Many see empowerment only in terms of redress — "healing the ills of apartheid". If you approach it using that negative narrative, naturally you’ll have people rebelling. We need to couch the public discourse on transformation and BEE in positive terms so that those who must participate in it will receive it sympathetically, not as a propaganda tool, but so that it starts to be perceived as a real win for the country. We need an explanation that presents the silver lining, so that people say, "Well, here’s an opportunity," and look at the long-term benefits.
Let's put this badly written rambling piece in context. Zungu is general secretary of the Black Business Council. He recently served on the panel selected to reform the BBBEE codes.
That should explain everything. Mr Zungu designed the codes to suit HIS specific needs. It's so simple, allow his businesses to be promoted to a level 1 for the first three years of operation. It works like this. First year a startup, certificate expires within a year - level 1. Next level 1 certificate comes from the first year of operation - turnover less than R50m, expires at the end of year 2. Third certificate is based on year 2's performance which still turns less than R50m. Third year his tenders start seriously rolling in. For three years he has had a 10 to 20 point advantage over his competitors (who aren't black).
His article argues that BEE is a "fiscal imperative" and it is "critical that the nation accepts that, for the good of us all, the disadvantaged and the poverty-stricken are cared for and turned into active economic contributors." And then fails to see the irony when he says "it is important that the long-term growth and sustainability aspects of broad-based BEE are argued clearly and that business leaders support them."
If the irony escapes you then consider this. Here is a man who drafted the codes which are recognised as being utter rubbish. He then foists them on the economy without actually proof reading them, nor considering the comments received by business about them. And now he says that business leaders now need to support them. And they need to look at the "long term benefits." It's patently obvious that his BEE codes have no long-term benefits for anyone else other than him and his cronies.
Let's not also forget that he is quoted as saying that the Arcellor Mittal deal was "money for jam". He's a fake, an ANC patsy. There's no integrity here.
Those poor volunteers handing out pamphlets on the corner of the William Nicol and Republic (in Johannesburg). I did not take a pamphlet but my mate Chris did. I would imagine that these somewhat deluded campaigners could count the number of comments from passersby that didn't refer to Nkandla on one hand. I thought I'd help the ANC with their campaign logo. I think it's a little more apt and does talk to their eternal toilet fascination.
You'll notice that there is no visage of our (pure as the driven donkey-cart) dear Zoomer. I would imagine that his image would piss off most urban voters. The rural people, specifically those in KZN, but not Nkandla, are maybe a little more receptive to that smug, Angizwa/Angazi grin.
It's not this blog's business to comment on Thuli's Nkandla report. But I will say that this paragraph reinforces the notion that Zuma is a complete buffoon and continues to portray himself as such.
(Madonsela let) Zuma off the hook on the complaint that he misled Parliament by saying his family paid for the buildings in Nkandla, not the state. Zuma forgot to mention the visitor's centre, also a building but paid for by the state.
"I have accepted the evidence that he addressed Parliament in good faith and was not thinking about the visitor's centre but his family dwellings when he made the statement,"
This reminds me of a job interview I had years ago where I asked the prospective employer whether he had medical aid. He responded affirmatively, yet the package they offered me did not include medical aid. I realised afterwards that he had chosen to interpret the question as whether he had medical aid. A more reasonable employer woud have interpreted the question as whether the company offers a medical aid.
If our president can be let off on a technicality where the public protector gives him the benefit of doubt when it comes to interpretation of the words "family dwelling" then he is too GODDAMN THICK to run this country. Surely this is overwhelming evidence of this.
A bungling buffoon at our expense.
The ANC under Zuma does more than move my bowels, they make me sick.
Unless a CEO is prepared to go on the record, his or her message should perhaps simply not be recorded or, at least, little value should be placed on it. Perhaps we should treat corporate South Africa's armies of spin-doctors with more caution. I know it is hard for executives to "take on" a minister, but there are countless ways it can be done productively.
These executives are failing in the most fundamental way. They are failing to protect their shareholders. They may think that by kissing the government boot they are keeping the wolf from the door, but they are not. They should learn to speak up; to have the courage of their convictions. It isn't necessary to shout. But to speak or write in measured terms of their industry, or legislation that might affect it, means we might begin to have something approaching an authentic conversation about the future of our economy. Gordhan was right. It isn't his fault when companies pay homage to policies they profoundly disagree with.
