Paul Janisch

Who stands to benefit from the revised BEE codes

A rhetorical question I think. The short answer is the African elite, the longer answer is African people as undefined. As an aside, I looked over the EE Commission's report to see if a definition of African, Coloured or Indian exists and could find nothing, the best I could find was here, which asked the question "how do you describe yourself?".

Back to the African elite. I think this is deceptive and mischievous on my part. This description is based on the dubious behaviour of our higher politicians and their various business advisors. However this elite is actually a lot bigger than mere politicians and their cronies. A larger number of employed people form part of this elite because they contribute a large number of points to a company's BEE score. If you add the total number of points under management (less board, top management and bonus points) with skills development (also excluding bonus points) you get 25 points (9 from EE and 16 from skills). These are all subject to the loosely defined economically active population (EAP) targets. This is the breakdown of how each race contributes to those 25 points.

African	18.58
Coloured	2.68
Indian	0.74
AF	2.55
CF	0.37
IF	0.08

Poor Indians – they really aren't worth much within the context of EE and skills, less than a single point in total.

Perhaps you might be asking why would the African elite contribute so much to skills development. It's actually quite simple – with the target being doubled to 6% of payroll and the measurement of skills development tightened up, companies will have to spend more money on training African people. I estimated in a post last year that Nedbank would need to spend an average of R19,5k on the training of each black employee. You cannot spend this amount of money on lowly employees because they will not benefit from an expensive courses. To meet this target they will have to focus on the more skilled employees, the higher they are up the food chain the more expensive the courses.

And then there is the ownership issue. 53% of the points available on the revised scorecard are directly concerned with ownership. This ownership is not simple encumbered ownership. It's paid off ownership. The definition contained in the codes for 5130 contains this requirement "has earners all the points for Net Value". By the way, my 5130 post should really read 51/30.1 (thanks to the reader who pointed this out to me). There are two implications here

1. If you are looking to create this type of company you need to donate the shares, forget about finding a willing investor – history has shown that they are few and far between
2. You need to create another vehicle that fronts for you

But then you've got those established black owned businesses who could generate huge numbers of points to a corporate. Those are owned by the black elite (not specifically African but characters like Zungrabber are in for one hell of a ride), and when it comes down to the wire they will simply refuse to implement any form of a BEE scorecard because they don't need to. Now we can see why the PPPFA has to be either amended or repealed.

Having dumped all this cynicism into the ether I can see why the codes have been drafted in this way. If they were equitable, clear and agreed to then we'd probably make massive strides in building the economy. The desire to right the wrongs of the past makes up this thin veneer at the top of the codes, the substance plumbs grotesque depths with those who have already feathered their nests looking to milk this run-off-the-rails train for the next four years.

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Quota, un-quota: Mbalula's 'Constitution? What Constitution?' moment

A rather decent explanation of the constitutionality of racial quotas at national level.

Implementing this kind of ruling is also entirely unconstitutional. It can, should and most likely will be challenged in the ConCourt if it is implemented. BEE is not exactly the same as quotas. Players are not "interviewed" as such; the interview process happens at domestic level. This is where quotas of some sort aren’t the worst idea and could be considered in line with the Rooney Rule in America. A forced implementation of such a system at national with the threat of funding cuts and the lot is discrimination which then becomes an employment issue and can be challenged in court.

Furthermore, threats of blocking sponsorship could be considered a restraint of trade. Legally, a system like this, in a modern and democratic South Africa, holds little water. From the outside looking in, it looks like nothing more like subtle pre-election campaigning.

via www.dailymaverick.co.za

One of the comments on the Daily Maverick page is perhaps the funniest I've read in a long time, credited to a JvNk.

Why stop at transforming the teams only? There is a much bigger picture, namely the supporters and spectators. So by all means, force the Lions, Bulls and Boks to have 60% black players, but then transform the supporters too.

Force the turnstiles at Loftus to do pencil tests, and strictly admit 6 blacks for every 4 white spectators. Have DSTV force its clients to identify their racial group, and then force DSTV to switch off whites' rugby channels until there are 6 black viewers for every 4 whites.

I'm willing to wager that some wANCer is looking at this and thinking what a great idea.  From now on................  

• ALL television adverts will take EAP targets into account when seeking actors.
•  Places of worship will not have a quorum unless the congregation matches the national EAP. 
• Your Facebook account will be cancelled unless you have suitable EAP representation - those that don't must send a plan to Mildew Heffalump explaining when their Facebook friends will meet the national targets.  
• The Universe will be regarded as anti-transformation until white holes are discovered and they match the EAP
• The game of chess is not representative of the South African population and is hereby deemed to be anti-transformation.  From now on 28 of the 32 pieces need to be black, 13 of those 28 need to be black female and the remaining four need to be white.  As you can see the white chess men/people have an overwhelming advantage over the black ones so only 6 black pieces may be taken per game

The new Commission or Employment Equity report is out - these are the latest figures.  They are correct - the actual figures on page 13 don't total 100.

