This does need to be discussed. Wait it's not a discussion, it's a monologue.
There are two empowerment stories that have made the headlines. The first is Dischem. I don't' want to go too deeply into this story. When I first saw the Whatsapp I thought it was fake news. In fact my mind suggested to me that this was some brand of anti-Semitism. I have met Ivan Saltzman a few times. He's an interesting guy, definitely sharper than most people. You wouldn't think it when you met him, but I think that's his style. So it turns out that this story was true. Dischem has too many white managers (90%of the manager are purportedly white males). Ivan says tohis staff, we could be hit with a fine of 10% of our turnover so no more wittes, OK?
This didn't make sense for two reasons. Firstly that employment equity requirement is in draft form and is unlikely to make it beyond promulgation because it will be fought all the way. And that's right, this government is incompetent and useless and they deserve to have their race-based quotas destroyed by the courts. Secondly, Dischem would probably destroy the department of labour in court. We are talking about sheerincompetence here, doesn't take a great lawyer to win this one – especially if the department hires the advocate for the stars.
I thought there must be some other reason. Was it because they needed to renew a licence? Are they gunning fo a large tender? The last official word is that Ivan was scared of the fine and he withdrew the notice, he was facing a bit of a commercial boycott and general press disgust – although he did find an unlikely ally in the black business council.
Then this weekend there was a sensational heading in the Sunday Times (as usual it's behind a paywall so you can't read it) To save Eskom, empowerment must go
That's not really the sentiment of the Eskom chair – Mteto Nyati. What he said was
- Change the procurement rules to get rid of middlemen that mark things up by multiples of millions. He specifically spoke about foreign purchases. You see the so-called localisation rules create BEE "entrepreneurs" (read rent-seeking enablers) who act as agents and get paid a fortune. Eskom can't afford this. Id est "Procurement rules are not agile as they should be, including rules which say you cannot use suppliers that are not local. When the supplier of equipment is international you have to use a middleman to satisfy the localisation rule. There's no place for those kinds of practices now. We need to remove costs from the equation." He then continues "Internal corruption is largely at the back of empowerment processes that promote local small business (what he doesn't say is – businesses who cannot actually deliver on what they are selling, we are not talking about semi-skilled stuff, this is high end stuff)
- "The other area where we can help is around skills, and rigid rules around who to employ in terms of equity targets. Right now we need to be focussing on the best person for the job… regardless of how they look."
That's it. Naturally the bbc, who are Dischem's best friends have now become Eskom's new enemy.
The Black Business Council (BBC) has slammed Eskom board member and former MTN CEO Mteto Nyati for his statement that South Africa's empowerment rules hamper the power utility's performance. The BBC believes Nyati's words are a deliberate diversion from improving its Energy Availability Factor to 75% and providing South Africans with a reliable electricity supply. "The Black Business Council strongly condemns the irresponsible and reckless utterances purported to be those of Mr Mteto Nyati regarding transformation and localisation," it said in a statement. "The purported views deliberately omit to mention corruption that was committed by white-owned companies at Eskom, as highlighted by the Zondo Commission." It added that Nyati's views project that blacks are being done a favour in their own country, where they are a majority.
There you have it, multinational companies that do not have a complexion are now white as well as the guptas and salim essa.
I don't know what else to say. I have no time for the black business council, and they probably have less time for me.
In short, Eskom is not reneging on its broader empowerment commitments. If you provide goods or services that are not critical to their operations you're still going to need ownership. If you are a manager that is a generalist then EE rules will apply. This is bad headlining and sensational bbc-ing.