New ‘equity’ law: what was Ramaphosa thinking?

President Cyril Ramaphosa made history yesterday by signing a far more aggressive form of BEE – the Employment Equity Amendment Bill (EEB) – into law. The IRR has written to the Presidency to ask what Ramaphosa was thinking.

The IRR has opposed the EEB at every step of its legal progression, including its 2020 rebirth, after which Labour and Employment Minister Thulas Nxesi called for a “more aggressive strategy” on racial social engineering. (The amendment bill adds new measures and ministerial powers to the first ANC government’s Employment Equity Act of 1998.) The IRR last year delivered a petition of 23 000 signatures to the Presidency in support of the call for Ramaphosa to veto the Bill on the grounds of its unconstitutionality.

In response to this, and a further indication that the Dis-Chem race "moratorium" scandal was a mere foretaste of "more aggressive" racist humiliations to come, the Presidency responded with the guarantee that the IRR’s objections to the EEB’s unconstitutionality “will be considered before the President takes a final decision”.

Ramaphosa was furthermore obliged in terms to Section 79 of the Constitution to send the EEB back to Parliament if he had “reservations about the constitutionality of the Bill”.

The EEB’s two primary effects are to expose roughly 85% of the formal private sector workforce to the power of Minister Nxesi to impose Dis-Chem-style race quotas, and secondly to effectively reintroduce the pre-disqualification system in government procurement according to which companies are prevented from bidding if they do not match racial requirements.

As the IRR has pointed out to President Ramaphosa, the EEB is unconstitutional on at least the following grounds:

• It will compel employers to apply vague criteria in an opaque process in overturning the supposedly “voluntary” racial self-classifications of their employees. In other words, it will force employers to do a kind of “pencil test” without telling them how, or face fines so severe they could be bankrupted. This is contrary to the certainty required by the rule of law, which is itself required by Section 1 of the Constitution. This outsourced pencil-testing is also profoundly antithetical to nonracialism, a Section 1 constitutional value.
• It fails the great majority of poor black people, who will not get management or other senior jobs under it. It will not “advance” the poor, but will rather hurt them by choking off investment, growth, and jobs. It will not “promote equality” but rather increase the already very large gap between a relatively small black elite and the 11.3 million black people now mired in unemployment and destitution. As such, the EEB falls foul of the equality clause, Section 9, which prohibits forms of BEE that make the rich richer while leaving the poor to languish in poverty.
• It extends to the private sector the kind of public sector racialism that was manifest when SAPS Commissioner Jackie Selebi kept a police post open rather than promote someone of the “wrong” race. A technically precise reading of Section 195 of the Constitution indicates that public sector measures should not bleed into the private sector in this way.
• It bars companies that fail to comply with the minister’s racial quotas from doing business with the government at all. This violates Section 217 of the Constitution, which requires – as the report of the State Capture Commission described it – adherence to the imperative to "maximize value-for-money".

How did Ramaphosa fail to recognise a single constitutional reservation out of all of that?

Said IRR Campaign Manager Mlondi Mdluli: “The IRR is preparing to challenge this unconstitutional piece of legislation in court. We will not take this lying down.”

Media contacts: Mlondi Mdluli, IRR Campaign Manager- 071 148 2971; mlondi@irr.org.za

Gabriel Crouse, IRR Head of Campaigns – 082 510 0360; gabriel@irr.org.za

Media enquiries: Michael Morris Tel: 066 302 1968 Email: michael@irr.org.za 

Sinalo Thuku, 073 932 8506 Email: sinalo@irr.org.za