A sizeable chunk of relief funds pledged by the National Empowerment Fund and Solidarity Fund – meant to revive businesses all but destroyed by the July riots in KZN and Gauteng – has been reserved for black business owners only. Public interest business organisation Sakeliga has filed a request under the Promotion of Access to Information Act (PAIA) to see a list “of all disbursements made, the terms of thereof, and the terms (if any) attached to donations by the Solidarity Fund”. The NEF wrote in a mid-July press statement that “the beneficiary enterprises had to be owned and managed by black entrepreneurs” in order to qualify for assistance. BizNews spoke to Piet le Roux, CEO of Sakeliga, about why they oppose such a move. – Michael Appel
CEO Piet le Roux on the National Empowerment Fund’s recent press release and the injustice of it
The National Empowerment Fund is limiting the assistance it is providing to businesses that suffered during the KZN riots on the basis of race. Now, this is not the first time that this has happened in South Africa. We think it is problematic for several reasons. One, because as soon as you reserve the assistance to such companies, you in effect penalise companies which do business across racial barriers. So if you reserve aid to companies and say that they need to be 100% black owned, 100% black managed, then you’re saying, well we are not going to assist those companies who have black employees or who are co-owned or co-managed or co-operated. So these types of subsidies and incentives actually detract from what you should just expect to be a normal process of inter-community business relationships in South Africa, so that detracts from normal business. And then secondly, the problem with the money that the National Empowerment Fund made available here is that a sizable portion of that, about a quarter, comes from the Solidarity Fund. And the Solidarity Fund was brought into being in 2020 in expectation and in the wake of the early lockdowns and the presence of COVID-19. But I am quite certain that the money donated to the Solidarity Fund was never intended to be distributed on the basis of race. It was to be distributed as emergency relief.
On being black and white co-owners in a business and still being penalised
The irony of policies like this, and what the National Empowerment Fund is now doing under the guise of other enabling legislation or regulations which have not yet been challenged, is that they are penalising inter-community cooperation at the ownership level, at the management level and at the employee level. And we must realize the implication of funding and giving subsidies to businesses. But restricting that to race means we’re penalising those that cross those boundaries. And I think that is harmful to normal business relationships and the direction you want an economy, and a country like South Africa, to go in.
On the constitutional court judgment against BEE earlier this year
One of the active pieces of litigation that we were active in earlier this year, actually for five years, but we received judgment in the Constitutional Court earlier this year, was in the procurement regulations that were brought into being five years ago under Minister Pravin Gordhan. And we were able to have them set aside because they were ultra vires not within his powers. But what that said, and what became practice in many state owned enterprises, municipalities and so on for the past five years, was to limit tenders in government to black only owned or black only managed companies.
Now, that’s not the end of BEE, it’s a government policy. And it comes in many guises, but it’s important to push back against BEE because it’s harmful to the end result, which is the flourishing of everybody in South Africa. It detracts from what are its ostensible goals.
On opposing Cabinet’s intention to impose BEE on the legal profession via the Legal Practice Council
The Legal Practice Council is a statutory body created a few years ago as a part of the reform of the legal profession in South Africa. And it now brings it under much stricter government control. The Legal Practice Council and the legal practice code that has now been announced by the government is an attempt to introduce BEE into the legal profession. Now, of course, when you say we oppose BEE, I must stress that we opposed the policy of black economic empowerment. Of course, we’re not against empowerment, but there are many ways to empower. And it is apt that legal professionals and anybody else in the country should seek the empowerment of the people they do business with and the profession and so on across many categories. And that could include race.
But in principle, introducing BEE into the legal profession detracts from the professional relationship that should exist between a client and his representative. And that relationship is very important – it cannot be dictated from external political considerations. And we cannot have the Minister say who should be someone’s legal representative based on race, or penalise somebody for choosing his client or his representative, among other things, based on race. We cannot allow that, it is unacceptable. And so Sakeliga has certainly sought to oppose that. In principle, we have to see what the actual draft regulations entail.
Read also:
- July riots a year on…nothing to report
- Ramaphosa on July unrest: We stared into the heart of darkness
- MAILBOX: SASRIA’s incompetence has hard-working SA citizens contemplating their future in our once-beautiful country
