Broad-Based Black Economic Empowerment Bill: voting

Meeting report

ECONOMIC AND FOREIGN AFFAIRS SELECT COMMITTEE
17 September 2003
BROAD-BASED BLACK ECONOMIC EMPOWERMENT BILL: VOTING

Chairperson: Mrs Nkuna (A/g) (ANC)

Documents handed out
Final Draft of Broad Based BEE Bill as voted on 20 August 2003

SUMMARY
The Broad-Based Black Economic Empowerment Bill was passed by the Committee with the Democratic Alliance and the African Christian Democratic Party notifying their objections to the definition of the term "black people". Whereas the ACDP indicated that it supported the objects of the Bill except the definition of "black people", the DA objected to the entire Bill.

MINUTES
The secretary informed the Committee that the Chair, Mr. Tolo was one of the delegates that was representing South Africa at the WTO talks in Cancun Mexico. She therefore asked the meeting to nominate one of the members to act as Chair.

Ms Dlulane (ANC) proposed that Mrs. Nkuna assumed the Chair. This was unanimously endorsed by the Committee.

Mr. October - legal adviser from the Department - informed the Committee that the Bill seeks to establish a legislative framework for the promotion of black economic empowerment. He added that the Bill would empower the Minister to issue codes of good practice and to publish transformation charters. He noted that the country's economy still excluded the vast majority of its people from ownership of productive assets and the Bill seeks to address this historical injustice. Unless further steps were taken to increase the effective participation of the majority of South Africans in the economy, the stability and prosperity of the nation would be severely undermined to the detriment of all South Africans irrespective of race.

Discussion
The Chair invited members with amendments or queries regarding the Bill to table them before the Committee.

Dr. Conroy (NNP) said that the definition of the term "black Africans" is rather problematic especially in view of the previous explanation by the state law adviser to the effect that the term is a generic one, which takes other people like Chinese aboard.

Mr. October noted that the definition of "black Africans" had been a subject of intense debate in the Select and the Portfolio Committee. After serious consideration by the Portfolio Committee it was decided that for purposes of maintaining consistence with the Employment Equity Act, the definition of these terms should be retained.

Dr. Conroy insisted that other legislation should clearly state that the term covers only black South African citizens and wondered why this could not be the case for the current legislation. He pointed out that difficulties could arise if a black American African were to lodge a claim under this law.

Mr. John Strydom - legal adviser - reported that the initial provision did in fact state categorically that the terms 'African, 'coloured' and 'Indians' refers to South African citizens only but following intense discussions around the definition it was decided to drop this description. He explained that it is a norm of international law that a country's legislation bestows a benefit only to the citizens of that country to the exclusion of foreigners and that no foreigner would be eligible to lay claim on an empowerment deal.

Mr. October was emphatic that the thrust of the legislation was to correct historical irregularities amongst South African citizens and not to bestow a benefit to foreigners.

Ms Dlulane (ANC) referred members to the preamble which she said supplied clarity to the contentious issue of definition.

Mr. Lever (DA) questioned the logic of Mr. Strydom's explanation that the law only bequeath a benefit to citizens of a country to the exclusion of foreigners noting that in fact the Constitution which claims supremacy over other pieces of legislation asserts the complete opposite. He pointed out that the constitution would not allow people to be discriminated against just because they are foreigners. He concurred with Dr. Conroy that the definition is problematic and self-seekers could exploit the Laguna that has been created under this law for their own end.

Mr Setona stated that he was very comfortable with the definition. He agreed with the state law adviser's explanatory note that the legislation is specially tooled to address historical realities.

Dr Conroy said that he fully endorsed Mr Setona's views but that for the sake of clarity the definition should be left the way it was originally in order to avoid a situation where foreigners lodged claims in pursuance of empowerment benefits.

Mr. Durr (ACDP) faulted the entire corpus of the empowerment law and lamented that it seemed to favour the very undeserving cases. He singled out the case of Mr. Shabir Shaik whom he said owned billions in contracts and yet he was far from being an empowerment case.

The Chair ruled Mr. Durr out of order and pointed out that Mr. Durr was treading on matters that were sub judica and that such matters would not be entertained in the House.

Mr. Lucas (ANC) agreed with the Chair's ruling noting that the Employment equity law had been in existence for the past six years and if there had been no constitutional challenge to it this far then it was better to leave that definition undisturbed.

Mr. Strydom confirmed that indeed there had been no court challenge against the definition in the Employment Equity law this far. He warned that it would be problematic to disturb the status quo of the definition and that it was advisable to avoid creating inconsistency in the law.

Dr. Conroy expressed strong objections to Mr. Strydom's word of caution noting that the House has amended many pieces of legislation even within a month of promulgation. He refused to subscribe to what he called ' the twisted logic' which, he said, Mr. Strydom was treating the House to.

Mr. October reiterated that it would be very difficult to come up with a precise definition of a coloured, Indian or black Africa noting that the current definition was retained in order to maintain consistency in the existing legislation.

The Chair noted that debate on the question of definition raged during the Departmental briefing to the Committee but the matter was resolved then. She ruled that the Committee would not go back to the issue of definition. She urged those with objections to state so during the formal voting on the Bill.

The Chair then took members through the Bill clause by clause before reading the motion of desirability which was passed with the DA registering its objection to the entire Bill and the ACDP noting objection to the definition of the term " black African". The Bill was then passed.

Mr. Setona noted that the Bill was one of the government's policy watersheds and requested for a full debate which was granted and duly endorsed by the House.

The meeting was adjourned.