Not much is happening in Junsbeck at the moment. For the first time in a long time I actually have time to blog - I'm not as compulsive as Fred Wilson, although I wish I was. So, whilst I wait for the next game to come on I'll write about an upcoming court case that has huge ramifications for the future of all legislated charters (mining and petro-chemicals etc).
The studies confirm that mining transformation is not where it should be - well at least KIO Advisory's study has found this. I haven't read the whole report and can only comment on what I have read (which is almost nothing). It comes just in time to justify the new Mining Charter, which is now very overdue. Those bits of the report that I have read say that the ownership target is nowhere near it should be. Knowing the ANC government as well as I and everyone does - we can be sure that those statistics will be thrown back at the mining sector and might inspire the department to withhold licenses because the transformation targets have not been met. Maybe.......... but then maybe not.
JSE-listed fishing company Oceana and its subsidiary, Blue Continent Products, are taking government to court, frustrated that its five applications over the past two years, seeking the transfer of fishing rights or quotas from third parties, are being declined or ignored by Marine & Coastal Management (MCM).
At the centre of their legal challenge is a transfer policy, effected last July, which states the minister in charge of MCM must approve every transfer. It also lays out the rules for the transfer of rights, placing importance on black ownership and management instead of the broad- based socioeconomic impact.
The policy is trying to ensure that a 100% black-owned rights holder should sell its rights to another 100% black- owned entity so as to not dilute the transformation. For example, if you’re 80% black-owned, you can’t transfer to a 70% black-owned company.
But Oceana is challenging this policy, saying it’s unlawful, invalid and should be set aside. It argues that government is assessing transformation too narrowly — it doesn’t use the broad-based black economic empowerment (BBBEE) codes of good practice. Elements of employment equity, preferential procurement, skills development, enterprise development, and socioeconomic development, which account for 70% of the weighting of the BBBEE scorecard, are excluded in the transfer policy.
What Oceana is arguing is that their level 4 BEE status has to count for a hell of a lot more than this narrow-based view. A precedent will have long term repercussions for the mandatory equity targets in the mining charter. As the FM said in the opening paragraph of this article
The state is in for a bruising legal battle over fishing rights, which could have far- reaching, precedent-setting consequences for transformation, not only in the fishing industry but across the economy.
Bring it on I say - there is far too much arbitrariness in this process. And it must violate numerous constitutional rights - one being the right to work. Surely an employer that violates certain pieces of legislation like the Basic Conditions of Employment Act must face the consequences. But I cannot see how empowerment legislation should be allowed to prevent an employer from employing people because they cannot meet certain targets - this cannot be fair or constitutional.
As with similar legislation - we'll let the courts decide.
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