- We support the need to redress the legacy of apartheid.
- The best way is through sustained job-creating economic growth, education and skills-training aligned to the needs of the economy.
- South Africa has spent at least R500-billion on narrow-based “BEE” in the past 19 years. This has not created new jobs or broadened the base of the economy to any significant extent.
- The empowerment results have been dismal: we have only managed to “over-empower” a small, politically-connected elite.
- We need to redress both the legacy of apartheid as well as crony-based BEE, which merely continues the legacy of apartheid by excluding the majority of disadvantaged South Africans.
- We need to start by asking what the REAL barriers are to black advancement in the economy.
- Anything that prevents job creating economic growth is a barrier to black advancement in the economy.
- Anything that prevents first-time job seekers getting jobs is a barrier to black advancement in the economy.
- Anything that undermines education and training, and that misaligns this with the needs of the economy, undermines black advancement.
- Once the requirements of growth, jobs, education, training and alignment with the economy are met, it will create opportunity on a grand scale. This will primarily advantage black South Africans and do more for BEE than any initiatives undertaken by the ANC thus far.
- Within this context we need to incentivise business to ensure opportunities, training and promotion for disadvantaged South Africans.
This is neatly summarised by the slogan we had 50 feet high on billboards in Gauteng: “We support BEE that creates jobs, not billionaires.” This position has not changed and will not change.
The issue has come to a head in recent months as we apply these principles to two Bills before parliament.
- The Broad-Based Black Economic Empowerment Amendment Bill, which deals with patterns of ownership and incentives to increase participation in the economy.
- The Employment Equity Amendment Bill which deals with demographic diversity in the workplace.
A key difference is that the BBBEE Amendment Bill generally creates a context of incentives while the EEA Bill largely creates a context of coercion. This distinction is a critical difference when it comes to evaluating their likely impacts.
When we evaluated the Broad-based Black Economic Empowerment Bill it embodied many of the principles we believe in. However there was one crucial stumbling block. As drafted, the Bill had race-based definition of “disadvantage”. Although “race” is still often synonymous with “disadvantage” this is changing rapidly. Race classification is thus becoming increasingly problematic as a reliable determinant of which South Africans are disadvantaged, and which are not.
Our representatives on the Trade and Industry Portfolio Committee, Dr Wilmot James and Geordin Hill-Lewis, met Minister Rob Davies to raise our concerns. After receiving assurances that the Minister intended to embrace genuine broad-based empowerment (in line with the National Development Plan) we decided to support the Bill. As enabling legislation, it is largely compatible with our principles. The Bill passed in the National Assembly with our support on the 20th June 2013.
Then, on October 11, Minister Davies released the final Codes of Good Practice which, despite his earlier assurances, entrenches narrow, race-based crony enrichment. The most egregious clause is the one that enables the “re-empowerment” of individuals until they have benefited from share transfer schemes up to a value of R50-million. The previous threshold was R20-million. The cynical intention of the Codes is to enable the politically connected to become even wealthier, through equity transfers, at the cost of broad-based empowerment. This totally contradicts the stated intention of the Bill, and does not comply with the DA’s principles.
So, when it came up for debate in the National Council of Provinces, the DA took a stand against the Bill. In other words: we supported the Bill in the Assembly when it offered the potential to introduce incentives for genuine broad-based empowerment. We opposed it in the NCOP when it had become clear that the (subsequently issued) Ministerial Codes would simply use the Bill as a fig-leaf to disguise more race-based crony enrichment.
There is nothing contradictory about this position. We took the correct positions on the basis of the evidence available to us at each stage, within the framework of principled criteria. As John Maynard Keynes once famously said: “When the circumstances change, I change my position. What do you do?”
Now to the Employment Equity Act. Here we dropped the ball. From its inception, this Bill completely contradicted the framework set out above. Not only is it based on racial coercion, it will undermine growth, reduce jobs, drive away investment and work against black empowerment. It will be subject to political manipulation, and undermine our chances of building the “capable state” which the National Development Plan identifies as a top priority.
