ANC changes to ‘Pepuda’ act might have curious effect of making BEE illegal – John Endres

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Black Economic Empowerment – more commonly known as BEE – was introduced to South Africa in the mid-2000’s, with the intention of redressing years of inequality brought on by the oppressive apartheid regime. Since its implementation, myriad South Africans have been vocal about the fact that it hasn’t worked. In an article published on BizNews, Telkom CEO Sipho Maseko spoke about how BEE can actually be harmful to local businesses (read here). Maseko notes just how easy it is to get around loopholes, that end up harming local businesses and the economy. Below, the IRR’s Chief of Staff John Endres writes about changes to the Promotion of Equality and Prevention of Unfair Discrimination Act (also known as Pepuda). Interestingly, changes to the bill may have the effect of making race-based policies and BEE illegal. “The amendment would thereby eliminate the possibility of introducing differential measures focused on advancing certain groups relative to others – including those addressing race,” writes Endres. – Jarryd Neves

ANC seeks to make BEE illegal

By John Endres*

The ANC government is updating the Promotion of Equality and Prevention of Unfair Discrimination Act, colloquially referred to as Pepuda. The changes the Department of Justice put forward in a Bill for this purpose are far-reaching and upon occasion puzzling.

As the IRR’s head of policy research, Dr Anthea Jeffery, pointed out in a recent submission to the Department, the Bill might have the curious effect of making Black Economic Empowerment and related race-based policies illegal.

The scope of the Pepuda Bill is extraordinarily broad. It proposes to prohibit not just unfair, intentional discrimination that is related to 18 listed criteria, but even discrimination which is fair or unintentional. Specifically, the Bill demands the “elimination” of all discrimination – irrespective of whether it is fair or unfair – as part of the general obligation to promote equality.

This means that Section 14 of the law as it currently stands, dealing with the “determination of fairness or unfairness”, would become irrelevant under the proposed amendments. In particular, the changes would render moot S14(1), which states that “it is not unfair discrimination to take measures designed to protect or advance persons or categories of persons disadvantaged by unfair discrimination”.

The amendment would thereby eliminate the possibility of introducing differential measures focused on advancing certain groups relative to others – including those addressing race. As Dr Jeffery writes, “Race-based black economic empowerment (BEE), employment equity, and preferential policies will no longer be treated as examples of ‘fair’ discrimination. Instead, all these policies will have to terminated in keeping with the general obligation to promote equality by ‘eliminating discrimination’.”

Encapsulates the contradictions

This unanticipated and presumably unintended outcome neatly encapsulates the contradictions inherent in the ANC’s policies. Whereas the aim of the policies is to create a society in which all differences are levelled in the pursuit of equality, achieving this monumentally ambitious feat of social engineering requires ever more extensive and intrusive discriminatory interventions. Such interventions are inevitably prejudicial to some groups and therefore need the cover of “fair” discrimination if they are to be legal. The ANC therefore needs to formulate a policy that promotes discrimination to prevent discrimination.

This complex endeavour creates curiosities like the Pepuda Bill, which run counter to long-standing ANC policy on race. As Dr Jeffery writes, “All these BEE policies will satisfy the new definition of ‘discrimination’ in the Bill because, whether intentionally or otherwise, they ‘withhold benefits from’, ‘cause prejudice to’ and ‘undermine the dignity of’ people outside the preferred groups. […] That all BEE policies will be in conflict with the Bill – which, in essence, is to trump all laws other than the Constitution – means that the private sector and civil society organisations will also be barred from implementing policies of this kind.”

Fair and unfair

It may be that the Department of Justice made a drafting error in demanding that all discrimination be eliminated, rather than only unfair discrimination. But it is consistent with the intention expressed in other parts of the Bill, and the omission of the distinction between fair and unfair discrimination may therefore have been intentional. If it is, and the Bill proceeds as formulated, we at the IRR look forward to all race-based legislation being scrapped, as we have been calling for.

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  • John Endres is the Chief of Staff of the Institute of Race Relations (IRR). In this role, he supports the Institute’s management in all tasks operational and organisational. He holds a doctorate in commerce and economics from one of Germany’s leading business schools, the Otto Beisheim School of Management, as well as a Master’s in Translation Studies from the University of the Witwatersrand. John has extensive work experience in the retail and services industries as well as the non-profit sector, having previously worked for the liberal Friedrich Naumann Foundation and as founding CEO of Good Governance Africa, an advocacy organisation.

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