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LABOUR LEGISLATION OP-ED: What lies behind the extra-legal manipulations of the Employment Equity Act?

By Jeff Rudin | Daily Maverick | 06 Nov 2022 

(Image: iStock)

The last laugh resides with the black bourgeoisie, along with other ambitious and would-be upwardly mobile and mostly African people. They have turned the racism that once imprisoned them into a most effective weapon against their erstwhile racist imprisoners.

Is the Employment Equity Act (EEA) the failure most people think it is? Heather Robertson, DM168’s Editor, thinks so. Solid statistics – what she calls “grim racial facts” – seemingly support her anxiety.

She writes: “The data show that despite the Employment Equity Act signed in 1998, whites hold a greater proportion of senior management positions … than their black African counterparts. For only 17% of the 81% black African population to have the skills, experience and knowledge to reach senior management positions and lead companies, is just plain nuts. Equally nutty is the converse, that the minority 7.7% of the population holds the key to 63.2% of the economic kingdom. Only in South Africa.”

As part of her passionate plea for further “thoughts about the need for economic redress and ideas to tackle it”, she refers us to “our astute Business Maverick writer Ray Mahlaka [who] has cut through the hysteria and explained the data… I urge as many of you as possible to read every word of Mahlaka’s balanced, fact-based journalism on an issue that could easily plunge us into the emotionally charged morass of racial polarisation that will further divide us”.

What the EEA actually says

Ray Mahlaka does indeed use the facts from the authoritative Employment Equity Commission’s (EEC’s) latest annual report. These reports, according to Mahlaka, track compliance with the EEA. But he is mistaken. Rather than monitoring compliance, the commission, without any parliamentary authority, has rewritten the EEA’s most fundamental definitions and ignored another key provision of the EEA.

Exacerbating the puzzlement of this being no sleight of hand, the Labour Department, which is responsible for the EEA, knows this; the government knows this; Parliament knows this.

The racial polarisation Robertson fears is precisely the intended outcome of the deception, as I shall show. Rather than being a plot by dark forces, it is all carried out in plain sight by otherwise respectable people committed to the noble national goal of transformation.

Heather Robertson correctly notes that the demeaned, racial categories of apartheid – African, Indian, coloured – were invented for the benefit of white people. Somewhat surprising therefore is that she doesn’t ask why these reviled constructions are still omnipresent in all statistics 28 years after the birth of the new, post-apartheid South Africa.

Perhaps because the racialisation of (virtually) everything is today no different from the worst days of apartheid, she didn’t see the need to look up the actual EEA.

Had she done so, she would have seen that the only time African, coloured, and Indian occur in the act is to dismiss them. Instead of the apartheid “races”, she would have seen that a generic definition of black people is used. She would have similarly seen that the now standard categories of white male, along with Indian, coloured, African, and white females are nowhere to be found in the EEA.

Remaining virtually unknown to most South Africans is that these crucial definitions were adopted only after heated and prolonged parliamentary debates. In the face of demands from other parliamentary parties, as well as within its own parliamentary ranks for the separation of the “races” oppressed by apartheid and the hierarchy of subjugation between them, the ANC insisted on the generic definition of black people and women. (I was the ANC’s Parliamentary Labour Researcher at the time and witnessed all that happened.)

Mahlaka refers us to the Broad-Based Black Economic Empowerment Act of 2013 as another law involving affirmative action. This act uses the EEA’s definition of black. While apartheid “races” continue to dominate our statistics, amendments to the BEE Act, like the many ones to the EEA itself – including its most recent one of 2021 – all retain the unchanged original definitions of 1998.

This leaves no doubt that the legal drafters, along with the Labour Department, the EEC, the Cabinet and Parliament were all aware that the repeated use of the apartheid categories have no basis in law. How is one to explain this extraordinary sleight of hand?

The fundamental shift in ANC policy

My answer requires, in the first instance, recognising the singular shift in ANC policy signalled by the EEA and BEE.

