JSE-listed companies found to defy equity, ‘lack appetite’ for transformation

Political analyst Patrick Bond says the fact that a large number of JSE-listed companies are found to not be complying with employment equity and transformation confirms a huge racial problem in the country and profiteering based on old-boy networks.

This after Labour Minister Mildred Oliphant expressed concern that a large number of JSE-listed companies were not complying with the employment equity requirements.

The minister said the JSE-listed companies alone accounted for more than 50% of the companies that had been issued with fines for noncompliance by the government. Now the government is considering issuing harsher penalties.

“It is this state of affairs that leaves us with no option but to consider drafting in harsher consequences for noncompliance,” Oliphant said. She said, as the “carrot section” of the Employment Act had not produced the desired results, now it was time to apply its “stick section”.

To date, more than 21 companies have been fined, while several others are on the verge of being fined for noncompliance. Critics have ridiculed the imposition of light fines that were not a deterrent because some employers simply budgeted for fines in case they got caught.

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

The report, submitted by the Commission on Employment Equity chaired by Tabea Kabinde, found that 68.5% of the top management positions were occupied by the white people, with black people at 14.4%, Indian people at 8.9%, coloured people at 4.9% and foreign nationals at 3.4%. In the same category, men occupied 78% while women took only 22.0% of the positions. Persons with disabilities constituted a mere 1.2% at top management level.

As could be expected, white people were most dominant at the upper echelons in the Western Cape with 76.6%, 72.1% in Free State and 72% in Eastern Cape.

This trend continues at senior management level, just below the top level, where white people make up a fairly high 58.1%, with all the other races ranging from 22.1% down to 1.4% for foreign nationals.

Oliphant said the report pointed to what she called the “painfully slow pace” of transformation in the South African labour market.

“It also mirrors the glaring lack of appetite for transformation, especially by big corporates,” the minister said.

– ericn@citizen.co.za