Cosatu says debate on B-BBEE is needed for beneciaries' benefit
The debate about the broad-based black economic empowerment (B-BBEE) is needed on how to ensure it benefits the beneficiaries.
This is according to union federation Cosatu spokesperson Matthew Parks, who was reacting to the ongoing debate on whether the B-BBEE policy is aimed at being biased against whites.
Inequality persists
'While we support the B-BBEE Act, we believe a debate is needed on how to make sure it reaches its intended beneficiaries, in particular historically disadvantaged individuals and communities,' he said.
'We support the objectives of B-BBEE. These are necessary given three and a half centuries of systematic discrimination and disempowerment under colonial and apartheid rule. South Africa is 31 years into democracy but remains the world's most unequal society.'
Parks said the policy was a necessity to help historically disadvantaged persons and communities to enter the economy, not only as wage earners but also as owners of businesses.
He said Cosatu cannot remain satisfied with progress when the colour of one's skin still largely determines one's economic status.
ALSO READ: Minister extends date for comments on R100 billion transformation fund
'Ticking time bomb'
He added the majority of shares on the Johannesburg Stock Exchange are owned by whites, similarly with regards to ownership patterns of businesses.
'This is a ticking time bomb that we must address. It's not racism against whites and, in fact, white women and white South Africans with disabilities are included. White South Africans and investors are not excluded,' he said.
'All the policy seeks to do is to boost the economic empowerment of those still disadvantaged. It has helped to begin the journey of building a nonracial society. While some progress has been made in building a black middle class and black industrialists, it is not enough given the inequalities still so prevalent.'
Parks said more must be done to ensure 'it benefits workers and not just the elite and worker ownership and employee shareholder ownership programmes should be ramped up'.
He added more must be done to ensure investors honour their B-BBEE shareholders and equity equivalents.
Equity equivalents offer alternative for foreign investors
When asked if Cosatu supports the equity equivalents, Parks agreed and said that has been one of two options under the B-BBEE Act for many years.
He said they provide a useful option for international investors who are not able to do the B-BBEE shareholders' option.
ALSO READ: DA transformation policies stance dents its image and may lose it votes, says expert
'Equity equivalent option allows investors to support local manufacturers, create jobs, skill workers or invest in local communities,' he said.
'These have benefited many local businesses, workers and communities. They have been successful in many sectors, including clothing and motor manufacturing. Many companies have utilised this option before.'
Malatsi's draft policy
Communications and Digital Technologies Minister Solly Malatsi was recently criticised for unveiling a draft policy direction in the Government Gazette 'proposing an alternative to the B-BBEE ownership requirements for the ICT [Information and Communication Technology] sector'.
'The new model would allow companies to meet empowerment obligations through equity equivalent programmes rather than direct ownership transfers,' one critic said.
The proposed amendment to the Act could facilitate the entry of investors such as Elon Musk's Starlink into South Africa's telecommunications market and contribute to the empowerment of the previously disadvantaged people without having done a direct transfer of ownership.
Malatsi's critics said he was trying to pave a way for Starlink to do business in SA. Musk has previously criticised the B-BBEE policy, saying it was racist.
NOW READ: Proposed Starlink deal 'wrong in principle and practice'
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