Empowerment - June 2019

OCEANS ECONOMY

SA BOAT-BUILDERS

REAODCYETAO NCOSNETRCIOBUNTOEMTOYTHE

The jury is still out on Operation Phakisa – government’s drive to create one
million jobs through exploiting the Oceans Economy. Caiphus Kgosana reports

P hakisa is a Sesotho word for “hurry up” and At the launch of Operation Phakisa, it was noted that
the operation was launched with much South Africa had no registered ships, despite the fact
fanfare by former president Jacob Zuma that 300 million tonnes of cargo moves through our ports
in Durban in 2014. At its launch, it was each year in export and imports.
estimated that the Oceans Economy could
IMAGES SUPPLIED potentially contribute R177-billion to GDP and create “They are our niche specialisation in South Africa,” Research conducted by Quantec Research Database
one million jobs by 2033. she says. in 2015 shows that yachts and other leisure and
recreational boats were the most popular type of
Potential projects identified under the Oceans South Africa also produces super-yachts designed watercraft exported, which contributed R1.5-billion or
Economy were aquaculture, offshore oil and gas, for wealthy international clients through a company 84 per cent of total export value for ships, boats, and
marine protection and governance, marine transport called Southern Yard, an Italian-owned investment. other floating structures in 2015.
and manufacturing, coastal and marine tourism,
small harbour and coastal state land development. Davidson said SABBEX had participated in According to SABBEX, this category (yachts and
the launch of Operation Phakisa and the marine other leisure and recreational boats) has also shown
At the launch of Operation Phakisa, it was noted manufacturing industry was grinding ahead, significant growth in export value since 2010. In
that South Africa had no registered ships, despite the contributing to the economy and employment that year, the value of exports in this category was
fact that 300 million tonnes of cargo moves through creation. She is concerned, however, that the R677 000. This means it has experienced a 14 per cent
our ports each year in export and imports. targets set under Operation Phakisa could have annual growth year on year.
been a bit ambitious.
South Africa also moves 1.2 million tonnes of liquid
fuel along its coast, with its rapidly expanding oil and
gas activities requiring a fleet of supporting vessels.

What most people do not know, however, is that
South Africa has a thriving boat-building industry
and is one of the world leaders in building and
exporting catamarans. The South African boat-
building industry has gained a strong reputation and
has won a number of international awards.

According to the South African Boat Builders
Export Council (SABBEX), the marine manufacturing
industry is largely based in the coastal regions
of South Africa, predominantly in the Western
Cape (Cape Town), KwaZulu-Natal (Durban) and
the Eastern Cape (Port Elizabeth). While most of
the business is concentrated in the coastal regions,
Gauteng also contributes to this industry, especially in
the manufacturing of smaller craft and motor boats
for inland use.

Vanessa Davidson, executive head of SABBEX,
estimates that the industry employs around 3 700
people, with the potential to grow.

One of the big manufacturers is Cape Town-based
Robertson and Caine, which employs around half
of the entire workforce in the industry and produces
around 220 boats a year, mainly catamarans.

