Sakeliga Announces New Pro-Growth, Anti-Racist Campaign

The independent business group Sakeliga has announced a new pro-growth, anti-racist campaign against South Africa’s so-called Black Economic Empowerment (BEE) laws, at a media briefing on Monday morning. According to Sakeliga CEO Piet le Roux, BEE is one of the most destructive policies in South Africa, and that the alternative is for the country to focus more on enterprise, and less on politics.

Politics does not generate wealth and progress, argued Le Roux. BEE is not mandated by the Constitution or by common sense. Instead, it is nothing more than a political policy based on political considerations.

Sakeliga is appearing in the Constitutional Court on Thursday, 25 May, in its challenge to one such political policy: the Minister of Finance’s BEE-tainted preferential procurement regulations.

These regulations are part of a new type of BEE, said Le Roux. Since 2017, a far more radical, exclusionary approach to BEE has taken root. The previous phase of BEE did not benefit previously-disadvantaged South Africans, and this new phase, which is simply about amassing political power, will not either.

Sakeliga is of the view that the finance minister has no lawful authority, in terms of the Constitution or the Preferential Procurement Policy Framework Act, to issue the regulations that he did.

Instead of these regulations, Sakeliga supports a market-driven approach in procurement. 

Sakeliga is joined by Rule of Law Project of the Free Market Foundation, and the Economic Freedom Fighters, as amicus curiae (friends of the court). The EFF’s joining is opposed by the business group because, said Le Roux, they simply wish to play politics in court. Fidelity security and an association of security industry employers are intervening parties in the case.

The new approach to BEE is entrenching the policy as more than a mere policy. BEE is becoming a way of doing things in government. BEE has by now tainted various other areas of law, such as competition law. The more BEE infects other areas of law, the more dangerous and complex things become. 

This makes it more difficult to get rid of BEE, argued Le Roux. It will be a long and layered process to rescue South Africa from this regime that only benefits elites.

Sakeliga will peel back the layers progressively until it reaches the core, foundational basis of BEE, argued Le Roux. 

As a business group, Sakeliga will not accept BEE, despite it being on the Statute Book. The market itself has also never accepted the policy, as evidenced by the inability of government to truly empower the largely-black poor populace over recent decades. Instead, the market must be left free, and people must be appointed, across racial boundaries, on considerations of merit. 

Sakeliga’s strategy is based on three legs: mobilising South Africa’s enterprises against BEE, litigation, and advocating alternatives.

On the litigation front, a R5.5 million legal fund is being formed. Through continuous court action, Sakeliga hopes it becomes clear that BEE must have a sunset clause. It must come to an end. South Africa must then start preparing for a post-BEE world.

Advocacy for alternatives to accepting BEE is also important. The public and entrepreneurs, if they are economically able, must no longer engage with BEE. Where there is legal room to manoeuvre, they ought to so manoeuvre. Enterprises must rather engage in business on a non-racial basis, which is a recipe for success. 

Sakeliga is considering litigation against, among others, the Conduct of Financial Institutions Bill (when it becomes an Act), the proposed Legal Practice Code, the Property Practitioners Act, municipal auctions, and the institution of the Financial Sector Transformation Council, all of which to varying degrees have been tainted by BEE and make doing business difficult in South Africa.