Cosatu slams 'elitist' BEE deals

The Congress of South African Trade Unions (Cosatu) has condemned what it termed “elitist” black economic empowerment (BEE) deals in the steel industry.

In a statement on Wednesday, the union federation said ArcelorMittal South Africa (Amsa) had “decided to get new BEE partners with strong links to some in the government in the form of Ayigobi Consortium, which now has a 21% stake in Amsa”.

The deal was reported to be worth R9,1-billion.

“Amsa went on to also acquire Imperial Crown Trading [ICT], which was awarded prospecting rights for 21,4% of Kumba’s Sishen mine by the Department of Mineral Resources [DMR] in March 2010.”

The 21,4% prospecting right granted to ICT was the same right Amsa had allowed to lapse.

Both Kumba and ICT applied to the department for the right ceded by Amsa when it missed the renewal deadline, and on Tuesday the department announced its decision to uphold the award of prospecting rights to ICT.

“The shareholders of ICT have links with some in government and this is how business has been operating in the past decade, promoting narrow elitist BEE.”

Cosatu said it agreed with the National Union of Metalworkers of South Africa [Numsa] that the deal “clearly appears to be a get-rich-quick scheme involving a so-called BEE consortium, Imperial Crown Trading”.

This deal did not address the key challenges the workers and the poor were facing.

“It is not about the creation of decent work, which is the key government priority,” Cosatu said.

It said it would be increasingly difficult to dispel the perception that through this deal Amsa was buying political clout.

“This deal will entrench Amsa dominance in the steel industry to the detriment of the economy and job creation.”

Cosatu said that current BEE policy was based on the view that empowerment meant giving millions of rands-worth of shares to a few individuals, while the overwhelming black majority was left as disempowered.

“Instead of making a rich elite minority even richer, BEE should benefit the workers, including the unemployed and poor communities.”

‘There is nothing broad-based about deals like this one’
Cosatu said that presently BEE promoted self-accumulation and this could not be allowed to continue in its current form.

“There is nothing broad-based about BEE deals like this one.”

The union federation said the current policy on BEE should be replaced with a new law that would promote cooperatives which created jobs, developed skills and shared the profits among workers and communities, rather that promoting individual accumulation.

Cosatu supported Numsa’s call on the ANC, and the government, “to mandate the Cabinet to intervene to reverse these seriously embarrassing deals”.

If the deals were allowed to stand, they could do the country no good.

“The image of BEE, intended as a critical progressive measure to deracialise the South African economy, could otherwise be permanently tarnished”, Cosatu said.

It issued a strong warning that the ongoing saga should not be used as an excuse to retrench workers.

“It must not lead to even a single job being lost as the economy has lost more than a million jobs already as many companies used the global economic crisis to justify retrenchments, even in cases where it was not necessary.”

Cosatu said the “sad reality” was that the whole saga involving Amsa and Kumba was continuing despite the state owning about 18% of shares in Amsa through the Industrial Development Corporation (8,8%) and the Public Investment Corporation’s (PIC) 8,95%.

The state also owned 5% of Kumba’s shares through the PIC.

Had Iscor not been privatised and ultimately sold to ArcelorMittal and its mining arm handed over to Anglo American, the economy would not be facing these challenges, Cosatu said.

“These developments make the debate on nationalisation even more relevant.”—Sapa

Client Media Releases

Durban team reaches Enactus World Cup semi-finals
IIE Rosebank College opens campus in Cape Town
Pharmacen makes strides in 3D research for a better life for all
UKZN neurosurgeon on a mission to treat movement disorders
Teraco achieves global top 3 data centre ranking
ContinuitySA's Willem Olivier scoops BCI award
MBDA to host first Eastern Cape Fashion and Design Council
Sanral puts out N2/N3 tenders worth billions
EPBCS lives up to expectations
The benefit of unpacking your payslip