So said Peter Bruce in this week's Thick End of the Wedge column. He's completely right. There is an innate fear of government reprisals for any form of dissent. Ask Reuel Khoza about what happened to him when he apparently uttered something like "South Africa's strange breed of leaders is a threat to democracy." I think Mr Khoza managed to rise above this and gained an incredible amount of respect from a variety of quarters as a result.
Here I am raising money for a court case against the minister of trade and industry. A court case that would have huge implications for corporates. These implications range from the sheer cost of implementing what the dti wants to sending a message to the government that they many not operate beyond their constitutional mandate (which Rob has most definitely done). Thus far I have not had doors slammed on me but I have fairly good idea that listed corporates would not be that keen to support it. As someone said to me last week, no listed company would go for this because the donation would be reflected in their annual report. All it takes is one shareholder to question the contribution and then be accused of being anti-transformation. I think their fear is justified because of the sensitivity of transformation and race. The fact remains that anyone who supports this action is defending the constitution and preventing the government from barrelling our constitutional rights.
I then turned my attention to those minority groups that will be dramatically effected by the management and skills development codes. The two tables below show the contributions that Coloureds and Indians make to both those elements. Both tables draw the stats from the latest EE Commission Annual Report.
Management/EE
This is simple enough. The 1.69 points are the maximum number of points that Africans will contribute to any measurement under senior to junior management. The total number of points is 2. You have to ask yourself the question why any self-respecting company would be interested in hiring Coloureds or Indians if the maximum number of points that they can be awarded is just on 0.3 points. This will barely make a difference to the overall score. Dispense with them and focus on Africans (right now a generic term – but who knows when it is going to be broken down into a tribal EAP).
Male EAP
Female EAP
TOTAL
Black points' contribution
Black female points' contribution
African
40.70%
34.20%
74.90%
1.69
0.85
Coloured
5.80%
5.00%
10.80%
0.24
0.12
Indian
1.90%
1.10%
3.00%
0.07
0.03
Skills Development
This is a more alarming measurement category. If you have 6% of payroll to spend on training (which you now have under the revised codes) then you are required to spend over 5% on the training of Africans.
Male EAP
Black points' contribution
Female EAP
Black female points' contribution
African
40.70%
2.75
34.20%
2.31
Coloured
5.80%
0.39
5.00%
0.34
Indian
1.90%
0.13
1.10%
0.07
Let's assume that your target spend amount is R600. This is what you would spend on each race group
African Male
R275
African Female
R231
Coloured Male
R39
Coloured Female
R34
Indian Male
R13
Indian Female
R7
In case you were wondering whether the R7 is a typo, it's not, it's what the dti wants. What's the message here – do not invest in the skills of your Coloured and Indian employees. Send them on silly little NQF aligned courses that don't do anything for them or the company.
And white training – that's an additional expense.
The message I got from a respected Coloured academic this morning is that influential Coloureds won't support this because they are too in with the government.
Back to the court case
The pat-on-the-back support is overwhelming. "We are very proud of you", a company director told me. But that's as far as it has gone. It then seems that the money will be raised from smaller companies and concerned entities. Those that benefit the most from this will be those larger corporates who employ the most people. The dti (and hopefully the government too) will be sent back to the drawing board and will have to find other ways to drive their bizarre racist policies. And we'll all win. The issue here is that smaller companies have smaller pockets and they cannot finance battles that larger corporates will benefit the most from.
If this economy is going to survive another Zuma term it needs to take a stand on a variety of issues and this has to be led by those who sit at the top.
It's not as though we had much choice here. The codes, as we all know, are unintelligible - there's this post that almost wishfully hopes that the DTI understand their own codes. But alas when you read through the post you'll see that the DTI can only confirm things that everyone understands and contradict those aspects of the codes that are actually clear. Then there's anecdotal stories about the so-called DTI BEE experts patronising their audience or just plain refusing to answer real questions. Clearly this is an untenable situation. If the people who write the policies have no idea what is required then what are we as the people who have to implement these things going to do? It's not as though this is anything new, historically the DTI has never been able to provide any assistance of any value. They started off well with the Interpretive Guide and then removed it. Therefore BEE as we know it is as a result of practitioners setting standards independently of the DTI. Admittedly we had a better document to work from (2007 codes).
