DA stum­bled over em­ploy­ment bill

We made a mis­take in sup­port­ing the Em­ploy­ment Eq­uity Bill, but we can and will rec­tify it dur­ing the re­main­ing pas­sage of this bill, writes He­len Zille

Weekend Argus (Saturday Edition) - - ISSUES -

THE DE­BATE in the me­dia over the past 10 days has re­vealed the depth of con­fu­sion re­gard­ing the DA’s po­si­tion on af­fir­ma­tive ac­tion. I take re­spon­si­bil­ity for this. The pur­pose of this newslet­ter is to make our po­si­tion un­am­bigu­ously clear.

In a mem­o­ran­dum to the par­lia­men­tary lead­er­ship in May, I set out the prin­ci­ples that guide our ap­proach to black eco­nomic em­pow­er­ment and em­ploy­ment eq­uity and asked our par­lia­men­tary cau­cus to use them as the ba­sis for judg­ment on these bills.

These prin­ci­ples are not new. In­deed, they have been our guid­ing prin­ci­ples on BEE for two decades. And they will con­tinue to be:

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 crony­based 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 first­time 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 on 15m- high 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, and 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 Broad­based 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 race­based 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 Hil­lLewis, met Trade and In­dus­try 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 June 20 this year.

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 R20m.

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.

When it came up for de­bate in the Na­tional Coun­cil of Prov­inces (NCOP), 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 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.

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.

Glad­well’s pur­pose is to show the im­por­tance of com­mu­ni­ca­tion and team­work and the ac­cu­mu­lated sig­nif­i­cance of in­de­pen­dently ir­rel­e­vant, small mis­takes, that com­bine to cre­ate dis­as­ter.

He says: “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 take­off. 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 12 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 ma­noeu­vre 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 co-or­di­nate and miss one of them.”

That ap­plies, with eerie ac­cu­racy, to what hap­pened in the process lead­ing up to the Na­tional Assem­bly 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 start 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.

We can and will rec­tify it dur­ing the re­main­ing pas­sage of this bill.

We can­not sup­port an ap­proach that will cre­ate more un­em­ploy­ment and poverty and less em­pow­er­ment for those who gen­uinely need it.

His­tory would be damn­ing in its judge­ment if we did.

● Zille is leader of the DA


TAK­ING THE BLAME: DA par­lia­men­tary leader Lindiwe Maz­ibuko and leader of the DA He­len Zille have ac­knowl­edged de­fi­cien­cies in the cau­cus man­age­ment sys­tem that led to con­fu­sion over the party’s stand on black eco­nomic em­pow­er­ment and em­ploy­ment eq­uity.

‘AS­SUR­ANCES’: Rob Davies

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