The Financial Sector Campaign Coalition (FSCC) said on Wednesday it is disappointed that the signatories of the Financial Sector Charter have failed to engage with the Nedlac community and labour constituencies to finalise its contents or agree on details with regards to its governing structure.
The coalition, which has been at the forefront of championing transformation in the financial sector in South Africa, said it is concerned that failure to inolve the Nedlac labour and community interests in finalising the charter could delay or even derail it.
“When the charter was launched in October 2003, the FSCC welcomed it as marking a break with the past even though it was drafted in what we called at the time an elite boardroom process. In the seven months since the charter was launched, we have been disappointed that its signatories have failed to engage with the Nedlac community and labour constituencies to finalise its contents or agree details of its governing structure.
“Our view is that the charter does not adequately address a number of issues identified in the summit agreements. The charter is non-prescriptive yet seeks to replace legislation such as the Community Reinvestment Act. The charter commits R20-billion to housing but we question whether this voluntary commitment is appropriate or adequate.
“Of course, because we have been cut out of the charter’s deliberations on finalising its commitments, targets and timeframes, we are not aware of the assumptions its drafters made in deciding on a ceiling of R220-billion. We believe legislation could yield a significant increase on the charter’s R20-billion, assuring greater investment in all our communities.
“The charter promises investment of ‘up to R75-billion’, or up to 3,75% of assets of R2-trillion; this falls short of the 5% target or more we would have liked to see.
“The charter fails to address the summit commitment to creating a financial sector ‘which is more diverse in terms of nature, size and ownership of institutions’.
“The charter is silent on the issue of micro lending despite the summit’s concerns with the high cost of credit, usurious practices in the financial sector and the crisis of over-indebtedness; the charter fails to heed the summit’s call for financial institutions to ‘interact with and support smaller institutions, especially cooperative banks and NGOs that can provide micro credit to poor households’.
“The charter fails to deal with discrimination and HIV/Aids. We are told this silence arises from a concern by the drafters of the charter not to identify HIV/Aids as a black economic empowerment issue. We reject this notion and believe that a charter that seeks to transform the financial sector cannot ignore one of the major challenges to the well-being of our economy and society.”
It said that if these and other issues are not to be dealt with voluntarily by the industry, they must be urgently addressed through other forums, including Nedlac — a forum shared by the government, business and labour to thrash out issues.
“We are concerned that failure to involve the Nedlac labour and community interests in finalising the charter could delay or even derail it. We call on the charter signatories to immediately invite these constituencies to join business and government in finalising the charter, including deliberations on the composition of the charter council.
“No other organisation, including those that drafted the charter on behalf of black business interests, has a mandate to represent the interests of the workers and the poor. We will speak for ourselves.
“Our position is that we will serve on the charter council if we reach agreement on its composition. We are prepared to play our role by ensuring that the views and aspirations of the majority of South Africans are articulated in the council. At the same time, we reserve our rights to review all decisions taken by the signatories to the charter during the period we have been excluded from influencing the charter,” the FSCC said in a statement.
It added: “We will continue to engage with the social partners in Nedlac to measure the charter against the Nedlac summit agreements. We will also continue to engage our colleagues in organised labour on the important issue of pensions and retirement fund management and investment.”
The coalition also said it is concerned that the 13 agreements reached at the Nedlac Financial Sector Summit in 2002 are being “implemented in a slow and piecemeal manner that undermines their impact, especially on the workers and the poor”. — I-Net Bridge