E M P O W E R M E N T 49

WOHRASKEEE D? Instability caused by job-hopping was an
Ryland Fisher unpacks the challenges around creating unintended consequence of EE, but Bowers says that
balance equality in the workplace job-hopping was no longer as big a problem as it used
to be. “It has stabilised because of the context and
T ania Bowers benefitted from that affirmative action was being the fragile economy in which we find ourselves. The
affirmative action before issue of job security is becoming more important
it became known as implemented by some more than job-hopping.”
employment equity
(EE). She believes she progressive large organisations Bowers feels that the issue was far more
was in the right place at the complex than just blaming problems with EE on
right time. For most of the Tania before employment equity implementation and monitoring. “There are a
past 25 years, she has worked Bowers legislation was implemented. number of soft intangible factors that impede on
at Eskom where she has our ability to ensure that we achieve authentic
gradually moved up the ranks. “In the previous regime, employment equity.
She is now a middle manager
dealing with supplier development the state-owned enterprises “The situation of job-hopping, as an example,
and localisation. or the need to find black people as a commodity,
(SOEs) were very large also created challenges around tokenism,
Bowers started working at Eskom in depriving other black people who are deserving of
1993 after she fell pregnant three months after organisations and they opportunities. Education was used as a yardstick to
matriculating. She eventually obtained two degrees deprive other people of accessing better positions.
and is currently working on her doctorate. took in people at all levels, There was a lot of focus on training and exposure, or
development. But the progression was also a major
“I was lucky to be in a state-owned company. At including different qualification challenge. They developed multiple people but the
the time there was a lot of legislative pressure on number of available positions would be less than the
state-owned companies and I found myself in the levels. They countered this by number of people,” Bowers says.
right place at the right time.
having large numbers of employees, “Employment equity was not fundamentally
“With that obviously came a strong focus on about getting a better job. In terms of our democratic
people development. Being a female was also so it was job creation. context, it was about changing the lives of those
advantageous at the time in terms of accomplishing that were previously disadvantaged. Unless I got it
gender targets. Government imposed targets on big “They also made sure that they had very large wrong somewhere?
organisations so that they could drive the whole
transformation agenda,” Bowers explains. in-house training centres, and they would focus “The lack of implementation of employment
equity has created a greater fragmentation among
Nerina Begg, a former Eskom human resources on growing those people who, in turn, stayed with black people. That’s why you have a situation where
executive who now works as a consultant, says coloured people and Africans are opposing each
those organisations. When the implementation of other and that is not supposed to be the spirit of
employment equity,” she says.
employment equity came, it was very hard because
Bowers said that she received a lot of support
they couldn’t put those people out,” Begg says. in the middle part of her career but not at the
beginning. “At some stage, I realised that I needed
“As I recall, the policy was good, but the problem to put myself out there so that I would be noticed
by management. I did this by becoming active in
came with the implementation and the
the National Union of Mineworkers (NUM).
support structures for that. When I got a lot of opportunities to tap into my
own skills.”
the demographics within the
SUCCESSFUL PRODUCTS OF EE
company had to be taken
Bonang Mohale, CEO of Business
into consideration by Leadership SA and former Black
Management Forum president,
business, they took away all says that he was unashamedly
and unequivocally a product of
the support systems those employment equity.

people had implemented.” “Sometimes you might not
even know how you have
“There are a number of soft intangible benefitted, because of
factors that impede on our ability to ensure
that we achieve authentic employment the people
equity.” — TANIA BOWERS

50 E M P O W E R M E N T

EMPLOYMENT EQUITY

who have come before you and who have been Tony benefitted from being black. “I started benefitting
questioning, agitating and orchestrating that Ehrenreich when I went into my post-graduate studies. It was
there should be more representation by black around 2001 and I was awarded a scholarship
people and women. Tony from the National Research Foundation.
Ehrenreich
“When I became the managing director of “I benefitted because I was black and a
the world’s biggest and oldest elevator company, woman and, at the time, the National Research
Otis, in 1996, it was the people before me that laid Foundation was changing its focus to make
the foundation and made it easier for me to be sure that research was South African-based so
headhunted as the MD. that there could be African solutions to African
problems.
“The other benefit is that it exposes you to
training because they need to tick that box about “Further on, I was awarded a research
skills development. They want EE statistics, associateship by the University of Cape Town
therefore your own personal growth and and I also got awards from SAMRO as someone
development might be accelerated. In the old studying music education, and a scholarship to
apartheid era, somebody might not even look at Norway to study multiculturalism and education
you,” he says. in the developing world.

