Address by COSATU President, Willie Madisha, Speech delivered at the Harold Wolpe Memorial Seminar - 8 June 2005

 

Speech delivered by President of COSATU, Willie Madisha, at the Harold Wolpe Memorial Seminar- 8 June 2005 - Johannesburg

Ladies and gentlemen, comrades and friends.

It is a great honour to be invited to speak at a seminar named after one of the great heroes of our struggle - Harold Wolpe. His life - as a lawyer, as an academic, and, above all, as a liberation fighter, was an example to us all. Let us hope that his life will inspire us tonight and enrich our discussion on this important topic

COSATU, from its creation 20 years ago, has recognised that the working class historically has faced a double battle - for economic liberation from capitalist exploitation and for the liberation of Africans in particular and blacks in general from national oppression and apartheid. The national question has always been inseparable from the class questions.

That is why the principle of black economic empowerment has never been in question. Redistributing wealth to all previously disadvantaged communities and individuals, including blacks, women and people with disabilities has to be an integral part of South Africa's transformation. There is no way our national democratic revolution can be completed without transforming the massive racial imbalance in the distribution of wealth and power which we inherited from our racist past.

The 1994 democratic elections of course marked a turning point in our struggle against racism. Since then, we have put in place a constitution and many laws which enshrine the principle of non-racialism.

The Employment Equity Act decrees that workers must no longer be discriminated against on the basis of colour, creed, sexual orientation or social standing. The Broad-based Economic Empowerment Act is supposed to empower these same people economically.

But the central question of tonight's discussion is: Are these laws really changing South Africa into a non-racial society where the distribution of rewards is based purely on merit rather than race?

The answer has to be a decisive NO. As my good friend and comrade, Blade Nzimande, said recently "What has passed for 'black economic empowerment' over the last decade has been essentially the accommodation of an elite. There has been nothing broad-based about it. And there has been little that is transformational about it. It has been about changing some of the leading agents of the existing system, leaving intact the entire system itself, a system that generates and reproduces inequality in our country. Racialised capitalism persists."

To measure the success of BEE it is worth recalling that the Black Economic Empowerment Commission recommended in 2000 that the following quotas, among others, be introduced:

30% of productive land should be in black hands.
Black equity participation in each sector of the economy should be increased to at least 25%.
Black people should hold at least 25% of the shares of companies listed on the JSE.
At least 40% of non-executive and executive directors of companies listed on the JSE should be black.
At least 50% of state-owned enterprises and government procurement should go to black companies.
At least 30% of the private sector should comprise black-owned companies.
At least 40% of senior and executive management in private sector companies (with more than 50 employees) should be black.
However the BusinnessMap Foundation noted in its 2004 report on BEE that while the market capitalisation of black-controlled companies listed on the Johannesburg Stock Exchange increased by 32%, from R44 billion at the start of 2003 to R58 billion by the end, black control of total market capitalisation on the JSE remained at a pathetic 3%, a mere one-tenth of the target figure. The number of black-controlled companies listed on the JSE actually dropped from 22 to 21 during 2003 - less than the 38 in August 1999.

We can see the same problem in the implementation (or, more honestly, non-implementation) of the Employment Equity Act, which is supposed to ensure that all employers train and promote workers so that the demographics of the workplace reflect the racial and gender composition of the country.

A report by the Commission for Employment Equity in 2002 revealed that up to 60% of designated employers flagrantly violated the EEA's provisions. Only 19% of positions at top management level in 2002 were held by black people (defined as Africans, Coloureds and Indians), a tiny improvement of 5.7% since 2000. 14% of these positions were held by women, a minute improvement of 1.3%. But black women held no more than 2% of these positions.

31% of professionally qualified employees were black and also 31% were women. There was a 15% drop in the percentage of black women at this level. The report made it clear that black women remain by far the worst off in terms of the number and quality of senior or skilled jobs.

At the other end of the spectrum, the overwhelming number of black workers were in the unskilled and worst paid jobs, where they amount to 83% of the workforce. In "elementary" occupations like news vendors, garage attendants, car washers, gardeners and garbage collectors, 98% were black.

It is the same story when we look more broadly at the wealth and lifestyles of the difference races. While Africans make up 76% of the population, their share of income amounts to only 29% of the total. Whites, who make up less than 13% of the population, take away 58.5% of total income

Within the poorest 53% of the population, a third live in shacks or traditional dwellings, about 80% have no access to electricity, about 70% have no access to piped water to their premises, and more than 80% have no access to modern sanitation.

Inequalities in education and health care are striking. Even a World Bank study in 2001 admitted: "While only one in a hundred white children dies in infancy, ten of every hundred African children do - five of them from easily preventable conditions. Of African children who reach the age of five, more than half suffer stunted growth because of inadequate nutrition.

Among those who manage to enter school, only one in seven reaches standard 10, after many years of repetition. "Of adults, fewer than half work in the formal economy. For those who become parents, the maternal mortality rate is 70 times higher among Africans than among whites.

"The cumulative effect of such inequity carries through life. Per capita, whites earn 9.5 times the income of blacks and live, on average, 11.5 years longer. In sum, South Africa exhibits that most bitter of social outcomes: destitution amid plenty."

These inequalities are not accidental but the outcome of low-wage policies followed for years by the private sector and the institutionalised racism of the apartheid government which consistently under-spent on social services for black people.

All this produced a society of two nations - one powerful, wealthy and white, the other powerless, poor and black.

It is true of course that so long as we live in a capitalist society, there will be those who get rich while others remain poor. We cannot however tolerate a situation that a tiny number of individuals enrich themselves many times over, while the overwhelming majority gain absolutely nothing, or become even poorer. We cannot accept that in the name of BEE the old white elite can simply be replaced by a new black one.

How can we justify Patrice Motsepe being worth R3,3 billion and Tokyo Sexwale R1,5 billion, when so many of our people are in dire poverty?

If empowerment is to mean anything, it must improve the lives of all black people. First of all it must create jobs. There is nothing more disempowering than unemployment. It deprives you not only of an income but also your dignity and self-belief. Having work is the first vital step towards empowerment.

One of the reasons why COSATU was so opposed to Telkom's so-called 'empowerment' deal was that this was a company which has been savagely retrenching workers for years. It has been raising its tariffs for local calls and cutting off services to thousands of its poorest customers. In return a handful of people stand to make a fortune from buying shares and getting a cut of the R6,807-billion profit it has just announced (up by 53% over the year!).

It would have been far more empowering for the majority of black people if Telkom has been kept in public ownership and run as an affordable, efficient service for the people. Public ownership, provided it leads to the swift delivery of quality services is more empowering than privatization which is driven by nothing but the desire for quick profits and results in retrenchments and worse service.

Other kinds of BEE which we want to see are worker and community cooperatives, especially those that directly or indirectly improve the lives of the employees and the community by extending and improving community access to affordable services like electricity, housing, transport and telecommunications.

We also want to do more to harness the economic power of trade union investment companies by investing the workers' money in similar job-creating, socially useful projects.

The Labour Job Creation Trust, of which I am proud to be the Chairperson, is a shining example of how workers' money can be used as capital to empower other workers with jobs and enrich the lives of communities. Its most recent collaboration with the Department of Water Affairs and Forestry to speed up and improve the delivery of fresh water and sanitation to poor communities is a splendid example.

Yes we want to see broad-based black economic empowerment. But is must be for all the people, not just a lucky few who have won the equivalent of the lotto jackpot, while their fellow citizens languish in poverty. Power to the people!