Crusader takes on the crony capitalists
Herman Mashaba believes the government’s labour legislation is the biggest obstacle to entrepreneurship, which is why he is challenging it in the highest court
HERMAN Mashaba says the failure of business leaders to speak out against the government’s destructive labour policies is an endorsement of crony capitalism.
“They’re happy to complain in private from the sidelines, in boardrooms and at dinner parties, but they’re not prepared to come out openly,” says Mashaba.
This is not something he can be accused of. This week, he announced that he would be proceeding with his challenge of the constitutional validity of section 32 of the Labour Relations Act. He launched his court action in March, but says it has been sabotaged by the delaying tactics of the Congress of South African Trade Unions.
Cosatu applied to become a party to the action, but it has consistently failed to file its answering affidavit, thus stalling the process.
Mashaba says he has had enough. The Free Market Foundation, which he chairs, has withdrawn its consent for Cosatu to be a party to the action and will now proceed with the case.
“Our country faces a crisis. We cannot allow the urgency of the matter to be sabotaged by delays.”
Mashaba, 54, is one of the most inspiring examples of entrepreneurship in South Africa.
He was raised in a small village, Ga-Ramotse in Hammanskraal, north of Pretoria, began selling crockery in the townships and then hair products from the boot of a car. This led to the start of his hair products company, Black Like Me, which became a successful multinational and made him millions.
He did it in the face of a battery of restrictive apartheid laws, relying on nothing but extraordinary energy, initiative, self-belief and chutzpah.
He has been an outspoken and uncompromising champion of the free market in the new South Africa. His great strength is that he is beholden to no political party or politician. He believes the opposite is true of too many business leaders in South Africa.
This is their great weakness, and the whole country is suffering because of it.
They keep quiet because they are terrified of losing their political connections, fearing that if they lose them, they will lose government business, he says.
In effect, this means that crony capitalism rules — and crony capitalism is a devastating threat to democracy in South Africa, he believes.
“We have to guard this country against crony capitalism. If people are going to do business on the basis of political connectivity, then it is the beginning of the end for this country.
“They must speak out if they want to protect democracy. We need active citizenship and we are not seeing this from the business community at the moment.”
Mashaba believes that the greatest obstacle to entrepreneurship is the government’s labour legislation. He sees this as the biggest threat to South Africa’s future, because he believes that entrepreneurship and the creation of hundreds of thousands of small businesses is the only way that the country will create jobs and alleviate poverty.
“Draconian labour legislation has destroyed entrepreneurship in this country.”
Our country faces a crisis. We cannot allow the urgency of the matter to be sabotaged by delays
He has singled out section 32 of the Labour Relations Act as particularly iniquitous because it enforces the extension of agreements reached in bargaining councils to third parties. Bargaining councils are dominated by the bigger trade unions and businesses. Imposing minimum wages on smaller businesses is a form of collusion, anti-competitive and ultimately deprives people of the right to work, he says.
Mashaba has gone to court because he believes the law is unconstitutional. He wants it amended so that the extension of bargaining council agreements to third parties does not happen automatically, but only after the minister has “applied her mind” and considered all the likely consequences.
Mashaba has been accused by the political lackey class of businessmen who hate him for rocking the boat with his big mouth. But he is not afraid to put his money where his mouth is.
He says he is funding the court challenge out of his own pocket.
“I have got to a stage in my life where I don’t want to say to my children one day that I did nothing to save this country. This is my contribution as a member of civil society. I worked for many years under apartheid to develop entrepreneurs in the townships. Ever since the new South Africa, I’ve looked at how these businesses have been destroyed — to a large extent by this draconian labour legislation.”
The supporters of collective bargaining say that third parties can apply for exemption from the agreements reached in the bargaining councils.
This is an expensive and timeconsuming process, says Mashaba. And, indeed, the Newcastle textile companies that won exemptions had to go to court to do so.
“Don’t tell me about exemptions. The majority of small businesses in this country cannot afford to go through the process. It costs money and it costs time to make this application. And why should they have to apply in the first place? Why should they be subjected to this form of collusion by big trade unions and companies?”
Mashaba may find himself up against an increasing reluctance by the courts to pronounce on policy issues for fear of being seen to encroach on what the government regards as its territory.
Should the courts be used to change government policy?
“The courts are there to ensure that the government respects the constitution of our country.
Fortunately, we live in a constitutional country, so I am using my constitutional rights to challenge aspects of the law that I am not happy with.
“Isn’t this why we fought for democracy — so that things should not be imposed on people without their consent? Isn’t this what our constitution is about? To enable us to be independent, free people, not having other people impose their will on us?”
One wonders how much support the Free Market Foundation enjoys in the black business community, more specifically for its opposition to the government’s labour legislation.
Mashaba says the foundation does not think in terms of black or white business. What matters is that too many business leaders are
I don’t want to say to my children one day that I did nothing to save this country
scared to raise issues they are not happy with.
“I know that they are not happy with the labour legislation, but they’re more interested in being politically correct than raising it. Being politically correct means engaging in a manner that pleases the government and not consid- ering the implications of bad labour legislation for the whole country.”
He sounds angry, but says he is actually very positive about South Africa and does not agree with those who say we are about to become a failed state.
“We are still very far from being a failed state. We’ll become a failed state if people don’t exercise their democratic rights. We need to engage to make sure our democracy succeeds.
“People claim not to understand why the foundation is asking the Constitutional Court to make a determination on this matter. This is why.”