Cape Town - Treasury is guilty of protecting big business and having an "intransigent attitude towards transformation", labour and community organisations represented on the Finance Sector Charter Council (FSCC) have told parliament.
Urging parliament to exercise keener oversight over the treasury, Solly Mapaila, who represents community organisations on the FSCC, said on Wednesday that big business had become "untouchable" and "protected by treasury".
Labour and community representatives complained to MPs that when things did not go in favour of banks, they would "run" to the finance minister, contending that government is threatening investment.
Treasury then usually caved into its demands and even saw to it that agreements that have been struck in the FSCC talks about transforming the finance sector were reversed.
Mapaila asked why other sectors should transform faster than the finance sector and added: "Government (treasury) conducts itself as a business entity and not as an entity democratically (elected) by the people. Big business knows it can lobby government outside meetings."
Following a presentation by the FSCC itself where MPs rejected its claim that the sector had exceeded transformation targets, parliament’s finance committee invited labour and community organisations on the FSCC to discuss the slow progress and sticking points in finalising the charter for the finance sector.
The FSCC is hoping to have a new charter aimed at implementing a transformation plan for the sector ready for promulgation and gazetting as a sector code by next March.
While interim targets are expected to be gazetted in November, they relate to employment equity, skills development, procurement from black companies, access to financial services, investment in low-income housing and black economic activities, funding for black empowerment transactions, and ownership and control.
The latter is the most controversial issue, causing a deadlock in charter negotiations.
While labour and community organisations say there has been agreement over 15% direct ownership and 10% indirect ownership targets, banks want to retain the “once empowered always empowered” clause.
This would allow institutions to be empowered into perpetuity once they had done one black economic empowerment ownership deal, much to the objection of labour and community organisations.
They say banks are already using transformation only when it suits them, citing the no-fee Mzansi account initiative.
Collette Caine, who represents community organisations on the FSCC, told MPs that the Mzansi accounts were a classic example of a system that ticked the access-to-banking-box but was rolled out very quickly, without proper consultation and, in the end, does not meet people’s needs.
This is because the account doesn’t offer a debit order system and doesn’t give clients access to loans.
While chairperson of the finance committee, ANC MP Thaba Mufamadi, promised that parliament would ensure there was progress with finalising a charter for the sector, some have warned that without giving in to some business demands the charter wil not be passed by the required 2011 deadlines.
This would mean that the general broad-based black economic empowerment codes will kick in for the sector – and all the other concessions that had been won in the FSCC negotiations would be lost.
- Fin24.com