Labour government rejects call to reinstate Bain & Company's ban amid controversial state capture links

British Chancellor of the Duchy of Lancaster, Pat McFadden, is interviewed by Sky News at the Labour Party Conference in Liverpool, Britain, 24 September 2024. The conference runs from 22 to 25 September at the Arena Convention Centre in Liverpool. EPA-EFE/ADAM VAUGHAN

By Peter Fabricius

22 Jan 2025

Keir Starmer’s government has declined an appeal from Lord Peter Hain to bar Bain & Company from British government work.

Prime Minister Keir Starmer’s Labour government has declined an appeal by Lord Peter Hain to reinstate a ban on the international consulting firm Bain & Company from doing any work for the British government.

In 2022, Hain persuaded Prime Minister Boris Johnson’s Conservative government to bar Bain from winning any UK contracts for three years because of its complicity in State Capture in South Africa during Jacob Zuma’s presidency.

However, the next Conservative government of Prime Minister Liz Truss lifted the ban in 2023, two years early, because it said that Bain had “cooperated with our investigations” and had undertaken “self-cleansing actions”.

Hain, a Labour Party parliamentarian in the House of Lords and a former leader of the anti-apartheid movement in the UK, deplored this move as a “cop-out”.

In October 2024, he wrote to the new Starmer government’s cabinet secretary, Pat McFadden, urging him to reinstate the ban on Bain. He said “Bain was the chief global corporate culprit in South Africa’s decade-long State Capture scandal” yet had later won UK public sector contracts worth up to £63-million between 2018 and 2022.

He recalled that in South Africa “Bain directly assisted former president Jacob Zuma to organise his decade of looting and corruption, the company earning fees estimated at £100-million (over R2-billion) from a variety of state agencies and enterprises”.

Bain Former partner at Bain SA, Athol Williams, testifies at the Zondo Commission in Johannesburg on 24 March 2021. (Photo: Gallo Images / Papi Morake)

One of those contracts aimed to disable the South African Revenue Service (SARS), as Judge Robert Nugent had concluded in his Judicial Commission’s Report.

And Hain said the Zondo Commission into State Capture had found that Bain’s involvement in SARS had been “unlawful” and had highlighted a number of irregular procurement processes by the company as well as clear plans to disempower SARS’ enforcement capabilities.

Former UK prime minister Boris Johnson at Fortune’s Global Forum in New York City on 11 November 2024. (Photo: Jemal Countess / Getty Images for Fortune Media)

Hain added that “with the direct involvement of its senior Boston and London management, Bain tried everything possible to cover up its complicity”. That had included punishing and seeking to discredit one of its former senior global partners, Athol Williams, who turned whistle-blower and had to flee Cape Town to safety in the UK.

“The very company who possessed the expertise to bolster South Africa’s defences against the ravages of State Capture, in fact deliberately weakened these defences and profited from it,” Hain wrote to McFadden.

British Chancellor of the Duchy of Lancaster, Pat McFadden, is interviewed by Sky News at the Labour Party Conference in Liverpool on 24 September 2024. (Photo: EPA-EFE / Adam Vaughan)

“Bain asserted that all this was the work of one rotten apple, a Partner who had since left the company. Yet, the work of its South African office was endorsed by senior managers in London and in its headquarters in Boston, and many senior partners who later worked in London were based in the South African office during the corrupt Zuma era.

“Some of the very people that broke public procurement rules, that colluded with Zuma and committed a ‘premeditated offensive’ against SARS, also worked in Bain’s London office consulting for UK public institutions and businesses.

“Surely Bain should not be permitted to operate public contracts in the UK – at least until it has repaid all the fees earned from the South African state during the Zuma-Gupta years, made full disclosure, apologised to and compensated Athol Williams, and the Zondo-recommended legal action against the company has been completed?

“I should add that the South African government has suspended Bain from working for it, as I am asking you to do.”

However, McFadden replied to him this month that he had obtained expert legal advice that the government could not extend the ban on Bain doing work for the government because no new material information had been provided that had not been considered by the previous government when it lifted the ban.

But McFadden said he shared Hain’s concern and so he would use new powers, which would come into force on 24 February 2025, to address any further instances of supplier misconduct that might arise.

Hain told Daily Maverick: “Although I’m frustrated, I know that Cabinet Minister McFadden would have suspended Bain if legal advice permitted. Indeed he went out of his way to double-check that advice. Bain should take no comfort. Their reputation remains toxic.” DM

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