White compatriots still the biggest BEE and AA beneficiaries

According to the Employment Equity Report released this week, white people have benefited handsomely from affirmative action thanks to the toothlessness of our government’s regulatory framework and the inefficiency of the department of labour and department of trade and industry (DTI).

Starting with the department of labour, it is clear to me that Labour Minister Membathisi Mdladlana enjoys making noise every time this report is released. Last year, at the release of a similar report, he threatened to name and shame non-compliant companies sending corporations into a panic. This year’s threat is a fine of some or other astronomical number. He has probably spoken no more than a few times on the matter in a year. The last salvo from his quarters was his unbridled anger when Chinese South Africans were declared black by the courts. You can’t fault him for providing much-needed comic relief to these often terse debates about race and change when he said the Chinese “pretend to be dumb when they are not”.

He should have been more concerned about corporations that play clever with issues of redress such as the habit of manipulating their score cards. It is not talk that will make business change, it is something that will hit the bottom line that will make them stop and take notice. Obviously if you merely threaten, business is likely to ignore you and carry on with business as usual.

Sadly the report shows that business has largely ignored affirmative action provisions and can quite frankly not be bothered by the niceties of pigmentation when they promote and appoint in the name of profit. They do so as if no law, requiring a new balance, has been passed. I believe, it is not even a matter of scarce resources and skills any more. Many of those who produce glossy transformation documents hardly mean a word of it — they do not remember half of what is in those documents and life goes on frankly without a care in the world. Hence after 10 years of preaching the gospel according to Mdladlana we sit with 60% of all new appointments and promotions still going to white people. So much about affirmative action punishing white people in our country.

So spare a thought for Jimmy Manyi, a lone ranger in the corporate boardrooms full of token blacks who, as he so succinctly put it, are given big titles, big offices and no meaningful roles in corporations. Let’s call this fancy footwork in the scramble to be compliant. Those blacks who are not tokens must do much more to be a thorn in the side of corporations that are not taking change seriously and not be their public-relations fodder. They must guard against being the shameless faces of companies concerned only with their bottom line and not the sustainability of the business environment in our country. The poverty levels in our country and exclusion of the majority from opportunities is not good for business stability in the long run. It’s amazing how many top executives simply can’t fathom this glaring reality.

Coming to BEE — white untransformed companies continue to get government business — all they have to do is sell 25% of their shares to black shareholders and then they are rewarded with government tenders. The black “shareholders” who have become helpless pawns in that chess game end up with debts they can’t service and eventually lose these shares back to the original owners who by that time have benefited from tenders and are en route to rent the next black shareholder with an appetite for more debt and so the vicious cycle lives on.

So I ask quite frankly: who is the major beneficiary of BEE? Evidence points to the same old white owners of business. In its narrow application, where BEE does not deal with management control, skills development, enterprise development and preferential procurement in a serious way, the beneficiaries are big business.

Sadly the DTI would not be able to give you a coherent story about the extent to which business is changing this unfortunate story in line with the codes of good practice because they simply don’t know. They have no way of telling because the monitoring body that the law requires — the BEE council — is not yet established. And so business has been left to its own devices to do pretty much what it desires. The report on the dismal affirmative action figures are therefore only the tip of the iceberg of non-compliance with the other six codes where: there is poor or no management control, there is scant spending on skills or development of enterprises and the procurement habit of the old boys’ club progresses without a hint of irony.

So I ask again quite frankly, who benefits from these policies if no one implements them?

Instead of a conclusion let me say that it is clear to me that affirmative action can only truly work if the entire country is behind it — black and white. The mindset must change. I intend to explore this theme further in the next weeks … come back for more frank reflections on this matter …