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As consultants in the compliance space, we often hear business owners complain that Broad-Based Black Economic Empowerment (B-BBEE) is how the governing party legitimises its corrupt dealings, while saddling real businesses with admin headaches. You probably agree with this sentiment. Have you considered directing your B-BBEE spends towards investigative journalism that exposes that corruption, while letting a consultancy take care of the bureaucratic rigmarole — ensuring you get your money’s worth from compliance points and tax benefits?
This article is hopefully the first in a series that analyses current events in terms of the opportunity businesses have to use their Corporate Political Responsibility funds to influence South Africa through the election season and beyond. Most businesses are already familiar with Corporate Social Responsibility; that’s what they use their B-BBEE spends for. But CSR doesn’t happen in a vacuum. It subsidies government spending, covering up mismanagement and budget shortfalls that are a function of the tax base’s shrinkage. Our thinking is if businesses are going to spend on B-BBEE anyway, why not spend it in a way that addresses the political reasons that B-BBEE remains relevant?
Private business ownership, investigative journalism and B-BBEE have more in common than most people realise. For example, the governing party first adopted B-BBEE as an alternative to nationalisation and expropriation; it was a compromise that allowed economic redress without sacrificing private business ownership. 30 years and many corruption scandals later, the government that’s squandered tax money now needs the National Health Insurance, property expropriation and a host of other policy instruments to make up for the damage perpetrated through an opportunistic and cronyistic implementation of B-BBEE. That administration is tightening employment equity legislation and paying civil servants far beyond the value they’re providing. Investigative journalism has maintained a true ledger of the fruitless and wasteful expenditure that’s brought us here, shielding the public from being gaslighted into accepting policy proposals and manifestos that turn lawlessness into law. A powerful example of this is when investigative journalists uncovered the abuse of B-BBEE and procurement processes by politically-connected individuals. Those individuals pre-empted media narratives about their corruption by hiring PR firm Bell Pottinger to create a racially divisive narrative. This narrative scapegoated so-called White Monopoly Capital for the extension of apartheid’s legacy. This campaign deflected attention from corrupt practices by portraying legitimate calls for good governance as anti-transformation. Funded by the wrong people, media and PR platforms use propaganda to make foul seem fair and fair seem foul.
There’s also a poetic justice to repurposing the policy instrument the governing party has hitherto abused and lied about. As the biggest procurer of goods and services, government is in a unique position to set the tone for procurement and training practices that advance or destroy innovation and industrialisation. This is why each parastatal has its own B-BBEE scorecard. What happened instead is that since B-BBEE can be a tie-breaker in numerous contracting decisions, numerous procurement officials worked with their friends to reverse-engineer the system so they could use B-BBEE and empowerment deals to land government contracts. This is meticulously discussed in the Zondo Commission Report. The result of this corruption is value was leached from the public; B-BBEE lost its incentivising power to those businesses that weren’t politically connected. That’s why they’re cynical about it; it’s why B-BBEE is a dead weight for them. Far from weakening the governing party, this left them with a “good story to tell” because they continued sounding like the biggest proponents of transformation while blaming the same white-owned businesses (whom their cronies had crowded out of the procurement value chain) for the slowness of transformation. They got to have their cake and eat it.
You may be thinking, “It’s no use. South Africans don’t vote, or if they do they don’t vote with the economy in mind.” These self-fulfilling prophecies can be disrupted in their tracks when we understand that people only keep the economy in mind to the extent that it’s within their reach. Economists like Dr. Baroness Dambisa Moyo have long said what researchers have known: people will protect democracy and hold politicians accountable if they have a tangible, current vested in the economy; this is often the case for the middle class. Once their survival questions are sorted, they’ll develop line-of-sight on the economic and political variables that help them maintain the living standard they have — through well-funded media, of course.
But by abusing transformation legislation and depriving South Africa’s black majority the benefits of good-faith B-BBEE implementation, the ANC has, counter-intuitively, shielded itself from accountability. Hungry people don’t have the internet connectivity to open news links or subscribe beyond paywalls. This means that whether B-BBEE is retained by the next government, or traded for another policy instrument, the administrative hygiene of that government can only be maintained by the good-faith implementation, not necessarily of transformation legislation, but of transformative initiatives.
In conclusion, businesses can earn B-BBEE compliance points for funding investigative journalism. In the instalment that immediately follows, we’ll draw out how businesses can leverage the connection amongst things like voter turnout, press freedom and private property ownership to sustainably protect their own interests. Until then, please fill out the form that follows so we may facilitate your contribution to a news platform of your choice. At the end of the form, there is also an option to attend or even host events where the benefits and technicalities of using B-BBEE contributions to fund investigative and analytical journalism will be further unpacked; please select these if you are not yet certain about this proposition and would like to hear more first.
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