250 pages of argument and schedules that we hoped would show conclusively that the proposed constitution complied with these principles. The debate in the courtroom was heated and robust, and I remember reading the placards of a leading Johannesburg newspaper after the hearing which said “Bizos clashes with judges”. I found the characterisation jarring, preferring to think of it as a necessary consequence of the job. But regardless, this so-called clash was a critical process to test the strength and resilience of what was to become our Constitution.

When it came to certification, the Constitutional Court was by no means unaware of the gravity of the task before it. As the Court stated in its judgment, “we were mindful, during both the previous deliberations and again now, that the finality of certification demanded and demands we make assurance doubly sure”.[2] At the hearing, Justice Goldstone commented that a future Constitutional Court “sitting in ten or three hundred years’ time, would have to refer to the constitutional principles. They do not disappear. They would be a primary source of interpretation” – to which I responded, “[e]ven in a deep freeze, they would be there forever”.

We weren’t successful in our first attempt at certification, but the Court was satisfied following the second hearing that the 34 constitutional principles had been met, and certified the amended text which was signed by President Mandela a few days later on 4 December 1996.[3]

While it is my hope that the principles and values underpinning the Constitution are never allowed to wane, the Constitution itself is not necessarily cast in stone. It should, and must, be given the space to evolve naturally in line with society’s evolution. This is clear from the Constitution itself, which allows for its own amendment, a matter which I will return to again shortly. In my biography, Odyssey to Freedom, I began the chapter on the Constitution with a quote from former President Nelson Mandela, in which he says in reference to the Constitution that:[4]

[It] is a living document. Our understanding of its requirements will and must adapt over time. But the fundamental principles are and must be unchanging. Full understanding of how and why those principles were adopted will help us to ensure that we remain true to the solemn undertakings which we have made to each other and to those who will follow us.

I have said many times that we must respect, but not blame, the Constitution.  It is for us to give life to it, and ensure that it achieves what it sets out to do.

Reconciling with history, truthfully

The Epilogue to the Interim Constitution states that:

The adoption of this Constitution lays the secure foundation for the people of South Africa to transcend the divisions and strife of the past, which generated gross violations of human rights, the transgression of humanitarian principles and a legacy of hatred, fear, guilt and revenge.

These can now be addressed on the basis that there is a need for understanding but not for vengeance, a need for reparation but not for retaliation, a need for Ubuntu but not for victimization.

Many ask whether the Truth and Reconciliation Commission did – or ever could have – truly achieved reconciliation in the face of all the struggles that the people of South Africa had endured.  Of course, this is exacerbated by the fact that there are many who still do not have land and resources, and continue to be frustrated in the realisation of their rights.  As former President Thabo Mbeki has explained:[5]

Within the ANC the cry was ‘to catch the bastards and hang them’.  But we realised that you could not simultaneously prepare for a peaceful transition.  If we had not taken this route I don’t know where the country would have been today.

And so, we made peace.  We acknowledged that truth telling and a process of realising rights was better than a punitive one.  Looking at you today, I have a profound sense of pride at what we as a country were able to achieve.  The road to reconciliation was cobbled together with aspirations, compromises, and an inevitable balancing of tensions between the idealists and the skeptics; for those of us intimately involved in the process, what kept us on this road was the belief that the future of our democratic South Africa depended on it.

So who were these people who I am so nostalgic for, which I should say can severely alter whatever can be understood in the present?  They weren’t all exceptions to their background, skin colour or privilege.  If we see them by the current categories we hold for ourselves, we fail to see what they went through as individuals, even collectives. In order to understand the past, to hold onto hope for the future, we have to delve into the idea of universal sufferage.  I relate this to my time on the TRC primarily because, to my knowledge, it was the first commission of its kind that was empowered to grant individual amnesty.  In fulfillment of its truth-seeking mandate, it was given powers of subpoena and search and seizure.  Of critical importance, it was made open to the public and the media to ensure transparency and that it was accountable to all South Africans.

There is a reason why we call it a rainbow state; we see colours on our skin, red, white, tan, black, high above the ground, directly on the ground, even as a similar group, each has been burnt under the same sun.  In this same way, just as the sun has revolved around South Africa many a time, the best way to understand the present through wholly understanding and acknowledging the past in an effort to move forward.  The individual’s historical suffering reveals the most in this way, which will lead us to how we can maintain hope and deliverance from the painful truths we find each day.

The present, as described by the scars from the past

It is easy to say that from our democratic experiment that has remained fairly stable since 1994, this has brought us closer towards fully evolving from apartheid.  But as I said before, the full history of the toddler learning to walk depicts its tumbles and crawls.  If we are to understand ourselves fully, to distance ourselves from the criticisms we bring upon ourselves and our government, and to better ourselves in the most natural way possible, we must note our pitfalls.

