23 MAY 2021 —
It’s now clear that the driving force behind the River Club development is Amazon, the company whose profits have tripled during the COVID-19 epidemic. Since there are huge profits to be made from the River Club developments, it is money that is dictating how this development is being pushed through. Faced with this kind of giant corporate-backed development, we are the underdogs in a hugely unequal battle – so we really do need your support to make sure that a fair outcome is achieved. Please support our campaign and our legal challenge to the development us at our fundraising site.
But since Amazon is coming to set up on the Liesbeek (the Amazon campus alone will be about 63000 square meters of concrete), it is interesting to reflect on the parallels and ironies of Amazon helping to destroy a sacred flood plain.
When Jeff Bezos, now the richest man in the world, chose the name Amazon for his start up company, he chose it deliberately, because he wanted to link the company to the largest river in the world to evoke an image of how huge his company would be. And Amazon is huge. In fact, it has been described as a money-making machine, generating revenues of more than $800,000 every single minute. These are what are described as skyrocketing profits, which have made Jeff Bezos, its founder and CEO, astronomically wealthy. Bezos’s personal wealth has increased by $85 billion since the start of the pandemic.
But what Bezos probably did not consider when starting up was that the name ‘Amazon’ is thought to have derived from the reports of a nearly-lost Spanish expedition in 1542 travelling through the upper reaches of the River, who encountered local indigene who were said to be ruled by a tribe of fierce women represented in totems of giant jaguars. The Spanish referred to them as Amazons – after the legendary female warriors of Asia Minor written about by Herodotus and Home. The story goes that the Spanish were subsequently engaged in a skirmish with these fierce women warriors, but survived – so the name stuck for the river. However, 32 years earlier was the landmark defeat of the Portuguese intruders in the Liesbeek Valley by the Khoi. So, no Portuguese colonists got to name the Liesbeek – that was left to the Dutch whose dispossession of the Khoi commenced some decades later and left the river named as the Liesbeek.
But is Amazon’s business model really a sustainable one? Stewart Patrick writing for the Council for Foreign Relations makes the point that “the extraordinary growth of a cutting-edge company and the clear-cutting of much of the planet’s most biodiverse ecosystem” in the Amazon are deeply connected. “At the same moment that technological innovations are bringing us closer together, our unsustainable patterns of production and consumption are threatening the planetary life support systems on which we depend”. He laments the failure to consider “what the global economy values, what it doesn’t, and what this portends for our future” warning that “… we neglect the health of the far more valuable Amazon rainforest and the ecosystem services it provides. In our relentless obsession with accumulating financial capital, material comfort, and convenience, we have given short shrift to the natural capital that keeps our biosphere functioning and allows us to survive and thrive. These attitudes are not sustainable.”
What we are seeing on the Liesbeek floodplain is the preoccupation with financial capital, material comfort, and convenience, and the decimation of memory, of irreplaceable intangible heritage and a green belt slated to be both a national heritage resource and part of a coast-to-coast green corridor in the City’s overlooked planning policy spectrum.
Ironically, the Amazon River is currently under serious threat from the Brazilian government which is undermining constitutional entitlements to sovereignty by indigenous people in Brazil by enabling massive transportation infrastructure to be built on indigenous territory, involving 386,000 square miles of the Brazilian Amazon – one-fifth of the jungle. President Bolsinaro argues that opening the Amazon will boost the economy. Does that sound familiar? Mayor Plato, in his rejection of all appeals against the rezoning, transformed what is irrevocably the destruction of the Liesbeek Valley’s intangible heritage into a “significant boost to the Cape Town economy.”
Critics of Amazon point to the way in which Amazon has destroyed competition. It started life as online bookstore, putting many independent booksellers and even established book retail chains out of business. But Amazon had an unfair advantage because, as an e-commerce company, it was exempt from sales tax in many US states until 2018, and its reliance on distant warehouses and minimum wage labour meant that its overhead costs were kept low. As a result, there have been widespread protests in Europe against Amazon’s expansion (as illustrated in the image above), seen as a US-style mass consumer culture at odds with a long local tradition of neighbourhood stores. Amazon’s record is one of avoiding taxes and squeezing small and medium sized businesses. We wonder what impact this will have on small businesses in Observatory, Salt River and beyond. One very sneering response to our campaign sent us an email, snorting sarcastically that “the fact that Amazon provided a service to millions of people who were unable to go to the shops, and it thereby made a profit, is how capitalism works.” We won’t go into an analysis of capitalism here, but the unfair advantage given by states to some corporates is also how capitalism works and also what some of its most ardent former supporters decry.
