Manyi: ‘White-Owned’ business has betrayed Mandela’s reconciliation legacy

Mzwanele Manyi, President of Progressive Professionals Forum, tells Tim Modise that Affirmative Action policies should be revised to exclude white women, and Indian men and women, as they/re already empowered. He says both coloured and black women need to be prioritized. Manyi says government should be stricter in enforcing the Economic Empowerment codes especially in the mining sector. He says ‘White Owned’ businesses have betrayed the legacy of reconciliation preached by Nelson Mandela. – Tim Modise

Mzwanele Manyi thanks very much for joining us here on our Transformation slot. Results have come our recently, statistics from Statistics SA about Employment Equity and you are one of the people who are not impressed with them. You are actually, even calling for changes to the way Employment Equity is implemented in the country. Its Women’s month now, but you’re saying that White and Indian women should be taken off the beneficiaries of Employment Equity. Why?

Good morning Tim and your listeners. Firstly, understand that affirmative action is a corrective action and it’s governed by the Law Employment Equity Act of 1998, which seeks to achieve equitable representation. The view is that if you look at women, although women are at the top management, they are like 20 percent but even on that 20 percent of women at the top, 12.7 percent is White women. White women in the economic active appropriation: they are only 4.5 percent so it already means that White women at the top are doubly represented as it were. This has been a trend has been going on for many years – more than ten years, actually. It’s the same thing with Indians; not only female Indians but also all Indians have been overrepresented over the past ten years or so. I’m saying that the objectives of the Act have been realised. The objective was to achieve equitable representation.

In this case, we have not only achieved it. We’ve superseded it and therefore, the law has been successful in delivering empowerment to Indians as a whole, and White women in particular. Therefore, let’s now focus on the Africans and the Coloureds. I’m calling for un-designation of White women and Indians as a whole, to say ‘let them be out of the definition so that the focus can be on the Africans and the Coloureds’.

That is going to meet with resistance. It’s a racist approach to dealing with Employment Equity.

How can it be racist? All we are doing here is levelling the playing field. Affirmative action, by definition, can be a permanent feature. It’s good to be there, to correct. You have to know what it is that we’re aiming for, and what we’re aiming for is equitable representation. We have not only achieved it, but we’ve surpassed it. In fact, continuing this is actually, defeating the objectives of the law.

Practically speaking, how would this work then? If you take the allocation as it were, of the numbers to the White woman and Indian women, what do you do with that? Do you allocate it to Black African women?

No. What we do now is by prioritising Africans and Coloureds; it means that when you do the employment, the question that must be asked is… Say for instance that the GSE [inaudible 03:06] has had a very good discussion with the JSE where they said some of the requirements will ask the question ‘where are the women’. The question mustn’t say ‘where are the women’. The question must be ‘where are the African women? Where are the Coloured women?’ It must be granular and it must be specific. That’s the question, which must be asked. If they say ‘where are the women’, they’re just going to bring White women and they’re going to say ‘here are the women’. This is what I’m saying – that White women have met, and exceeded what the Act wanted them to achieve – the same as Indians have. Therefore, let’s move on and focus on African and Coloureds.

In the bigger scheme of Black Economic Empowerment, where does this fit in and what trends are you seeing emerging on that front?

The Black Empowerment in general, has not been as quick as one would have liked it to be. Transformation has been painfully slow, but again, I think we’ve been very unfair in terms of judging the results. Maybe we’re too optimistic. If one considers that the actual legislation came into effect in 2003 and the codes of BEE came into effect in 2007, there really hasn’t been enough time in the legislation terms to have measured how much progress has been made. Indeed, I think there’s big room for improvement.

In the mining sector – and mining is under pressure at the moment – there is a squabble going on about the enforcement of the Mining Charter. Some of the mining companies are saying that this matter needs to be taken to the courts for interpretation. Government is saying it cannot go along with this once-empowered approach. It would like it if, when partners exit these empowerment deals, that new partners be brought in.

I think that’s the correct position. Even in financial services, they have misguided concept of ‘once empowered, always empowered’. It’s really, fronting that because what that concept entails is that you buy your stake. Then we sell your stake as a Black company, but that company must maintain credentials as if you are still there. I think that’s really silly. I don’t know who came up with that in the first place. Indeed, I think it’s correct to get rid of that concept and when a Black Empowerment company is sold its stake, (which it has the right to do), we must find another Black player to take that stake. It can be complicated. There are more Black people in South African than any other, so there can’t be a situation where you say ‘now you have a shortage of Black people’.

Read also: Manyi: ‘White-Owned’ business has betrayed Mandela’s reconciliation legacy

What is your sense of the mood in the country? Do you think that private business is open to Black Economic Empowerment, given the different arguments that are put forward and the declining numbers of empowerment deals?

Well, the fundamental situation is that life is improving dramatically. Now there’s a tendency – partly because of the way news work or human mentality works – to say, ‘oh, it’s not peaceful everywhere’. Absolutely. These are awful things. We need to get these things solved but it isn’t a framework where people should be negative. They should think of the good things that have happened, and say, “How do we build on that?” I often look to innovation as the thing that will help us do better. Our climate change is a big problem but it’s one which, if you do the right types of R&D, you can actually avoid the ill effects. Development where you get buffer stocks of food and air conditioning… The middle-income countries really, aren’t going to suffer that much. It’s the low-income countries. As we reduce the emissions, knowing that there’ll be some heating, we have to improve farming productivity. We have to help out these poor countries because that’s where most of the suffering will take place.