The most obvious might be the fact that there still are remnants of apartness, largely driven by economic disparity.  According to an Economist report in 1994, the unemployment rate was 13%, at the time considered to be the worst; this, sadly, has increased further over the intervening twenty years, and remains one of the most significant challenges facing South Africa today.  According to reports, half of South Africans under the age of 24 looking for a job are unable to find one; and of those who have jobs, a third earns less than $2 a day.  We still see economic disparity drawn directly along racial lines, with 62% of black people living below the poverty line.

This must change if we are to give effect to the fundamental values contained in our Constitution, most importantly that of ubuntu. As our Constitutional Court stated in Dikoko v Mokhatla:[6]

In our constitutional democracy the basic constitutional value of human dignity relates closely to ubuntu or botho, an idea based on deep respect for the humanity of another. Traditional law and culture have long considered one of the principal objectives of the law to be the restoration of harmonious human and social relationships where they have been ruptured by an infraction of community norms.”

If we accept the values of ubuntu, and the fact that each of our humanity is wrapped up in that of others, then we cannot truly live a dignified life until this is enjoyed by all in our country.

The inclusion of justiciable socio-economic rights in the Constitution was a significant milestone, subject to the qualification of progressive realisation and availability of resources.  The goal requires the state to improve the enjoyment of socio-economic rights to the maximum extent possible, even in the face of resource constraints.[7]  But how does one reconcile the understanding of available resources in the face of the rampant corruption that we have seen to take place?  We are entitled, as we were promised, to demand openness, transparency and accountability from all, even those in the highest echelons of government, if we are to enjoy the ideals that were so hard won.

Look back on the path you have taken, but don’t only use your eyes to see

I understand what it means to be young and restless.  I understand the enthusiasm, the need for quick change and the want to leave behind a legacy.  We have, I hope, shared aspirations to see our beautiful country flourish.  I remember when I was at university, a lecturer told my class to look to the left and look to the right, and know that of the three, only one person would remain by the end of the course – and that if you were a woman, you shouldn’t even bother.  We know, thank goodness, that it is no longer the case, and again I remind you of how far we have come on this path to freedom.

The path to freedom may lead in many different directions, but we must not falter as we continue this march.  As I have already said, we must demand accountability and transparency.  We must insist that all levels of government perform its duties to the people of South Africa, from abiding by court orders, effectively rolling out social assistance, and implementing recommendations of commissions of inquiry such as that of the TRC and Marikana.  We must ensure that civil society organisations and activists are fiercely protected, and we must share a mutual outrage at instances such as the killing of the anti-mining activist, Bazooka Radebe, in the Xolobeni community in the Eastern Cape.

Yesterday, I was deeply honoured to receive the Freedom of the City award from the City of Johannesburg.  I am pleased to tell you that I am now what is known as a “Freeman”.  But in having this honour bestowed on me, I realise that this is trite, for I – together with all of you – have enjoyed two decades of freedom.  During the TRC, in reliving some of the darkest moment in South Africa’s history, we remained convinced that it was through this truth-telling and a full understanding of the past, no matter what the circumstances, that we as South Africans undoubtedly have hope for the future.  I still believe this to be true.

Almost exactly a year ago, at a similar university gathering, I issued a challenge to the audience, which I issue to you too today.  The challenge is this: I want you to think of one way in which you can advance the values of our Constitution in your community. Keep track of it; record your progress; and whenever you believe you have achieved what you set out to do, challenge yourself to do something more. Do that in the name of our Constitution and the aims and values that underpin it, and be unrelenting in your pursuit of this.

I am reminded of the words of Vaclav Havel, the former President of the Czech and Slovak Federal Republic, who said:[8]

I am not an optimist because I am not sure that everything ends well, nor am I a pessimist because I am not sure that everything ends badly.  I just carry hope in my heart.  Hope is not a feeling of certainty that everything ends well.  Hope is just a feeling that life and work have a meaning.  It is not an estimate of the state of the world.  It is something that you either have or you don’t, regardless of the state of the world that surrounds you.  It is a dimension of human existence.

Come what may, let us never lose sight of the road we have travelled to enjoy this freedom, and the hope that we continue for the full realisation of our constitutional ideals.

Thank you.

[1] Interim Constitution Act 200 of 1993.

[2] Certification of the Amended Text of the Constitution of the Republic of South Africa1997 (2) SA 97 (CC).

[3] Certification of the Constitution of the Republic of South Africa 1996 (4) SA 744 (CC); Certification of the Amended Text of the Constitution of the Republic of South Africa (as above).

[4] G Bizos Odyssey to freedom (2007) at p 541.

[5] Quoted in Boraine “A country unmasked” (2000) at p 13.

[6] 2006 (6) SA 235 (CC) at para 68.

[7] Chenwi, Lillian; “Unpacking “progressive realization”, its relation to resources, minimum core and reasonableness, and some methodological considerations for assessing compliance”; De Jure 46 Volume 3, 2013, pp 742

[8] Quoted in Boraine “A country unmasked” (2000) at p 2.