Tshepo Ramodibe, a senior executive in a “Mostly, beyond my undergraduate studies, I
JSE-listed company, said his first job, as a 23-year- was often being advanced as a black person and
old with a master’s degree in international as a black woman,” Mnukwana explains. “It made
relations, was in government. “I was lucky to
IMAGES: SUPPLIED be appointed as an assistant director at the “Some workers have been taken up into management positions
presidency in mid-2000. I credit the appointment to bring legitimacy to apartheid-constructed workplaces.
to key officials at the presidency who wanted to But the black staff taken up into management quickly forget
bring colour to the revered corridors of the Union about the rest of the workers and get assimilated into the
Buildings. white culture of the business practices. So, the apartheid
wage gap is still the same and most senior management are
“I had no internship exposure and zero formal still white.” — Tony ehrenreich
work experience. I applied and benefitted from
a government that backed its own policies to Ramodibe feels that the impact of EE has been a huge difference to my life because it nurtured
recruit Africans. Subsequent to that, I worked for limited. “While there has been an increase in my international profile and, in some cases, I have
new-democracy companies in the telecoms sector the representation of previously disadvantaged been headhunted for jobs because of being black
that actively supported EE and transformation. individuals in middle management, professional and a woman.”
These firms had no white-dominance baggage and technically skilled levels, top management
and were at ease in cementing workplace levels are not reflective of demographics and WHERE EE HAS FAILED
transformation and employment equity. economically active population.
Tony Ehrenreich, former Cosatu Western Cape
Ncebakazi “Persistent and deep-rooted societal factors secretary, felt that not many EE plans drafted
Mnukwana have slowed progression in the workplace. It takes in companies created career paths for ordinary
too long for black executives to crack the nod. workers. “Some workers have been taken up into
Old networks and undervaluing of diversity as a management positions to bring legitimacy to
differentiator are some contributors. apartheid-constructed workplaces.

“Government needs to effectively monitor EE “But the black staff taken up into management
scorecard padding to avoid black representation quickly forget about the rest of the workers and
stagnating at middle management. Companies become assimilated into the white culture of the
need to penalised for stagnation. You can’t have business practices. So, the apartheid wage gap is
seasoned middle managers stuck at same levels still the same and most senior management is still
despite experience and acting role exposure. With white,” he says.
experience and delivery track record, Africans
deserving promotions need to be moving up into Ehrenreich feels that employment equity has
strategic roles,” Ramodibe says. not worked well across the economy.

Stellenbosch University music lecturer “In some industries, like the metal and
Ncebakazi Mnukwana says that she has engineering industry, unions demanded the
closing of the apartheid wage gap,” he says.

E M P O W E R M E N T 51





TBO-UbBGEHE COMMISSION GETS

ON OFFENDERS

Fronting and corruption is set to be stamped out as the B-bBEE Commission monitors and
enforces BEE codes, reports Ryland Fisher

W hen the government introduced “Among the critical 2013 Zodwa Ntuli, B-bBEE Commissioner
the Broad-based Black Economic amendments, in addition to
Empowerment Act in 2003, there the establishment of the criminalise fronting as a practice that undermines
was a broad expectation that Black B-bBEE Commission, was the what the empowerment legislation was meant
Economic Empowerment (BEE) would inclusion of the provision to achieve,” Ntuli said.
finally be able to serve the majority of previously to criminalise fronting as
disadvantaged people and help to transform the a practice that undermines CRIMINAL OFFENCES
South African economy. However, it soon became
clear that this would not be the case. what the empowerment “Fronting now is a criminal offence, as is
legislation was meant misrepresenting your B-bBEE status as a company.
B-bBEE Commissioner Zodwa Ntuli said in an to achieve.” — Zodwa Ntuli If you say you have black ownership and you do
interview at her office in Pretoria that after the not have it, that is a criminal offence.
Department of Trade and Industry, which had
oversight of B-bBEE, conducted a review of how “If you submit a B-bBEE certificate to an organ
we were doing in terms of the legislation, it was of state for tenders or bid concessions, and that
identified that there were a number of gaps; the B-bBEE certificate sells you as an empowered
most glaring of which related to monitoring how company when that is not the case, that is also a
B-bBEE was being implemented. criminal offence.

“This lack of monitoring gave rise to the scourge “The legislation became very clear on what
of fronting throughout the country. It could not be should be considered criminal conduct and what
dealt with because there was no mechanism to deal it is that can be monitored in order to improve on
with it.

“In 2013, parliament passed amendments to the
Act, to deal with those gaps that were identified by
that review. Part of that was the creation of the
B-bBEE Commission as the regulator to monitor
and ensure that the legislation is implemented
properly, so that we as a country are able to
achieve our objectives, the reason this legislation
was set up.”

However, because of bureaucratic government
processes, the B-bBEE Commission was only
established in 2016.

“The lack of monitoring allowed for a whole lot
of things that should not be happening under the
guise of empowerment. Because there was no one
who could specifically focus on these things, and
also the legislation was not quite clear on what
should happen and what should not happen.

