March 12, 2004

Cosatu clashes with black economic empowerment firms

The Congress of South African Trade Unions (Cosatu) is on a collision course with empowerment companies, which, it says, do little to advance workers' interests or real broad-based black economic empowerment (BEE). Two deals announced within the past month in the Western Cape have sparked Cosatu's ire: the proposed sale of Cape Town's Golden Arrow Bus Service (GABS) to Hosken Consolidated Investments, a union investment company, and a 25,1% proposed acquisition of KWV by an equity consortium headed by Gavin Pieterse, the chairperson of the South African Wine Industry Trust (Sawit). At the heart of the dispute, explains Cosatu Western Cape chairperson Tony Ehrenreich, is that both deals will benefit only a few. "Does it mean we will make a few more black millionaires? Workers must take a stand. We want to make sure economic empowerment is as broad-based as possible." A third dispute, the countrywide strike of baggage handlers against a black-owned company - now entering its 13th week - has also hardened union attitudes towards BEE companies they see as failing in their responsibilities towards workers.

BEE has undergone a shift in focus from ownership acquisitions to employment equity and skills development - benefits that would trickle down to employees - explains Vuyo Jack, a director of Empowerdex, an independent economic empowerment rating and research agency. "That is the dynamic that the government is expecting and promoting," he says, "It's difficult for some companies to accept and to grapple with it. It goes to the heart of transformation." What concerned him, he said, was that the large part of BEE partners are not driving empowerment and internal transformation in companies. "One would expect the BEE shareholders to adopt a far more vigorous approach to social responsibility."

The BEE partners are Arise in the Western Cape, Ubambo Investment Holdings in Gauteng, Univest Ltd in Durban, PWL Investments in KwaZulu-Natal, Philelana Holdings in Gauteng and Khulile Investments in the Eastern Cape. Cosatu and Satawu say it is now time for the BEE partners to use their influence on Equity's management, which is overriding labour legislation like "brute and ruthless [profiteers]", says the general secretary of the transport union, Randall Howard. (The Mail & Guardian, Johannesburg)


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