For example, a former Amazon Vice President, Tim Bray, who resigned in protest against Amazon’s practices during the Coronavirus pandemic, noted that “Amazon is exceptionally well-managed and has demonstrated great skill at spotting opportunities and building repeatable processes for exploiting them. It has a corresponding lack of vision about the human costs of the relentless growth and accumulation of wealth and power…” He called for “a combination of antitrust and living-wage and worker-empowerment legislation, rigorously enforced” as “a clear path forward.” Well, we agree with him. Amazon’s decision to support this development shows a complete lack of vision as to the implications of placing 150 000 square metres of concrete in a sacred floodplain of environmental and heritage significance. And it’s not as if Amazon weren’t aware, we tried telling them twice but were ignored.
And on the matter of legal tax avoidance, there is a difference between complying with the minimum required by law and doing what is right. In 2019, Amazon was reported to have paid just 1.2% tax in the United States, where the corporation holds its headquarters. President Biden cited Amazon as an example of a company that didn’t pay any federal income tax, drawing a contrast with individuals unable to cut their tax bills to zero.
Oxfam estimates that if Amazon were to pay current US corporate tax rate of 21%, it should contribute an additional $2.5 billion in taxes a year to US economy. In the US, that amount would be enough to keep 1.7 million Americans from going hungry for a year under their Supplemental Nutritional Assistance Program. For South Africa, that would translate into more than double the amount of money South Africa has to find to vaccinate our population against COVID-19. So, that’s a lot of money that is lost to social benefits. Moreover, it has been argued that everything the company does depends on publicly built infrastructure and publicly funded technology Yet Amazon is getting a huge handout from governments.
Instead of giving back to the societies that helped it grow, the corporation starves them of tax revenue. It is well known that Amazon has negotiated special deals for locating its infrastructure headquarters in various cities, and has the economic leverage to essentially dictate terms, a dynamic readily apparent in company’s research searches for new headquarters in the US. This has led to often fierce resistance from local citizens. That raises the question as to whether the City of Cape Town offered Amazon any sweet deals to locate at the River Club? It might also explain why the City were willing to bend rules wherever they could to ensure this development application went ahead, even though it contradicted multiple planning, environmental and heritage policies.
Of course, we are not even talking about Amazon’s labour practices, which have been severely criticised for their unhealthy and unsafe working conditions. Amazon has had to defend itself from allegations of spying on workers to prevent unionisation.
Moreover, Amazon’s resistance to unionisation was marred by confirmed reports that fake twitter accounts purporting to be Amazon employees posted positive responses about working conditions and anti-Union sentiment in order to undermine unionisation. These accounts were closed by Twitter once found to be false.
Here’s the thing, the OCA and hundreds of parties have been spammed by anonymous emails over the past week, from unnamed individuals trying to put misleading information into the public domain. The parallels are a bit unnerving. We don’t know if there any connection between Amazon and the unsavoury use of anonymous emails to discredit opponents of the development.
And Amazon’s record on Climate Change is not so cool either. Remember, this development is planted on a flood plain, will infill a river and put down 150 000 square meters of concrete on a green space. Amazon Employees for Climate Justice lamented Amazon’s support for the Competitive Enterprise Institute, a “think tank” with a long history as a key leader in the climate denial political movement and Amazon’s donations to members of Congress who consistently vote against climate legislation. Perhaps that’s why they don’t care that the River Club development was approved without an expert study of Climate Change mitigation and adaptation, and despite the City of Cape Town’s own Environmental Management Department lodging multiple concerns about the inconsistency of the proposed development with the City’s own Climate Change policies.
What about jobs? Mayor Plato trumpeted that the River Club development will “create up to 19 000 indirect and induced jobs”. (what exactly is an ‘induced job?’) But what Amazon won’t tell us is that every job created at Amazon may destroy one or two or three others. Amazon and other online sellers have decimated sectors of the US retail industry in the past few years. Millions of retail jobs are threatened as Amazon’s share of online purchases keeps climbing. So, it’s a far more complex calculus than the rhetoric spewed out by the City in their enthusiasm to welcome Amazon to Cape Town.
Let’s repeat our position – Amazon is welcome to set up its HQ in Cape Town, as long it complies with South African labour law, and does not use anti-competitive advantage to put other retailers out of business. Most certainly, it should not be getting any rates rebates from our City which needs all its funds to support affordable housing and respond to the many development challenges facing the City. And we know Amazon were considering other sites in Cape Town and they should sensibly withdraw from the River Club site if they really want to honour Khoi heritage and respect the environment.