“Among the critical 2013 amendments, in
addition to the establishment of the B-bBEE
Commission, was the inclusion of the provision to

54 E M P O W E R M E N T

POLICING B-bBEE

what empowerment is in this country,” “The B-bBEE Commission plays an important role in
Ntuli explained. monitoring the successes and failures of BEE. The B-bBEE
Commissioner, for example, announced that the first person
The issue of fronting was raised as a concern by they will put in jail based on their work to date will be a
the Broad-based Black Economic Empowerment black business owner for fronting.” — Hilton Theunissen
Advisory Council, at their last meeting under the
old administration. The B-bBEE Advisory Council to achieve. “The B-bBEE Commission plays an “The numbers are not satisfactory, but as more
is appointed by the president in terms of B-bBEE important role in monitoring the successes and and more transformation officers become part
legislation to advise the president and government failures of BEE. The B-bBEE Commissioner, for of the board and exco teams, we experience a
on B-bBEE and transformation of the South African example, announced that the first person they positive change.
economy to achieve an inclusive economy. will put in jail based on their work to date will be a
black business owner for fronting. “Corruption and fronting are some of our biggest
The purpose of the last meeting, according to challenges for supply chain transformation in
Ntuli, was to provide strategic direction and share “We also saw the largest ratings agency, addition to the lack of competitiveness, capacity
insights to the contemporary discourse in the Empowerdex, being suspended based on and experience among black-owned companies.
realm of B-bBEE and broader transformation in revelations at the Commission into state capture. Responsible, accountable and transparent
South Africa. “The Council acknowledged that We also know that 90 per cent of verification transformation reporting is on the increase.
fronting was becoming more sophisticated, aided agencies are white-owned,” says Theunissen. “The
by consultants and verification agencies in Aspen Network of Development Entrepreneurs “This too will change the tide, but between
the market. (ANDE) and other reports also suggest that of more 1995 and 2010, the B-bBEE scorecard only
than 450 known transformation or B-bBEE supply benefitted a few.”
“The Advisory Council urged government chain management companies, up to 70 per cent
to finalise the development of regulation for are white-owned. Theunissen says that government “should
verification agencies and B-bBEE practitioners to enforce that all government departments spend
complement the work of the B-bBEE Commission “The B-bBEE Commissioner also reported 50 per cent of their procurement with black-owned
and South African National Accreditation System. that despite government PMFA and B-bBEE small businesses; corporations should transform at
minimum requirements, the government’s least 30 per cent of their supply chain; co-ordinate
“Recent developments such as the collaboration 250-plus procurement agencies purchase from collaboration and co-creation among eco-system
between the B-bBEE Commission and the Auditor- non-compliant white-owned entities. builders; B-bBEE should be transparent and used
General of South Africa on the consideration of as a lever for inspiration and create aspirations
B-bBEE compliance by the public sector were “As an example, she pointed out that the top among black South Africans to start up companies;
shared by the collective,” Ntuli said. 1 000 largest service providers and suppliers of create an environment for skills and capacity
goods registered in the central supplier database development (we are not winning here as the
The Council recognised that “a lot has been are level 8, which is non-compliant.” Setas had R4-billion unspent, for example); 
achieved over the past five years in the economic increase and empower the B-bBEE Commissioner
transformation space using B-bBEE policy as Theunissen says that since the B-bBEE to take transgressors to court, because they
an instrument. Those achievements include, Commissioner “expanded her team and don’t have those powers; enforce penalties on
among them, the implementation of the Black investigation work as well as enforcing the codes, government procurement agencies, but also
Industrialist Programme, which intends to create we’ve seen a higher level of compliance practises. create incentives such as awards for compliance
majority black-owned entities in the productive “We also find more corporate transformation units; create ecosystem task teams to help with the
sectors (of which 138 beneficiaries have been decision-makers are now black individuals opposed creation of implementation plans, development of
supported by the dti), the hosting of the National to historically being white staff. progressive policies and regulations; and finally,
B-bBEE Township and Rural Economies Summit, the government needs to root out corruption”. 
the establishment of the B-bBEE Commission to “This already shows an increase in supply-chain
effectively monitor implementation and progress, transformation initiatives.
the prioritisation of supplier development and
IMAGES: SUPPLIED procurement in the B-bBEE policy to strengthen “The Advisory Council urged government to finalise the
the participation of black businesses in the development of regulation for verification agencies and
mainstream economy”.
B-bBEE practitioners to complement the work of
HOW THE COMMISSION IS HELPING TO the B-bBEE Commission and South African National
DRIVE TRANSFORMATION
Accreditation System.” — ZODWA NTULI
Hilton Theunissen is the managing director of
VP International Partnerships, which works very
closely with an international company called
Growthwheel. “Their core mandate is to transform
the economy with B-bBEE as their level to drive
that change,” he says.