 

	Male	Female	TOTAL
African	40.3%	34.9%	75.2%
Coloured	5.6%	5.0%	10.6%
Indian	1.9%	1.2%	3.1%
White	6.2%	4.6%	10.8%
TOTAL	54.0%	45.7%	99.7%

 

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Black is black – I want my black back

What does a ruling party do when they realise that their definition of black is not working for them? Simple, they use the economically active population (EAP) to create degrees of blackness. Perhaps the gestation of this thinking went along these lines.

ANC/government person 1: Soooooooooooooo we've got the definition of black in the BEE Act and the Amended Employment Equity Act as a "generic term for Africans, Coloured and Indians (subject to a few conditions.)

ANC/government person 2 (who has more than a standard 3/grade 5 and can read legislation): Indeed we do.

ANC/government person 1: This is not working for us.

ANC/government person 2 (who has more than a standard 3/grade 5 and can read legislation): Why is that?

ANC/government person 1: The bloody Coloureds and Indians are taking all the jobs and business and skills development spend and enterprise development and socio-economic development opportunities from the Africans. Our people (because the ANC is really an African party) are suffering.

ANC/government person 2 (who has more than a standard 3/grade 5 and can read legislation): Let's take a lead from the great leaper of vines – jungle jim (Mr Manyi as Hendrik Verwoerd would address him) and use the EAP. This way we get to prioritise jobs and other benefits for Africans.

ANC/government person 2 (who also has more than a standard 3/grade 5 and hence has no hope of running the country and cares not a fig for the Constitution): What a spiffing idea, I'll tell Mildred and you tell Rob.

On the way to see Rob, ANC/government person 1 bumps into Fikile Mbalula……..

The casual reader might think that this author has a major problem with this logic. Actually he doesn't (if I may speak for him). There is little doubt that Africans (who aren't white by the way even though it's patently obvious that white South Africans are Africans) are not benefiting as greatly as perhaps Coloureds and Indians are. But there are two problems

1. There is no legislation that allows the government to separate black people into further racial qualifications.

   The word black under both the EE and BEE Acts remains a generic term for "Africans, Coloureds and Indians".

2. It pisses off Coloureds and Indians

The second point is the most relevant because there is now a genuine outcry from Coloureds in the Western Cape who make up more than 40% of the EAP in that area and Indians in KZN. Regarding the latter there is a complete over-concentration of Indians in that region.

In the province of KwaZulu-Natal, where the majority of South Africa's 1.4 million Indian-origin citizens live, business and community leaders say such a law would reduce the number of jobs available to Indians because the national demographic population figure would be overwhelmingly black. Indians were shipped to KwaZulu-Natal from 1860 onwards to work as indentured laborers at sugar cane plantations, according to Ravi Pillay, an ANC member and provincial minister for Human Settlements and Public Works in KwaZulu-Natal.

Even Vivian Reddy who is a great Zuma acolyte is also not in favour of this.

An Indian businessman based in KwaZulu-Natal, Vivian Reddy said Indians were unfairly and unjustly being prejudiced by the proposed law.

That's a turnaround for the books.

The draft EE Codes of Good Practice have been roundly lambasted by a wide variety of people – including Marius Fransman. The period for comments has now past and Mildew Pachyderm has issued a press release

The draft Employment Equity (EE) regulations issued by the Department of Labour are in no way intended to disadvantage any of the designated groups, according to the Minister of Labour, Mrs Mildred Oliphant.

"Contrary to what some parties have claimed, the regulations were in fact introduced to enhance the implementation of the law. We opened the process up for comments and we sincerely appreciate and welcome all the comments that have been made. The social partners at the National Economic Development and Labour Council (Nedlac) are now busy consolidating these inputs. This means the final product will be a result of a consultative process that reflects the views of a cross-section of our population," she said.

These two paragraphs deserve a little more attention. The "in no way intended to disadvantage" disclaimer doesn't work anymore. We've learned the hard way from number 1's insincerities that they don't care about the consequences of their legislation. What she really means here is that the regulations are designed (not specifically unfairly as I mentioned earlier) to benefit Africans. They don't INTEND to disadvantage Coloureds and Indians even though they do in fact disadvantage them. We can take that with a pinch of salt.

And then the kicker – by now your bullshit radar must be on high alert – the social partners are consolidating the inputs. Let us consider Rob and his divisive codes – there is no way that the dti or Rob considered any of business' comments. They went ahead and published what they wanted to publish all in the name of section 9(2) of the Constitution. Rather like die-hard Nats justified apartheid.