There are two broad approaches to affirmative action and economic empowerment, the collective or individual approaches. ANC policy reflected the struggle between the two within the ANC itself. The Reconstruction and Development Programme (RDP) was the collective one, which formed an essential part of the ANC’s 1994 election campaign. The 1996 policy of GEAR (Growth, Employment and Redistribution) effectively replaced the RDP. This GEAR shift to individualism is best captured by Smuts Ngonyama’s, “I didn’t join the Struggle to be poor.”

How did this victory by the individualist approach end up with the apartheid categories rejected by the EEA and BEE?

The African majority within the black elite are eager to cash in on having been at the top of the apartheid-suffering index. Aiding them in this endeavour is the frequently expressed idea that they are the majority in a South Africa that is theirs. The Black Business Council (BBC), for instance, expressed these sentiments in its recent attack on the Eskom Board member and former MTN CEO, Mteto Nyati, for his claim that South Africa’s empowerment requirements were hindering Eskom’s recovery.

The specifically African members of the black elite are vocal about measuring employment equity against Africans being 81% of the population, and their consequent expectation of forming 81% of all measures of wealth and success. Apartheid-era injustice gives justice to their demands. White guilt ensures white compliance.

The oppression/exploitation/suffering of “blacks in general and Africans in particular” is a refrain with a very long history. From the beginning, the EEC incorporated this thinking in the forms it issued, supposedly in discharging its duty to monitor the progress of employment equity.

That it got away with its unlawful deception is part of the history of the ANC’s struggle to come to terms with the contradiction between its commitment to a collectivist black people and its practice of privileging principally individuals deemed to be African.

Race-enabled coping with guilt

In 1999, a year after Parliament approved the EEA, Thabo Mbeki urged members of the Black Management Forum (BMF) to overcome their guilt about being rich. The wealth of the new or aspirant “black bourgeoisie” (his term) was already creating inequalities among black people disquietingly reminiscent of the (then still fresh in mind) racialised apartheid inequalities.

Acknowledging that this “frightens and embarrasses” the new black rich, he urged them to see instead that the “struggle against racism … must include the objective of creating a black bourgeoisie”.

The BMF were quick learners. By March 2010, they were ready to defend themselves from accusations of being rich. (The current, annual corporate membership fee of R115,000 is a measure of who the BMF represent.) Apart from the relevance of the BMF’s defence, looking back from the vantage of nearly 13 years ago provides a fascinating glimpse into our recent history. Responding to calls for lifestyle audits from Cosatu, the ANC’s trade union Alliance partner, a very angry BMF via its then vice-president Tembakazi Mnyaka dismissed the calls as a “smokescreen” masking “racist narratives”.

“Instead of objectively raising issues in the national … interest, the tendency has been to portray black wealth as something to be regarded with suspicion. … The purveyors of this narrative seek to silence the emerging black economic elite … by the now-exposed banner that says: blacks cannot be wealthy.”

Those supporting calls for lifestyle audits “manipulate” and “de-historicise” the context. 

She continued:

“We are made to question whether apartheid and its attendant policies that dehumanised blacks and created the most unequal society in the world really happened; and if the conclusion is that it did, we are made to feel guilty about correcting its wrongs. To mask the continued unjust economic relations… statistics are thrown by organisations such as Solidarity, which claims that blacks own 23% of the JSE wealth. Such number throwing does not say anything about how the elite and middle class remain the preserve of white compatriots. His/her whiteness is enough to justify wealth and status and is enough to refute any suspicion of wrongful doing in wealth accumulation. Blacks should not be made to feel ashamed of legitimately acquired wealth or sorry for doing business with the government.”

Mnyaka went on to become the chair of the board of roads agency Sanral until her sudden resignation in 2014. Whether this was because she falsified her qualifications, or because she was Sanral chair at a time of public anger over the Gauteng e-toll fees, was a matter of controversy according to News24.