I've been talking about mounting a legal challenge against the codes. We are now ready to start collecting the necessary funds to do this. We do need to stress, and the marketing document is very clear, that we oppose the 2013 revised codes ONLY. This is not an action to wipe out BEE in total. We're following the OUTA route and have created a non-profit organisation under section 8 of the Company's Act (formerly a section 21 company), aptly called the Equitable Transformation Alliance (ETA). I have attached the "marketing" document that we have already started circulating. This post is an explanation of why I am so hell bent on this challenge.
I've written about the rule of law in a few posts. I eventually found a decent definition of the rule of law (discussed here). I'm only concerned about three of the four tenets.
The government and its officials and agents are accountable under the law;
The laws are clear, publicized, stable and fair, and protect fundamental human rights, including the security of persons and property;
The process by which laws are enacted, administered, and enforced is accessible, fair and efficient;
The Revised Codes (36928) cannot be regarded as even being vaguely consistent with these principles. As a result we will request the court to withdraw them and then instruct the minister (and am I hoping that it's not the Rob the Red at the time of the action) that he cannot fix up the inconsistencies and then republish the codes with the same problematic issues. We want the Constitutional Court to decide on what is fair and unfair discrimination in terms of section 9(5) of the Constitution. This is section 9
(1) Everyone is equal before the law and has the right to equal protection and benefit of the law.
(2) Equality includes the full and equal enjoyment of all rights and freedoms. To promote the achievement of equality, legislative and other measures designed to protect or advance persons, or categories of persons, disadvantaged by unfair discrimination may be taken.
(3) The state may not unfairly discriminate directly or indirectly against anyone on one or more grounds, including race, gender, sex, pregnancy, marital status, ethnic or social origin, colour, sexual orientation, age, disability, religion, conscience, belief, culture, language and birth.
(4) No person may unfairly discriminate directly or indirectly against anyone on one or more grounds in terms of subsection (3). National legislation must be enacted to prevent or prohibit unfair discrimination.
(5) Discrimination on one or more of the grounds listed in subsection (3) is unfair unless it is established that the discrimination is fair.
The DTI conveniently hides behind section 9(2) and irrationally argue that the codes are well within the ambit of this section (as the Nats justified apartheid in terms of the Bible). If this is their standard argument then we need Constitutional Court guidance. In my opinion setting draconian empowerment requirements for only white-owned and multinational companies (this is a little bit of a simplification), promoting 100% black-owned companies to a level 1 and exempting them from any nation building activities cannot be fair discrimination. Then to add insult to injury they have written such hogwash that the rules that these black-owned companies are exempted from are not only unintelligible, the department that's supposed to understand them has no idea how to guide those who need to implement them.
This is arbitrary law making, something our Constitution is loathe to tolerate. The problem is that we as the private sector just carry on taking whatever they throw at us. I'm not going to take it anymore. The ETA is going to go to court to let the government know (as OUTA did) that we won't endure substandard legislation. We are more than willing to play by rules that the government deems necessary but these rules need to be fair and clear.
We need financial support to get this action off the ground. We've already raised a fair amount of money but will need quite a lot more. We are looking at a crowdfunding option but in the interim money can be deposited into the attorney's trust account. As we've said on the document, we will respect the privacy of each donor but will also entertain any marketing opportunities that any organisation wishes to exploit by publicly supporting our campaign. If you know of someone who would be willing to help please can you forward this onto them.
I was asked by one of the members of our group what would happen if the Constitutional Court finds against us. If that happens then we understand the rules a whole lot better and if we choose to object to regulations or legislation we'll have to find other ways to do so – we're already seeing this in Gauteng with eTolls.
It's not often that I post an entire article. This is one of the most thorough analyses of the Minerals Charter. It was written by Allan Reid, who is a director and head of mining at Cliffe Dekker Hofmeyr. It was lifter wholesale from BDLive this morning. I have marked those points that I think are still relevant.
AS MORE and more mining companies are put through their paces during charter audits by the Department of Mineral Resources, the outcome of the participation process for the Mineral and Petroleum Resources Development Amendment Bill assumes greater and greater importance.
Compliance with the Amendment of the Broad-Based Socioeconomic Empowerment Charter for the South African Mining and Minerals Industry (known as the Mining Charter) and its precursors has been and remains a material concern for mining companies in South Africa, especially its provisions for black economic empowerment. However, as matters stand, a breach of the charter alone cannot result in the cancellation of a properly granted mining right.
