Memorandum: To the people of South Africa

From: Dr Dirk Hermann, Chief Executive: Solidarity

Subject: Eskom - the dark side of affirmative action

Introduction

The aim of this memorandum is threefold:

First, the memorandum aims to record the impact of affirmative action on the current electricity crisis. The memorandum deals with how Eskom got rid of experienced and competent staff members, and how this contributed to the fact that a whole society has been plunged into darkness.

The second aim is to challenge the official silence on the link that exists between affirmative action and events at Eskom in order to proceed to engage in sober talks about the future.

In the third place the memorandum wants to warn that the ideology of race representivity, which has seriously harmed Eskom, could also cause irreparable harm to other government departments, municipalities and businesses.

The memorandum aims to take an objective look at what happens when skills and institutional memory are destroyed. The memorandum thus doesn't advance a race argument but responds to an exaggerated race ideology which doesn't take the South African economy and the people in that economy into account.

The memorandum doesn't lay the blame for all Eskom's problems at the door of the organisation's affirmative action policy, but nevertheless views it as a key contributing factor to the present day crisis.

The memorandum doesn't deny the fact that problems existed at Eskom prior to 1994 which, among others, include a tradition of a monopolisation of the supply of electricity.

I have first-hand knowledge of the affirmative action processes at Eskom, was involved in lawsuits on the matter and did academic research on affirmative action at Eskom.

The dark side of affirmative action

Eskom's affirmative action policy had a devastating impact and today, South Africans are paying the price.

Affirmative action at Eskom and the current electricity crisis cannot be separated from one another. There is a direct link between the two but no one wants to speak out.

Meanwhile, ordinary citizens have to pay the price for Eskom's affirmative action disaster.

While no one is prepared to talk about the dark side of Eskom's affirmative action policy, the impact of affirmative action is also hitting municipalities, state hospitals and the SAPS but no one wants to raise that either.

In the past, Eskom took the lead with the implementation of affirmative action in South Africa and was regarded as the market leader in this field. At the time of the adoption of the Employment Equity Act in 1998 Eskom was already implementing affirmative action vigorously.

The Breakwater Monitor, an initiative of the University of Cape Town's Business School did regular surveys of companies' affirmative action plans. From 1992 to 1995 this monitor ranked Eskom among the top three "affirmative action companies". Many companies have started to follow the utility's lead and to implement its affirmative action methodology.

In 1995, three years prior to the enactment of the Employment Equity Act, Thula Bopela was appointed as Eskom's corporate affirmative action manager. According to an article he published on the Friends of Jacob Zuma website, his first task was to assess the race composition of Eskom's staff.

He reached the conclusion that Eskom's management was still predominantly white and male. According to him, he was instructed by the board to draft a plan to up the number of black employees at managerial levels from 10% to 25% before the end of 1996. According to him, the plan he came up with included promotions for and appointment of black employees at managerial level.

In his article he also indicates that resistance surfaced in the form of insisting on years of service and job requirements as criteria for appointment. He was then instructed by the board to appoint black South Africans not according to their suitability for positions but according to the potential they had to grow into the position and to become suited to the position. He states that resistance came mainly from white people as they realised that by transferring knowledge in this way they were digging their own grave.

In 1997 Eskom's acting Chief Executive testified before the Truth and Reconciliation Commission that Eskom undertook to fill 50% of all professional, supervisory and managerial levels with black people by the year 2000.

Eskom's focus shifted from power generation and distribution to race transformation. From 1994 to 2000 changing its race profile became an obsession of the company.

White people no longer felt welcome

The first affirmative action lawsuit Solidarity (at that stage still known as the MWU) was involved in was one involving Eskom. In this lawsuit the trade union represented Sarita van Coller. She was denied promotion in 1997 despite the fact that she was the best candidate for a particular position. Even before affirmative action was legislated Eskom had already been involved in a dispute with Solidarity and the utility was dealt a blow in court.