The Mail & Guardian article on the BMF statement quoted above also reported on the early travails of the then Gauteng Premier, Nomvula Mokonyane, who went on to become a Cabinet Minister in both the Zuma and Ramaphosa governments. “Why are you choosing me?”, she wanted to know from the journalist. “I believe you guys are being too hard on politicians.” The Zondo Commission has now recommended that she be investigated and prosecuted for corruption.

Fingering whites, however, turned out to be far more potent than blaming the media.

Turning racial capitalism on its head

I have argued in previous Daily Maverick articles that the most apt two-word analysis of South Africa for the period covering the discovery of diamonds and gold in the latter half of the 19th century and extending into the years that have now become known as apartheid, is racial capitalism. Capitalists, needing to justify their brutal exploitation of African workers, found the ideal answer in the racism that denied Africans their very humanity. It did even more. It allowed the construction of an entire society based explicitly on White supremacy (hence my use of capitalised White) and black backwardness.

The last laugh, however, currently resides with the black bourgeoisie, along with other ambitious and would-be upwardly mobile and mostly African people. They have turned the racism that once imprisoned them into a most effective weapon against their erstwhile racist imprisoners.

Doing so, and, more importantly, sustaining the inversion, requires – besides racism – a constant reminder of white selfishness and greed.

As we have seen, it took some time for the realisation of Thabo Mbeki’s invitation to the black bourgeoisie to see their riches as the success of the noble fight against racism.

As Tembakazi Mnyaka alerted us, “Whiteness” was to become much more than just being “enough to justify wealth and status”; it became the necessary antagonistic Other. Along with being the malevolent opponent, the South African form of the inequality capitalism produces and reproduces everywhere, is most conveniently dominated by a white elite with the mass of Africans at the bottom. It is there for everyone to see in all its starkness.

Moreover, thanks to the EEA, this perception has the scientific backing of the statistics annually produced by the EEC.

In short, we are seemingly confronted by the overwhelming evidence of the failure of transformation.

Heather Robertson repeats this perception, with her use of “nutty” to describe the privileges whites continue enjoying. While I attribute the reproduction of inequality at both the top and bottom of all societies to the natural dynamics of capitalism – contrary to her “Only in South Africa” – she chooses to do so in terms of generational poverty.

What she seems to forget, however, is that this poverty has a flip side: generational wealth. Rather than institutional racism, it is this generationally reproduced and reproducing advantage that (fundamentally) keeps most whites on top. To this generational outcome, I would add the fact that no privileged group anywhere has voluntarily given up their advantages.

Rather than being uniquely South African, this, again, is a natural feature of all class societies worldwide. In the words of Britain’s 258-page report by its Commission on Race and Ethnic Disparities:

“The evidence shows that geography, family influence, socioeconomic background, culture and religion have more significant impact on life chances than the existence of racism.”  

Locked as we still are into the racialised thinking of apartheid, it is easy to fear, as Ray Mahlaka, like Robertson, does, “another 24 years of no-to-slow transformation”. For him, this means: “The painful legacy of apartheid will keep thriving.” Yet, although not easy to accept, this, as already intimated, is the very intention of the extra-legal manipulation of the EEA, with its resuscitation of apartheid’s racial categories.

Let it be recalled that even if the EEA’s focus were to be on generically black people, as prescribed in law, it would still be only an elite of individuals, rather than the black collective. Stephen Grootes’ belief that “the vast majority benefit from BEE” is misplaced (on SAfm, Sunrise, 3 November 2022).

“Black empowerment” – like the oft-recognised need for “inclusive growth” – is a cynical manipulation of language, designed to cover the reality of empowerment limited to a select few. Gear was our government’s public endorsement of policies that have successfully increased inequality worldwide. The mark of success for even this unmanipulated EEA is still the privileging of only this generically black elite by the inequalities of the economic and occupational hierarchy we take as normal. “Diversity” is the respectable cover for prevailing – and worsening – inequality.