AND

There is NO WAY ON god's GREEN EARTH that we can trust the ANC government's word here. The chances are overwhelming that they will go ahead and publish these codes as drafted and hide again behind section 9(2) and say – we never intended to prejudice. Yes, like Hitler never intended to kill Jews and Poles, all he wanted was a third Reich without them in it.

What then happened to ANC/government person 1 bumping into Fikile Mbalula (who is regarded by Gareth van Onselen as "the worst sports minister South Africa has ever had") and tells him about this new EAP thing that's taking the ANC by storm. Fikile yells "Europia" – we're going to set 60% quota targets on the major sporting codes (perhaps all of them). The press haven't really got the proper story here – in a long interview with Xolani Gwala on 702 last night he explained that the quotas are not generic black, nein mein Herr, these are African quotas.

As you can see, the EAP is a firm ANC policy. Whilst not specifically unreasonable (although I don't agree with national teams being bound to quotas) they do not have Constitutional or legislative support. In the absence of this the government cannot arbitrarly impose their will on us.

And this is one of the core tenets of our court case against the dti and their new codes.

Black is black anybody

 

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Manyi crEAP and the new codes

It's not possible to think about the economically active population (EAP) without considering the ANC's institutional racist. I was not aware of the EAP until I caught jungle mouthing off about the oversupply of coloureds a few years ago. This EAP now allows the government to institutionalise the concept of degrees of blackness. It's not supported by the Constitution but has found favour within the Employment Equity Act. And for those who don't know – it's found its way into Rob's Folly (aka the new BEE codes).

The question is "can the BEE codes of good practice include EAP targets?". Rob the Horrid Red would say most certainly, Lionel October would tell us that the codes are very clear, concise and written in uncontradictory English (because he's read them). I would argue not. Take a look at this logic.

This is the General Notice on page 3 of the codes.

NOTICE 1019 OF 2013

DEPARTMENT OF TRADE AND INDUSTRY

 

I, Dr Rob Davies, Minister of Trade and Industry, hereby:

1. Issue the following Code of Good Practice (the codes) under section 9 (1) of the Broad-Based Black Economic Empowerment Act, 2003 (Act No 53 of 2003)

I've underlined the relevant Act because the new BEE Bill is still a Bill. This means that the 2003 Act is relevant. In this Act, the term black is defined as "a generic term which means Africans, Coloureds and Indians". Each "race group" that may be regarded as black is equally black. It doesn't say "a generic term in line with the EAP statistics". The Act does allow a code of good practice to differentiate between people. Section 9 (4) says

(4) In order to promote the achievement of equality of women, as provided for in section 9(2) of the Constitution, a code of good practice issued in terms of subsection (1) and any targets specified in a code of good practice in terms of subsection (3), may distinguish between black men and black women.

Where then does the BEE Act itself allow for the EAP? It doesn't. The BEE Bill makes no reference to EAP either, all it does is repeat the definition of black that we find in 29617. I know that Lionel will refer us to section 9 (2) of the Constitution as a justification for this. Section 9(2) cannot be read in isolation and must be seen within the context of section 9

Equality

(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.

What Lionel now needs to do is demonstrate that the inclusion of EAP targets is fair within the context of BEE. We know from a variety of court cases that Solidarity has brought before the courts that there are serious problems with the implementation of EAP targets in organs of state. If we allow the EAP targets to permeate a BEE implementation we will find grounds for constitutional unfairness. Think in terms of the, as Lionel would say brilliantly written and ultra-clear skills development code. About 90% of all skills development spend needs to be directed towards Africans. From a points' perspective that 90% will get you about 7.2 points out of 8 – there is no incentive to spend any money on coloureds and Indians to make up the remaining .8 points. Then you've got an issue with the training of white people – this spend is over and above the 6% of payroll spent on training black people. And because this 6% is way over most corporates' training budget it will discriminate against anyone who isn't black.

I would argue that the EAP targets are not fair, as per section 9(5) and on top of this they are not supported by the very act that creates the BEE Codes – namely the BEE Act.

The court in the Solidarity obo Barnard v SAPS (165/2013) case said the following

'Dealing with race classifications, as is necessary under the EEA, feels almost like a throw-back to the grand apartheid design. If we are to achieve success as a nation, each of us has to bear in mind that wherever we are located, particularly those of us who have crossed over from the previous oppressive era into our present democratic order, it will take a continuous and earnest commitment to forging a future that is colour blind....For now, ironically, in order to redress past imbalances with affirmative action measures, race has to be taken into account. We should do so fairly and without losing focus and reminding ourselves that the ultimate objective is to ensure a fully inclusive society - one compliant with all facets of our constitutional project.'

Forcing the EAP targets on the private sector as an absolute requirement cannot be regarded as fair.

Oversupply of Coloureds anyone? 

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