Theunissen has participated, contributed and
led several projects, dialogues and study trips to
accelerate the impacts that the B-bBEE codes aim

E M P O W E R M E N T 55





THCEREABTOINGABRALDARNCOE OINM

Despite the changes at the Johannesburg Securities Exchange (JSE), there is still concern in government
circles about the slow pace of transformation. Ryland Fisher reports

The Broad-based black people, but not South African “I have found that
Black Economic when boards hold
Empowerment black people who meet the
(B-bBEE) the executives
Commission at requirements. There are foreign accountable and when
the Department of Trade the targets are linked
and Industry, monitors nationals who maybe black, but to performance and
transformation at JSE-listed
companies and reports on not black within the definition reward, the change
them annually, based on inputs happens.” — Judi Nwokedi
from the companies. They have of the Act.
found board representation, among Nwokedi, a former senior vice president of Areva
blacks and women, to be particularly low. “The property, tourism, South Africa, says that diversity is about inclusion.
“It’s about the diversity of thought to be innovative,
B-bBEE Commissioner Zodwa Ntuli says the fact agriculture and financial disruptive and to create better products, better value
that they reported on JSE-listed companies does not and better return for all stakeholders,” she says.
mean that other companies that are not listed are Zodwa services sectors do not meet
doing better. “It is just that the reporting requirement Ntuli the minimum requirement of Nwokedi thinks that one of the reasons
is for JSE-listed companies. Our report assists us in 25 per cent for ownership. These transformation has been so slow is because,
measuring because if there is no transformation at while the JSE has set targets (see
the top level of JSE-listed companies then it can follow sectors have such an influence on our JSE-listing requirements), it does
that there is no transformation in the country. not appear to be measured
economy, yet they do not meet the minimum and there does not appear
“It is a concern for us. For instance, with the report to be consequences for
we issued last year, we found that black ownership basic requirements. transgressors. If you do not
has regressed from about 32 to 27 per cent, but also in have consequences, change
terms of board representation, the number of women, “On skills development and management control, will not happen.
and black women in particular, is very low. This is She believes that leaders
a concern because, after 25 years of democracy, we companies are not even meeting 50 per cent of their and share price drive change
are still at a level where the majority of the country’s and the boards need to deliver
population is not represented proportionally in the target, meaning that it is unlikely that there will be the change. “I have found that
decision-making structures of companies. when boards hold the executives
succession into executive ranks because employees
“This reflects the ownership patterns as well. accountable and when the targets are linked
Ownership patterns are not changing. If they are, need to develop their skills to be able to take up to performance and reward, the change happens. You
it is at a slow pace. It is something that should be need to set targets and hold leaders accountable for
worrying us because, after a decade, we should not management positions.
be regressing.
“When skills development and enterprise
“Black females have also regressed. What we have
picked up is that at the management control level of development is not being developed, it
the JSE-listed companies, there is the trend of having
impacts on the extent to which the

ownership patterns can change

because the value chain is not

being addressed thoroughly,”

says Ntuli.

BUSINESS NEEDS TO BE
MORE REPRESENTATIVE

Judi Nwokedi, the general

secretary of the Black Business Judi
Council, believes that there is Nwokedi

huge room for improvement on the

boards of JSE-listed companies. “The

numbers are not where they should be, not

by a long shot. In my nuclear days, the clear lack of

black women was stark and this has not changed.”

