Years after apartheid was abolished, the shadow of inequality looms large, with nearly 40% of the Black population in South Africa facing unemployment.
This week saw the emergence of a heated public discourse and protests led by the primary opposition, following the introduction of a novel law aimed at bridging the racial, economic divide in South Africa—a nation still grappling with profound social disparities.
South African President Cyril Ramaphosa gave his assent to the Employment Equity Amendment, Bill of 2020 on April 12. The bill presents “equity targets” to expedite the process of achieving racial balance, especially in the corporate realm.
This legislative move aligns with the government’s dedication to “ushering in enhanced diversity and equality in professional environments.” Evoking the spirit of Black Economic Empowerment, this act, too, is rooted in the vision to economically uplift the Black community of South Africa, who faced systemic discrimination during the apartheid era.
However, the grim reality persists. Labelled by the World Bank as having “some of the most stubborn and entrenched inequality indices globally,” this inequality is a residual effect of a history marred by exclusion.
In 2023’s initial quarter, official data painted a stark disparity: while unemployment soared at close to 40% for Black South Africans, white counterparts had a mere 7.5% unemployment rate.
The corporate world mirrors this imbalance. Despite constituting 80% of the potential workforce, Black individuals occupy a meager 16.9% of premier managerial positions. In contrast, white individuals, representing roughly 8% of the employable demographic, claim a staggering 62.9% of these roles.
Reflecting on the persistent disparities, Masilo Lefika from the Department of Employment and Labour commented on the unchanged scenario even two and a half decades post the original EEA’s introduction, stating, “the landscape remains virtually unaltered.”
Here’s an in-depth look at this revolutionary law and the fervent discussions it has instigated.
What does the law say?
The revised EEA pertains primarily to “designated employers”, defined as businesses employing more than 50 individuals. Such businesses are obligated to furnish plans which outline the demographics of their operational zones and illustrate how they intend to meet the outlined equity benchmarks.
Previously, it was up to the employers to define their own diversity objectives and subsequently provide updates to the labour department about their progress in cultivating a diverse workplace.
With the amendment in place, the responsibility now lies with the minister of employment and labour. The minister will earmark specific industries that warrant transformation and establish a “quantitative goal” to ensure racial inclusivity. Employers will be bound by these set targets.
An additional mandate requires companies aiming to partner with the government to present an affirmation certificate from the labour department, attesting to their compliance with the EEA provisions. It’s worth noting, however, that this act exempts national security and intelligence sectors.
Citing the construction sector, the human capital consultancy, Insights, illustrated the law’s impact. The set goal for “professionally certified Africans” in the field is projected at 65.2% over the forthcoming five years, marking a substantial leap from the present 46.9%.
While the objective of these “equity benchmarks” is to champion the representation of historically marginalized communities, the challenges posed by a contracting economy mean reaching these ambitious goals may be formidable, as observed by Insights.
What are the criticisms?
The Democratic Alliance (DA), South Africa’s leading opposition party, has voiced stern objections to the legislation, condemning it as an imposition of “race-based benchmarks” on businesses that, they argue, could detrimentally impact the nation’s economy. This discontent was palpable as DA members organized a march to the Cape Town parliament in protest.
Describing the act as a hasty political maneuver by the ruling African National Congress (ANC) in anticipation of the 2024 elections, Michael Cardo, the DA’s representative for employment and labour, expressed skepticism about the law’s overarching effects.
The party has raised alarms about potential job losses stemming from the act’s enforcement, predicting the displacement of around 220,000 white, 85,000 coloured, and 50,000 Indian individuals in Gauteng – the industrial heart of the nation – over the ensuing five years.
Amid an unemployment rate affecting almost one-third of South Africa’s 60 million citizens, coupled with escalating living costs and recurrent power outages, the economic strain, particularly on Black communities, is palpable.
The Institute of Race Relations, a prominent research entity, posits that racial-centric policies have fallen short in alleviating poverty. Instead, they advocate for an employment model that prioritizes skills.
Moreover, Solidarity, a trade union predominantly representing white members, has rallied major South African corporations to voice their dissent against this “new racial mandate”, claiming it risks turning South Africa into the globe’s most racially restricted nation.
Confusion regarding the law’s practical application is also evident. Following the Department of Water and Sanitation’s unveiling of guidelines around Black South African shareholder prerequisites for water license applications, there were concerns from agricultural sectors about potential threats to food stability.
However, Sipho Skosana, overseeing water distribution, clarified that the majority of South Africa’s water resources were already designated, meaning the new rules wouldn’t pertain to them. Yet, he highlighted a stark disparity in water distribution, with a vast majority controlled by white irrigators. Skosana remarked on the urgency of redressing this imbalance, emphasizing that it’s untenable for the majority to have such limited access to crucial developmental resources.
What do supporters of the law say?
South Africa’s administration, backed firmly by the ANC, stands resolute in its belief that the updated legislation aims not at inducing job redundancies but at fostering a more balanced representation within the professional sphere.
Upon the law’s ratification by the president, Thulas Nxesi, the Minister of Employment and Labour, dispelled concerns about its potential ramifications. He emphasized, “There’s no concrete data to suggest that introducing sector-specific equity objectives would inadvertently impact employment dynamics.”
The Congress of South African Trade Unions (COSATU), a predominant labor federation in the nation, echoes this sentiment, extending its robust endorsement to the revised EEA.
Matthew Parks, COSATU’s liaison for parliamentary affairs, articulated the urgency of the situation, pressing the Department of Employment and Labour to swiftly operationalize these much-anticipated regulatory clauses. The union perceives the amendment as a pivotal measure to bolster the state’s supervisory capacity over employers.
Labor law specialist from Cape Town, Frans Rautenbach, highlights the fundamental intent behind both the original and amended EEA. He asserts, “Its primary objective is to ensure that Black employees are provided with equitable prospects and that there’s a true reflection of demographic diversity. An employer, by genuinely and earnestly embracing affirmative measures in accordance with the delineated procedures, adheres to the Act’s mandate.”
However, Gilad Isaacs, at the helm of the Institute for Economic Justice, underscores a prevalent corporate mindset fixated primarily on profit augmentation and shareholder dividends. Such a focus often sidelines the kind of diverse inclusion that the EEA champions, necessitating the recent adjustments.
Isaacs observes a general corporate aversion to any policy shifts emphasizing “equity benchmarks” or advocating affirmative recruitment and diversity initiatives. He believes the EEA plays a pivotal role in redefining corporate stewardship.
Addressing the increasing global pattern of job subcontracting and transient employment, Isaacs comments on the diminishing sense of corporate accountability. In his words, corporations have gravitated to a paradigm wherein employee well-being is sidestepped in favor of mere skill acquisition.
Issacs, in his dialogue with Al Jazeera, emphasized the imperative for robust norms steering long-term investments and a proactive governance ready to navigate such complexities.