Wanted: Business Leaders with Balls. The only hope if SA to retain cowardly capital.
Emboldened perhaps by straight talking from the heads of Woolworths and BMW, Business Leadership's Michael Spicer today added momentum to a more direct voice from organised business. For many years the diplomat, in this interview Spicer punched hard and hit the right notes when discussing the new BEE Codes and the failed "sweet-talking" approach. He frets, though that Big Business will take its usual line of least resistance and quietly move capital to friendlier geographies rather than engage in the required debate with misguided legislators. – AH
ALEC HOGG: With me in the studio is Michael Spicer, Vice President of Business Leadership South Africa. Perhaps we can just start with what Leon Louw was talking about a moment ago, that the Free Market Foundation is taking government to the Constitutional Court on the Labour Relations Act. Business Leadership has been outspoken on Labour Relations for a long time. Are you supporting Leon in his efforts?
MICHAEL SPICER: I think there are a number of individuals and companies who are, but not institutionally. Personally, I'm very much behind what Leon is doing and I think it is way past time. I think it's one of the key cornerstones of the challenges that face the country at the moment.
ALEC HOGG: With this high unemployment rate and 146th on Labour Relations in the world out of 146 countries surveyed (WEF Global Competitiveness Report) , it seems as though government has a blind spot.
MICHAEL SPICER: I think it's partly because there are so many interest lobbies who are not in that group of unemployed people. Those with power and influence are not the unemployed. I've always personally been quite critical of what I call classic corporatism, the Nedlac formula. Big business, big labour, and big government. Well, that excludes many people. It excludes small and medium enterprises, but it also excludes the unemployed.
ALEC HOGG: My initial reading of the BBBEE codes, which have now been released, suggests that we might be compounding the problem in that area.
MICHAEL SPICER: Undoubtedly, and I think again, it's another example of a powerful vested interest who have gone against government. (Trade & Industry Minister) Rob Davies certainly said the aim of the provision was to ensure that more people were empowered. What he's achieved is precisely the opposite.
ALEC HOGG: Not Broad-based Black Economic Empowerment. This seems to be narrow-based Black Economic Empowerment?
MICHAEL SPICER: Absolutely, so it's achieved exactly the opposite of the purpose of the revision to the codes.
ALEC HOGG: What are you guys going to do about that?
MICHAEL SPICER: Well, I think here you have an example of where businesses are split: clearly, those who benefit from this are not exactly going to go into the streets to fight that. I think that business here is an example of where many businesses will live with it, but others will pay the cost. Big businesses are very good at that and I'm critical of my constituency. It's not just on this issue. It's on other issues. What we do is we simply hire some more lawyers. We hire some more accountants. We tick off all the boxes, but it's the small and medium enterprises who really carry the burden, and of course, the unemployed because they aren't employed. The enterprises aren't formed, people don't expand, and they hire less people. They are the victims of all of this.
ALEC HOGG: The other problem for big business or what big business does, apart from hiring the lawyers and the accountants, is it invests it's capital outside of a country where it doesn't feel that welcome.
MICHAEL SPICER: Ja, it postpones expansion here. It says, "Let's wait and see. Let's wait and see for other regulations. Let's wait and see past the election, but in the meantime Africa is calling. Let's go and see if we can do some business there".
ALEC HOGG: So other parts of Africa are benefitting from the regulations laws in South Africa.
MICHAEL SPICER: Undoubtedly.
ALEC HOGG: Michael, what about his whole story of business leaders in South Africa starting to speak up at last? In the Mbeki era, Tony Trahar got boxed around the ears when he suggested that there might be another way, and since then business seems to have been very low profile – but it appears to be changing. Is it?
MICHAEL SPICER: Look, I think it's mixed. Again, from being there I've experienced all of this. Business should never make the mistake of wanting to be loved. It needs to be respected, and to be respected it has to articulate its interests in a way that don't seem self-serving but clearly point to why it is beneficial not just to business but to the nation as well. That certain things are done or not done and it has not always been very skilled about that. Often it says, "Let's just quietly go and talk to government, see if we can't achieve a cosy deal and maybe if we're very nice to them, they'll be nice to us". Well, it's not like that.
ALEC HOGG: The Zimbabwe Factor.
MICHAEL SPICER: Ja, so it's getting the right balance of being constructively engaged, but telling it like it is and, if necessary, telling it in public so that the broader South African community understand why the business has certain imperatives which require it to do certain things and that's not simply just to fatten its own pockets.
ALEC HOGG: Is that changing?
MICHAEL SPICER: I think that in places it's changing. It requires individuals to lead that. Institutionally I think there's still a lot of support for the quiet lobbying behind closed doors and inevitably, business is not unified. There are always differences, which you were talking about earlier. The chicken story classically; importers, exporters, and retailers have a different take on this. I was very interested in Shoprite's comments about this. Manufacturers, if you offer them a subsidy or if you allow them to take a subsidy, they'll take a subsidy.
ALEC HOGG: They'll grab it with both hands.
MICHAEL SPICER: It's human nature and it's not just in South Africa.
ALEC HOGG: I'm sure you were at the World Economic Forum in Cape Town a few years ago, when Trevor Manuel stood up and said, "Business is cowardly".
MICHAEL SPICER: Yes, I was chairing that session.
ALEC HOGG: So why, if you have a politician saying, "Make your voices thick, businesspeople, engage in the debate", why don't we?
MICHAEL SPICER: There are divisive interests. There is the racial factor. I think to be very blunt, White businesspeople feel that it's inopportune. They may be accused of being racist so they tend to be a little quieter than others are, and many Black business leaders are in the pocket of government because they're in these 'patronage relationships'.
ALEC HOGG: Reinforced by the latest BBBEE regulations.
MICHAEL SPICER: Reinforced, once again, by the latest regulations.
ALEC HOGG: How do we get out of this mess?
MICHAEL SPICER: I think it does require you to come back to your theme. Leaders who can talk in the national interest, who can escape just their narrow company interests and indicate why certain things have to be done or not done in the national interest, but also to allow business to carry on doing business and to increase doing business and for new firms to be formed.
ALEC HOGG: So Simon Susman from Woolworths who came out very strongly with his opinions, Sanlam's Johan van Zyl who supported him to a degree, more of those individuals need to come forward.
MICHAEL SPICER: Yes, and I think BMW, albeit late in the day, articulating very clearly what it needs, for it to invest here. Unfortunately, it was at the end of the day and the opportunity now is missed but I think a marker has been put down, which both the public and private sector ought to understand very clearly.