Will the bill, if enacted, give Mineral Resources Minister Susan Shabangu the power to cancel a mining right in the event of noncompliance with the charter?
Clause 2.9 of the charter provides that "every mining company must report its level of compliance with the Mining Charter annually, as provided for by section 28(2)(c) of the Mineral and Petroleum Resources Development Act". It is interesting that neither clause 2.9, nor any other clause of the charter, refers to the scorecard attached to the charter. The purpose of the new scorecard is therefore unclear. Moreover, the ownership element requires only a "yes" or a "no" response, is given no weighting whatsoever and there is no indication in either the scorecard or the charter of the consequences of a "no" response under this column.The scorecard is consequently too vague for legal efficacy. It is only under the provisions of section 47 of the act that the minister has the authority to cancel a mining right. Section 47 does not refer to noncompliance with the charter.Although it does refer to conducting mining operations in contravention of "this act", by no interpretation can the charter be considered as being covered by the definition of "this act" and, consequently, section 47(1)(a) cannot be applicable to a contravention of the charter.
Clause 1(zA) of the bill seeks to overcome this enforcement difficulty by extending the definition of "this act" to include not only the charter, but also the Codes of Good Practice for the South African Mineral Industry and the Housing and Living Conditions Standards for the Minerals Industry. In addition, it seems likely that a section 25(fA) will be added to the act, specifically requiring the holder of a mining right (but not a prospecting right) to comply with the charter. This would appear to empower the minister to institute the cancellation provisions of section 47 for any noncompliance with the charter, the codes or the standards.
The charter, the codes and the standards are first and foremost documents of policy. They were not intended, nor were they drafted as instruments of legislation. Moreover, their content is sometimes contradictory and uncertain.Consequently, and leaving aside the possibility that the charter is itself ultra vires, giving these documents the force of primary legislation would be unconstitutional for vagueness as contravening THE RULE OF LAW PRINCIPLE OF THE CONSTITUTION. It is regrettable that the department has ignored the criticism of the Supreme Court of Appeal and seeks to give policy the force of legislation. It opens up a whole new area of uncertainty within the act. This is particularly so for mining companies which, under previous versions of the charter, received credits for black economic empowerment deals concluded by them.
Under the present Mining Charter, such companies can claim such credits only if these transactions were concluded before the act came into force. This is absurd given the fact that such transactions were done specifically to earn credits for purposes of the act. Clause 2.9 of the Mining Charter gives the department the ability to take into account, in its monitoring and evaluation function, the effect of material constraints that may result in a company not achieving its compliance targets.
Whether the department's changing of the rules by which mining companies must play would constitute a material constraint is unlikely. More likely, however, is that the Constitutional Court will have the final say in whether the charter does have teeth.
The italicised, boldened and underlined sentence rings ever truer for Rob's latest codes. The Rule of Law Principle of the constitution that is referred to above is discussed by the Institute for Accountability in Southern Africa (IFAISA) – Advocate Paul Hoffman's public interest group.
Defining the rule of law has proved to be a policy laden and tricky affair since time immemorial. The most comprehensive and internationally acceptable definition is that of the World Justice Project, which is dedicated to advancing the rule of law around the world. As used by the World Justice Project, the rule of law refers to a rules-based system in which the following four universal principles are upheld:
The government and its officials and agents are accountable under the law;
The laws are clear, publicized, stable and fair, and protect fundamental human rights, including the security of persons and property;
The process by which laws are enacted, administered, and enforced is accessible, fair and efficient;
Access to justice is provided by competent, independent, and ethical adjudicators, attorneys or representatives, and judicial officers who are of sufficient number, have adequate resources, and reflect the makeup of the communities they serve.
Now go back and take a look at gazette number 36928 and compare it to the four principles contained above. These codes cannot pass the first three universal principles. And again I have to ask the question, why are we tolerating this? The miners aren't tolerating this vagueness anymore, they are willing to go to the Constitutional Court for clarity on the "once empowered, always empowered" principle. They are up against the MRD who claim "once empowered, not always empowered". There was an article a few years ago where Susan Shabangu callously told the press that if a black shareholder exits a mining deal then they need to do another one. There'll be more on this once empowered principle in my next post.