NEWS & ANALYSIS

Cyril Ramaphosa and the failure of BEE

Brent Meersman on the businessman and Lonmin's shareholders shaky efforts to explain himself

While Julius Malema jumps up on the bodies of the Lonmin miners to launch his personal crusade against the man who read out his disciplinary sentence for the ANC, Cyril Ramaphosa squirms to explain himself.

Ramaphosa was interviewed on SAFM AM Live this morning (20 September 2012). He faced pointed questions from interviewer Xolani Gwala and came in for harsh criticism from callers to the show. His reputation and stature has suffered a serious blow. The man who recently bid R19.5 million for a buffalo and its calf sounded out of touch with the mood of the country, and his arguments in mitigation were unconvincing and flawed.

Ramaphosa claimed Malema is wrong to say that miners were killed to protect his assets, because the R300 million he'd invested is now "under water". Since his stake underperformed against the price he paid, he claims he has no stake to defend. This is patently illogical. Presumably he made the investment with a view to a profit. Ramaphosa has a 9% shareholding full stop. (Had his hopes materialised would Malema suddenly be right?)

He is a director and sits on the board, but he said, only "as a minority shareholder". In this position "we are actually on the side of our people ... but you cannot wave a magic wand".

What has happened on his watch (both as a company director and a member of the ANC NEC) is that the political will to change working conditions has been muted and stalled for almost two decades, because the political elite have personal investments that have fundamentally shifted their view point.

A talented trade unionist, Ramaphosa played a key role in scoring victories for the mining unions in the late 1980s. With hindsight those successes, although major achievements in their time, won only the absolute basic rights. What was desperately needed was to build on that groundwork and bring our mines in line with international standards. Instead of accelerating demands to reform the industry in the post-1994 period of contrition, the political leadership became entangled in negotiations for BEE deals as an alternative to nationalisation. BEE not only diverted the political leadership, but it sapped the union movement of some of its ablest champions such as this very Ramaphosa.

Ramaphosa said that the positive step to dismantle the hostel system had led to shack dwelling; two steps forward, three backwards. But this surely does not let the mine management off the hook, and it reflects very badly on the ANC government for failure to provide the basic services.

As with the Sharpeville massacre, the people lost patience with the ANC's shilly-shallying and followed a more radical group that responded to them taking the matter into their own hands. Then it was the PAC; this time it was the Association of Mine Workers.

Ramaphosa even went so far as to criticise the Lonmin settlement, concerned that it has sent a signal that violence works, and that the agreement struck may destroy collective bargaining. Despite his rhetoric that this terrible event (at one point he referred to the "incident", at another point a "blip" in international investor terms) is a turning point, Marikana has not been a Damascus Road experience. Ramaphosa it seems is now too blind to see. The collective bargaining is already a failure; it resulted in the Lonmin Massacre, not the other way around.

Pouring cold water on the miners' bloody victory is motivated by Ramaphosas's investor worries about a union operating outside the Tripartite Alliance, and that the Lonmin miners are at loggerheads with the National Union of Mineworkers which Ramaphosa founded and in which the ANC is politically invested. One has to wonder, had these miners been under the COSATU umbrella, would they have been mowed down by the police?

Ramaphosa maintains that nationalisation is highly undesirable. On this issue, in his current position, he is no longer seen as a credible voice. Nationalisation were it ever to come about is highly likely to do much harm in the industry, but the failure of BEE together with its substantial contribution to inequality, has made a very bad old idea popular.

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