58 E M P O W E R M E N T

DIVERSITY

results. It requires closing gender gaps in hiring and “What is important is how existing boards are looking at
promotions, especially early in the pipeline when diversity, all diversity, within their organisation. This
women are most often overlooked. It means taking applies at board level, executive, senior management, all
bolder steps to create a respectful and inclusive the way down the pipeline and across to suppliers and
culture so that women — and all employees — feel
safe and supported at work,” says Nwokedi. other stakeholders.” — COLLEEN LARSEN

IMAGES: SUPPLIED HOW DIVERSE IS CORPORATE SA TODAY? Larsen adds that there is not one biological relationship, and natural capitals. In recognising the
environment that does not benefit from variation and importance of the holistic nature of what King IV —
Colleen Larsen, chief executive of Business Engage diversity. “Diversity is readily accepted in the various acknowledged as a world-leading concept — is seeking
and president of the 30% Club Southern Africa facets of the business world now, from the JSE-listing to achieve within organisations, then boards will
(30% CSA), which is a global campaign with 11 requirements (see JSE-listing requirements) to the almost by default open up to the benefits of a more
chapters worldwide that aims to achieve a minimum United Kingdom: The Enhanced Code of Conduct diverse ecosystem.
of 30 per cent female representation on executive for Executive Search Firms, that the question about
boards globally, says the question around diversity whether or not diversity is relevant or integral, really “It is working at a raising of consciousness rather
now should focus on where SA companies are should become redundant. than a rote exercise. As always, the aforementioned
heading to; what path are they on. “It is accepted that comes with the proviso that whatever is considered
globally women in the boardroom are starting from “King IV refers to the ‘triple context’ of the has to make business sense.
a low to very low base, so to discuss the current combined context of the economy, society and the
status tends to divert attention from where the focus environment in which the organisation operates. “The company has to understand corporate
should be. It notes that context is in the singular as these gender intelligence, which I define as ‘the aptitude
dimensions are intertwined and should be viewed as of an organisation to acknowledge the business
“You can’t do anything about the past, but you can an integral whole. This context is further portrayed case for gender mainstreaming and the ability to
do plenty about the future. What is important is how by the six capitals model, which identifies financial, acquire and apply the necessary knowledge,
existing boards are looking at diversity, all diversity, manufactured, intellectual, human, social and skills and processes to harness such qualities’,”
within their organisation. This applies at board Larsen says.
level, executive, senior management, all the way
down the pipeline and across to suppliers and other
stakeholders,” she says.

Colleen JSE-LISTING REQUIREMENTS
Larsen
Zanele Morrison, director of marketing and corporate affairs at JSE Limited, says that in 2016, “the
JSE introduced listing requirements where companies must have a policy for the promotion of gender
diversity at board level and disclose their performance against it”.

According to a research report published by the 30% CSA and industry partners released in
November 2018 on the state of gender in companies listed on the JSE, of the 267 companies considered,
only 10 per cent had gender parity (50 per cent female board representation). Despite the amended
JSE-listing requirements, 50 companies did not specifically report on board gender diversity in their
integrated reports.

Based on the gender policies published in the 2017 integrated reports, the research report also states
that it was evident that of the 217 companies that reported on gender at board level, it is assessed that
there are currently opportunities for 84 women to join the boards of 62 of these JSE-listed companies
over the next few years. By far, the majority of opportunities are for one or two women to join a board
(94% of the companies). The exception is Stellar Capital, which seeks to go from 10 male and no female
board members to gender parity, giving an opportunity for five women to join that board over the long-
term. “These opportunities assume that South African companies do not get caught in the “Golden Skirts”
syndrome where a few, usually politically well connected, select women are appointed to multiple
boards at the expense of other women,” Larsen says.

The report analysed publicly available information from 267 companies’ annual reports for the
reporting period 1 January 2017 to 31 December 2017. As a secondary consideration, the research
considered if there is any effect on the appointment of women to the board as a result of the rotation of
non-executive directors in terms of the JSE-listing requirement Schedule 10.16(g).

Larsen says that this research is the first of its kind and will be used as a very objective baseline to
measure future progress. “Future research should begin to identify the process that companies took in
deciding what the level of gender balance was and how they sourced and decided on their new board
appointees,” she says.

E M P O W E R M E N T 59