So, who are the secret 46 black billionaires minted in mining empowerment deals? That is the question on everyone’s lips.
Last week, this column made public a confidential report into broad-based black economic empowerment (B-BBEE) in the mining industry that had been suppressed since 2015.
It was commissioned to help the Chamber of Mines fine-tune its empowerment policies and demonstrate to the world that mining had met – indeed exceeded – the black ownership targets required by the Mining Charter, which it had negotiated with the ANC.
This should have been an achievement to shout from the rooftops: a triumph of transformation and a stinging rebuttal of those sceptics who decry B-BBEE as a crony-enrichment scam.
Why, then, all the secrecy? The answer is simple: the report is explosive. It shows exactly what the sceptics have been saying for years. B-BEE, as it has been applied, has delivered far more benefit to the few and, especially, the connected few.
Buried in the Chamber of Mines’ narrative of success is the devastating fact that 60% of the value-based B-BBEE benefit went to 46 B-BBEE entrepreneur participants, 29% to 31 community structures representing six million people and 11% to 210 116 employees grouped in 18 employee share ownership plans.
The arithmetic is grotesque. On the report’s R155 billion to R282 billion valuation range, the 60% distributed to the “entrepreneurs” represents an average of R2 billion to R3.68 billion each. The 29% attributed to the community structures works out at R6 514 to R11 852 a head.
The 11% attributed to employees works out at R81 190 to R147 714 each. Or scaled differently again, each entrepreneur could have bought a few hundred Rolls-Royce Cullinans; each employee a second-hand, high-mileage Volkswagen Polo; and each community member could afford a half-dozen tanks of unleaded petrol.
Of course, these are crude averages, not proved cash-in-hand. But that is precisely why transparent disclosure should be demanded. One who benefited is obvious: Patrice Motsepe, the founder of African Rainbow Minerals.
His role in empowerment mining is well documented. The scandal is not that Motsepe is known. It is that the rest are not. Advocate Paul Hoffman, a director of the NGO watchdog Accountability Now, makes the essential legal point that B-BBEE is not a constitutional blank cheque.
Section 9 permits measures designed to protect or advance those disadvantaged by unfair discrimination. “You’re not disadvantaged simply because you’re black, but because you need help achieving equality,” says Hoffman.
So, the public is entitled to know who the “disadvantaged” were.’ Hoffman argues this is why the matter is ripe for investigation by the Office of the Public Protector and also a matter of concern for the South African Human Rights Commission (SAHRC).
The trouble with Hoffman’s suggestions is that both the public protector and the SAHRC have strayed far from their Chapter 9 responsibility of protecting the constitution, to become lackeys of the ANC.
If the Chapter 9 institutions will not do their job, the pressure will have to come from politicians, unions, shareholders, civil society and the communities in whose name this wealth was created – and, perhaps, captured.