Business will only do Black Empowerment if there is a business rationale. What that means is that as long as they cannot do it and still get business, they will not do it. That is why it’s going to be very critical for Government to ensure that the consequences for not doing BEE… It means that when Government issues license, it must check. It must tick all the boxes – whether the BEE has been done or not. If Government does not do that, then Government is taking our business rationale to do it. Business will not do it. It’s a grudge purpose. Business is not going to do this out of the goodness of their art. They’re only going to do it because it talked to the bottom line. Things like licensing, conditions to do business with) Government must be the ones to be tighten that. If we don’t tighten it, we’re going nowhere.

There are sectors that seems to be very slow when it comes to putting together empowerment deals together. I’m thinking of retail here (and I may be wrong) and it’s because that is not a regulated space and that’s why some of the big companies in that space have not done any substantial BEE deals. What’s your view?

The way the model is supposed to work is that even if you don’t do business with Government, you are not necessarily safe. You’re actually a liability because whoever does business with Government for instance, and does business with you as well… For all the Rands they’ve spent with you. If you’re not empowered it’s a liability (on the scorecard of those who want your business to count in the scorecard of the organisation). Therefore, you remain a liability. Beyond that being a liability on other companies, on retail, it’s going to be on the consumer. If the consumer is going to be very liberal about where their cash goes, then it’s a problem for the consumer. This is why one of the things for us and the people who’d be calling for (for instance) a consumer boycott; we need to identify all the companies that are not embracing BEE and all those companies must be boycotted. That is the only economic language, which they will ever understand.

The other BEE argument is that it seems to have benefitted the same old people over and over again, and that most of them are the politically connected.

I’ve heard that and I’ve always called it ‘a misguided understanding’ because whenever you talk about BEE people only – focus only on the one element, which is ownership – people need to understand that when you say broad based BEE, what does it mean. It means all the seven elements and now they’ve been condensed to five. If you look, all these elements have different audiences. You have the ownership element that talks to you investor type of people. You have the employment equity and management control, which talks to you employee type. By the way, Tim, it’s important for people to understand that not every Black person out there wants to be a businessperson. Therefore, you have career employees – people who just want to be executives or CEO’s, so there must be space for that. In fact, if you look the Black Diamond research by this company in Cape Town, you will find many Black kids have mushroomed in that space, so that’s another component.

The third component is the actual entrepreneur types – the people who would benefit from enterprise development and procurement and there’s a lot of space there. Many young people do not actually want to be employees. They actually want to run their businesses and that’s why you have those two elements dealing with it. Lastly, you have another element, called socioeconomic development. That element deals with the poorest of the poor. Indeed if you look at the full breadth of broad based BEE, it talks to a much wider score but when people criticize it, and they just take one element and rubbish the whole program. I think it’s an unscholarly way of dealing with broad based BEE.

The other argument raised is that given the country is in a tough economic situation now, all the talk of empower, BEE, employment equity etcetera, should take a back seat in favour of economic growth.

That is a very myopic argument. Firstly, just understand that if you say South Africa has 55-million people; if, of those 55-milion people, 50-million have no cash to spend, it’s almost as though all you have is five million economically active people. Things like broad based BEE ensure that you have a much broader mess of people who are involved in the economy. As soon as we have that, the multiply effect of that is just, massive. If you look right now (as a quick example), look at 10 of the companies in the Apartheid days. Look at ten of those companies today. Companies today…in fact, companies have benefitted a lot more since this Black Government came into power because with the ANC Government, we have had a lot more people involved in the economic landscape and companies have benefitted. Look at the turnovers. It’s really been going well. It’s myopic to cut people out. People must understand that the more people who are involved in the economic landscape…that is a business imperative.

Do you think that private business (White-owned business) have come to the party, given what the Black Government of the ANC has done over the past 21 years in trying to make sure that more and more South Africans participate meaningfully in the economy?

It’s a mixed bag. There are those that have been doing their best. There are those that have been doing their best to exploit the loopholes, so it’s really a mixed bag and it’s quite unfortunate. In fact, this is where I would argue that many White people have in fact, betrayed Mandela. I think Mandela was very nice and he tried to make sure that there’s reconciliation. He thought that we were going to live happily ever after (all of us) and many White businesspeople did not take that to heart. In fact, they’ve betrayed Mandela. Mandela would be very disappointed to know that the clinics have stopped being built, etcetera. I would really be calling upon them to say ‘reconciliation is a two-way process’. We could have had a blood bath in this country. We did not. Mandela made sure that we’d throw the spears and everything away so that we have a better country.

All that needs to happen now is that White businesspeople in Particular who have lots and many reserves, which they’re not using in the country. They’re not investing in the country. They must do so. They must show their faith in South Africa and stop taking money offshore.

What about the independence of Black people. Why should they seek economic empowerment from their White counterparts? What about Government helping emerging entrepreneurs to start their own businesses without necessarily having to resort to empowerment from white-owned companies?

It’s not either/or. It’s both. Firstly, we must understand that the GDP of this country – 70 percent is controlled by private companies so Government only controls 30 percent of the GDP. Government alone is not going to be able to empower everyone. It has to be a partnership. There must be something, which Government does or something the private sector does. It can’t be the one. In addition, it’s important to understand that even this more than R11trn stock exchange is not because people are alone. Black people have made their contribution so that we have this kind of wealth. Therefore, there must be a level of consciousness. There must be a level of remorse. There must be a level of saying ‘how are we ploughing back as corporate South Africa’, the kind of corporate South Africa sitting on the side and saying ‘Government, do it alone’. That would be very irresponsible.

Mzwanele Manyi. Thank you very much for talking to us.

Thank you very much, Tim.

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