"Do away with sector charters" says Manyi

By Staff Writer


From Business Day
October 9 2007
By Regis Nyamakanga

EMPLOYMENT Equity Commission chairman Jimmy Manyi is at the centre of a new storm over black empowerment, calling yesterday for the abolition of SA’s much-vaunted sector charters which, he said, shielded business from genuine transformation.

His call came as he poured scorn on the latest results of the banking and financial sector review published yesterday, which he said showed the industry was not “sincere” about transforming itself.

The sector charters are the product of long and intense negotiations between stakeholders, and have been developed for, among others, the mining, financial and media industries.

Manyi, who is also the president of the Black Management Forum, said sector charters should be abolished “forthwith” and that all transformation matters should fall under the trade and industry department’s codes of good practice on broad-based black empowerment.

He said if the situation was left unchecked this would render the codes “irrelevant” and reverse the pace of transformation, intended to correct the ills of apartheid.

“Charters have played a very important role in that they provided the basis of drafting the codes and they also helped parties involved to talk to each other about transformation issues.

“But now that we have overarching codes which are meant to harmonise everything regarding transformation, I say we should do away with sector charters as we are not singing from the same hymn sheet,” Manyi said.

He took issue with the banking and finance sector’s employment equity figures, the pace of appointing blacks to key positions, and training and retention of black skills.

Although the Financial Sector Charter Council said blacks now accounted for 26% of executive positions in the sector, surpassing the 25% industry target, Manyi said this fell short of the 40% target in the codes.

Manyi is no stranger to controversy. Earlier this month he said companies were like Irish coffee with whites on top, blacks at the bottom, and a sprinkling of chocolate on top. He suggested that companies not complying with employment equity be fined.

Last month, he called on Parliament’s labour portfolio committee to amend the Employment Equity Act to exclude white women from affirmative action on the grounds that they had benefited disproportionately from the programme. In June, Manyi told Parliament that the skills shortage was an “urban legend” and that white businesses were just ignoring skilled black people.

Yesterday, the principal officer of the financial services sector charter, Enoch Gondongwana, admitted that the financial sector had not done enough to develop and retain black skills.

“There are areas that require attention and these include skills development and learnerships.”

The financial sector was understood to be working on an industry code, to be aligned to the department’s codes.

“In the area of human resources (employment equity), there has been a mixed bag of disappointment and outstanding successes,” Gondongwana said.

Only 18,72% of senior managers in the sector were black, against the industry target of 25%, while 42,85% of junior management positions were occupied by blacks, way below the industry target of 50%.

On skills development, the sector underperformed against a target of 1,5% of total basic payroll on training for black staff.

The sector had decreased its skills development spending on black personnel from 2,9% in 2005 to 1,4% last year, Gondongwana said.

The average direct black ownership of financial services companies had increased to 17,78% last year from 16% in 2005 — on track for the 25% ownership by 2014 set out in the charter.

He said financial institutions had fared well in appointing black directors and black executives.

Blacks now accounted for 37% of directorships in the sector and 26% of executive management positions.

Manyi said: “I am very disappointed with these figures as they clearly show that we have two different discussions about transformation in the country. In fact these figures validate the findings by the (employment equity) commission that the pace of transformation in SA is very slow.”

Gondongwana said the sector spent just over R54bn on procurement, up 40,72% on R15,5bn in 2005, while black economic empowerment procurement grew 21,64%.

He said while support for black-influenced enterprises increased tenfold, support provided to small enterprises owned by black women declined marginally.

Gondongwana said the financing of empowerment transactions by the sector exceeded the 2008 target of R50bn by almost R5bn.

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