Black business targets Mining Charter and Reserve Bank | Fin24

Black business targets Mining Charter and Reserve Bank

Oct 02 2016 06:00
Justin Brown

Johannesburg - The Mining Charter and the SA Reserve Bank were attacked this week at the Black Business Council’s annual conference.

Duma Gqubule, founder of the Centre for Economic Development and Transformation, said the Reserve Bank was responsible for causing the last three recessions, as well as the current economic downturn.

Addressing Black Business Council delegates at the Radisson Blu Gautrain Hotel in Sandton, Johannesburg, Gqubule also called for financial stimulus of R400 billion over the next three years.

Local unemployment increased from 28.7% in December 2008 to 36.4% in June this year. At the same time, black unemployment rose from 33.8% in December 2008 to 40.9% in June this year.

“There is a crisis of collapsing gross domestic product growth and rising unemployment,” Gqubule said.

Turning to BEE, Gqubule said that there had been more than R600 billion in empowerment deals from 1995 to last year.

Gqubule put black ownership of listed and unlisted assets at R240 billion, or 2.7% of the JSE Top 40 market value.

He criticised the Mining Charter for appearing revolutionary, “but now it looks primitive”.

Other weaknesses of the Mining Charter included no targets for communities and workers, and vague stakeholder commitment. The Mining Charter had also been overtaken by advances in the measure of empowerment.

READ: SA mines fight over proposed community revenue share

“There is an absence of numerical targets for most indicators,” Gqubule said.

“There is no measurement system and scorecard with clear definitions to reduce the possibility of different interpretations by stakeholders.

“There is no system to monitor implementation on an annual basis. There is no independent verification of empowerment contributions.

“Mining was the only sector of the economy that did not have to produce empowerment verification certificates,” Gqubule said.

The Mining Charter has disturbingly low targets for employment equity and black women.

“Mining companies consider the signing of a transaction as the achievement of the ownership target. In the rest of the economy, where the BEE codes apply, ownership is a process, not an event,” Gqubule said.

“In mining, apparent compliance at the time of awarding a mineral right is usually followed by complex funding that dilutes black ownership.”

READ: Zwane willing to give breather on Mining Charter

Gqubule called for the Mineral and Petroleum Resources Development Act and the Mining Charter to be unlinked.

Turning to the financial sector, he said that the black ownership of all companies, except for Sanlam, had dropped significantly since the unwinding of transactions.

Gqubule said that the battle over the “once-empowered, always-empowered principle” was one of the most important issues in transformation.

“If the private sector [mines and banks] win, it will be a premature end of BEE deals long before we have transformed the economy,” he said.

This week the BBC elected new office bearers. Sello Rasethaba is the council’s chairman, Danisa Balosi is the BBC president, head of policy is Mzwanele Manyi, vice president for organised business is Gilbert Mosena and vice president for professionals is Zukiswa Ntlangula.

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