Blacklist companies noncompliant with Employment Equity Act, says Cosatu

The Congress of South African Trade Unions (Cosatu) has called for stricter measures to enforce compliance with the Employment Equity Act after many JSE-listed companies were found to be not complying with requirements for transformation.

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The federation was reacting to the 17th Employment Equity Report, which found that 68.5% of the top management positions are occupied by the whites, with Africans at 14.4%, Indians at 8.9%, coloureds 4.9% and foreign nationals at 3.4%.

Labour Minister Mildred Oliphant launched the report on Tuesday in Pretoria after receiving it from the Commission on Employment Equity, which is chaired by Tabea Kabinde.

Political economist Professor Patrick Bond said the report confirmed a huge racial problem and how new state capture and the old white monopoly system have squeezed the space for the survival of the poor.

“It contributing to the sense that a so-called Zupta-connected patronage system stands at one side of big business, with an unreformable white monopoly capital system based on old-boy networks at the other – and very little in-between,” Bond said.

Oliphant announced that 21 JSE-listed companies were found not complying with employment equity requirements. The minister revealed that to date, more than 21 companies that have been fined while several others were on the verge of being fined for noncompliance.

“It is this state of affairs that leaves us with no option but to consider, drafting-in harsher consequences for noncompliance,” Oliphant said.

JSE-listed companies alone account for more than 50% of the companies that had been issued with fines for noncompliance by government.

Now, government is considering issuing harsher penalties. Bond did not think big business was interested in transformation, only in profit accumulation.

“Regardless of who runs the firms, these firms have among the five highest profit rates amongst emerging markets,” he said.

“And yet they drain vast amounts of capital out of South Africa, with very low reinvestment rates. It raises a central question: is there a “patriotic bourgeoisie” anywhere to be found in Sandton? It seems not.”

Cosatu spokesperson Sizwe Pamla described the report as depressing. He asked the labour department’s inspectorate services to improve its work in enforcing compliance.

“Government itself has continued to do business with the very same companies, giving them no reason to comply. This lack of political will and decisive leadership has not just comforted the employers, but emboldened them to start pushing back,” Pamla said.

He suggested that the department of trade and industry should blacklist noncompliant companies and not give them any work.

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