So, how did the DA come to vote for it in the National Assembly? Good question.
The best way I can answer this is by reference to Malcolm Gladwell’s fascinating analysis of plane crashes in his book Outliers (p183 – 185). Gladwell’s purpose is to show the importance of communication and teamwork (or the lack thereof) and the accumulated significance of independently irrelevant, small mistakes, that combine to create disaster.
Plane crashes rarely happen in real life the same way they happen in the movies. Some engine part does not explode in a fiery bang. The rudder doesn’t suddenly snap under the force of take-off. The captain doesn’t gasp as he’s thrown back against his seat……
Plane crashes are much more likely to be the result of an accumulation of minor difficulties and seemingly trivial malfunctions.
In a typical crash, for example, the weather is poor — not terrible, necessarily, but bad enough that the pilot feels a little bit more stressed than usual. In an overwhelming number of crashes, the plane is behind schedule, so the pilots are hurrying. In 52 percent of crashes, the pilot at the time of the accident has been awake for twelve hours or more, meaning that he is tired and not thinking sharply. And 44 percent of the time, the two pilots have never flown together before, so they’re not comfortable with each other.
Then the errors start — and it’s not just one error. The typical accident involves seven consecutive human errors……
These seven errors, furthermore, are rarely problems of knowledge or flying skill. It’s not that the pilot has to negotiate some critical technical maneuver and fails. The kinds of errors that cause plane crashes are invariably errors of teamwork and communication. One pilot knows something important and somehow doesn’t tell the other pilot. One pilot does something wrong, and the other pilot doesn’t catch the error. A tricky situation needs to be resolved through a complex series of steps — and somehow the pilots fail to coordinate and miss one of them.
That applies, with eerie accuracy, to what happened in the process leading up to the NA vote on the EEA Bill. Our representatives on the portfolio committee were inadequately prepared. The many and varied submissions on the Bill were rushed through the portfolio committee in four meetings. The long parliamentary recess intervened before the Bill went to the National Assembly and so we were unable to debate the implications of the Bill adequately in caucus; when it did come before caucus, on the day it was due to be debated and voted on in the house, the explanatory memorandum produced by our spokespeople was defective. To make matters worse, we had five minutes (literally) to consider seven different Bills.
A number of sequential errors. On their own, none would have led to a crash. In a cumulative sequence, they did.
I, as the captain of this plane, must take responsibility. And I do. I believe it is best to acknowledge mistakes and seek to rectify them.
My colleague, DA Parliamentary Leader Lindiwe Mazibuko, has also acknowledged the deficiencies in the caucus management system that allowed for these errors to slip through and compound themselves. She and the Parliamentary leadership have proposed far reaching changes to the way Bills are “triaged” and managed from their inception through to their discussion in caucus.
That is why we will propose amendments to the Employment Equity Act Amendment Bill in the NCOP and vote against the Bill if we do not succeed in effecting these changes. We will then also vote against the Bill when it returns to the National Assembly. We should have done this from the get-go because this Bill will harm rather than promote redress.
Of course, our opponents will seek to use this to their own ends. Some of them will say we have abandoned our non-racial principles. Others will say we have abandoned our commitment to redress. Neither is true. Both these commitments are compatible and mutually reinforcing. The framework at the start of this newsletter demonstrates how we reconcile these commitments.
Our position remains exactly as described in this framework. We will analyse every empowerment initiative on a case-by-case basis, by asking the question: does this broaden opportunity for disadvantaged people? Or does it seek to manipulate outcomes for the politically connected? If it broadens opportunity, we support it. If it is used to camouflage yet another enrichment scheme for cronies, we reject it.
Sadly the ANC will pass the Bill into law anyway. But that is no excuse for the DA’s deficient handling of it at its inception.