The first affirmative action case Solidarity brought on behalf of a coloured employee also involved Eskom. In the court case on behalf of Leon Christiaans Eskom testified that there coloured South Africans were less discriminated against in the past and that it was therefore justifiable to appoint a black candidate instead of Christiaans.

In an affirmative action lawsuit in 2000 between the MWU (on behalf of Snyman and another) Eskom testified that affirmative action was part of managers' key performance areas. According to evidence given Eskom sought to fill all externally advertised vacancies with black candidates by 2000.

At this stage, Eskom also offered space creation packages amounting to millions to white staff to free up their positions. Mainly older white staff members, who had been in senior positions, left the company. By Eskom's own witness in the Snyman case, the packages amounted to R800 million. In today's monetary terms, adjusted in accordance with the consumer price index, an amount equivalent to R1,8 billion was paid out in packages.

In 2001 I did research for my master's degree in Industrial Psychology among white Eskom employees. I determined what impact affirmative action had on the alienation of white employees at Eskom. In 2006 I followed up with PhD research on the impact of affirmative action on the non-designated group.

The outcome of the study came as a shock to us all. Alienation levels of white employees were totally unacceptable. A total of 93% of the respondents were of the opinion that promotion was not possible through own hard work. Moreover, 93% were of the opinion that affirmative action determined promotion. An even higher percentage, 96%, were of the opinion that promotion did not occur on merit. A total of 85% felt they weren't part of Eskom's future plans and 75% didn't feel part of the organisation anymore. Of the respondents, 64% were of the opinion that their relationship with black colleagues weakened as a result of affirmative action. More than half of the respondents indicated that they considered leaving Eskom because of limited opportunities as a result of affirmative action. A substantial percentage of respondents (86%) were of the opinion that affirmative action impacted negatively on productivity.

I discussed the results with Eskom's head of human resources, indicating that the alienation level of the organisation's white staff was too high. Transfer of knowledge wouldn't take place; productivity would be impacted; there were worrying signs of widespread depression among employees and a major outflow of skills and competence was to be expected as a result. It was also mentioned to the HR head that the exodus of whites could be explained on the basis of the study and that the operational impact of this exodus on Eskom could be devastating.

As an example of how serious the alienation of a group could be I referred to the documented case of students in India who set themselves on fire in die 1990's in protest to affirmative action. And what was her reaction? In the presence of Solidarity's Eskom shop stewards she replied that we should do so then.

A climate was created in which whites didn't feel welcome. Whites left Eskom in droves. From 1994 to 2002 at least 10 207 white staff members, constituting more than half of the utility's white employees, left its employ.

During the same period, Eskom only lost 546 black employees. From 2002 to 2014 around 15 000 black employees were additionally employed while the number of white employees remained constant.

Skills and institutional memory

The problem is not necessarily that those who left the utility were white but that they were people who possessed managerial and technical skills. Not only skills were lost in the process but also institutional memory.

If 10 000 black employees with experience of ten years or more were to leave the utility today and they were to be replaced by whites with no experience, the consequences would be extremely negative as well. The argument, therefore, is not one about race but one that deals with the consequences of destroying experience and institutional memory, be it that of black or white employees.

Unfortunately, the loss cannot simply be compensated for by skills. Institutional memory and natural intuition that come with experience are needed in a highly technical environments such as the one at Eskom.

The skills loss and loss of institutional memory have a delayed effect - its consequences are only felt years later.

No institution can survive such a loss of skills and institutional memory. Affirmative action hurt Eskom to such an extent it can never recover from it.

The lights aren't switched off in one year. We are now experiencing the consequences of Eskom's status as the affirmative action market leader..

The utility has achieved its transformation goal, but fails insofar as its ability to supply power is concerned. Many thousands of people are in jobs, but the electricity of many millions is cut every day.

That's the dark side of affirmative action.

Issued by Solidarity, March 8 2015

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