Another manipulation of the EEA is required for the further entrenchment of inequality.

The burial of the EEA’s provisions limiting income differentials

The black elite has well used white wealth as a benchmark for their own success. The maintenance of the huge income gap between most workers and the wealth of both the black and white rich is made possible only because of the further complicity of the EEC, the Department of Labour, the government and Parliament as a whole.

It is now almost forgotten that the then Minister of Labour, Tito Mboweni, threatened to withdraw the entire Employment Equity Bill if Cosatu persisted with its demand for a section reducing what was then still called the notorious apartheid wage gap between bosses and workers. (As previously indicated, I witnessed this whole event.)

A compromise was finally reached: Cosatu accepted a pale version of its original demand. This became – and remains – the largely unknown Income Differentials S27 of the EEA.Unknown because its various provisions have, in effect, been ignored since 1998. The employment equity of the new South Africa is no more than the opening to the black elite of the wealth previously monopolised by the white elite. Statutes reducing income differentials were an inconvenience to be ignored. The effective extra-legal burial of S27 has been made all the easier by Cosatu’s convenient collusion.  

Transformation as a Success

The evidence of the failure of transformation can be differently interpreted. It all depends on what – or, more precisely, who – is being measured. Is it transformation or transference?

If it’s the former, that is, a fundamental economy change for the benefit of the mass of the population, then it is a disaster. If, however, it’s an (enforced) sharing of some wealth by the established wealthy, that is, transference of some wealth to an elite among the previously apartheid-disadvantaged, then, thanks to the doctored EEA, it is an undoubted success. The hundreds, if not thousands, of billions of rand cumulatively spent on affirmative action and BEE has succeeded in making us, reportedly, the most unequal society in the world.

The statistics attracting the most attention in South Africa, however, are those between Africans and whites. This is to say, the manipulated ones of official statistics, rather than the galloping inequality within the African population. It is, of course, the success of the deceptions of EEA that keep intra-African inequality in the darkest of shadows.

The essential alliance between the multiracial rich

Virtually unknown today – although still within living memory – was the unabated civil war between English and Afrikaner whites until, at least, the 1976 Soweto Uprising. These mutually hostile groups put aside their differences as the Struggle against White supremacy intensified. White unity became paramount. Something similar – despite the ironic differences – is happening in South Africa post-1994.

The outraged reaction to the previously mentioned comments by Eskom’s Board member, Mteto Nyati, are singularly telling here: not only the outrage (additionally here and here) but the silence from those expected to defend a relatively minor consequence of Nyati’s wish to limit some of the societal devastations being wrought by Eskom.

Transformation has enjoyed privileged protection by, uniquely, being exempt from the direct ravages of austerity. Eskom’s continuous blackouts, along with electricity’s ever-increasing unaffordability, impact the economy and society at a cost almost certainly higher than any other single austerity measure.

Yet the noise against this minor effect on transformation suffices to silence the government and the higher echelons of the black rich. (The Black Business Council evidently caters for the less affluent, as its membership fee is only between R30,000 to R100,000, depending on the number of members within each joining organisation.) The silence of so-called White Monopoly Capital has been particularly loud.

How are these various silences to be explained other than by the chain locking the government and the richest of black individuals to White Monopoly Capital – the racialised Other of contemporary racial capitalism – for their collective wellbeing?

Suiting all the rich, regardless of colour, is the fixed focus on racialised poverty and the allegedly still apartheid-derived injustice suffered by the black rich. It isn’t all that long ago that many among the poor, including powerful trade unions, with Cyril Ramaphosa among their leaders, understood inequality not in terms of colour, but as a consequence of capitalism.

It is the possible return of this nightmare that naturally unites the rich in a powerful non-racial alliance. Racialised distractions from capitalism are cheap at the price. DM

*This Opinion Piece was first published by the Daily Maverick

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