BEE is ruining South Africa economically, socially and politically. The Zondo report said race-law is at the heart of corruption in the public service, because it undermines the merit principle and creates confusion that bad actors exploit. Merit is the best medicine. But Minister Thulas Nxesi promised “more aggressive” BEE and now Dis-chem is delivering.
A leaked document revealed that Dis-Chem implemented a moratorium on hiring whites, especially at senior levels, to improve its employment equity profile and avoid potential fines ranging from 2% to 10% of annual turnover. But the majority do not want this.
In 2020 the IRR commissioned an independent expert to conduct a nationwide, demographically representative, statistically significant survey of South Africans’ divergent opinions. Almost 15% of white respondents endorsed a Dis-chem-style policy of hiring “Only blacks”.
By contrast 80% of black respondents preferred “appointment on merit”. At least 80% of respondents within each race group preferred the merit principle. This is the way forward. Dis-chem is going backward.
But Dis-Chem is under pressure and it is not alone. It does not help to break or bankrupt Dis-Chem. Instead decent South Africans need to stand up and save that pharmacy from the institutionalised racism it is now trying to implement. Dis-Chem is bending the knee to race-law. Instead, it must stand up and be part of the solution. Join the call to make that happen.
Dis-Chem’s moratorium is inconsistent with the Constitution, which identifies ‘non-racialism’ as a founding value of South Africa's democracy. In addition, it contradicts the equality clause (Section 9), which bars the private sector from unfairly discriminating against people on the basis of their race – and says that any discrimination on racial grounds ‘is unfair’ unless the contrary is proved.
Two flawed Constitutional Court judgments (handed down against government departments, rather than private companies) have seemingly sanctioned the rigid racial quota that Dis-Chem is applying. But these rulings overlook the three-fold test for the validity of race-based affirmative action measures laid down by the Constitutional Court in the Van Heerden case in 2004.
According to the Van Heerden ruling, ‘authorised remedial measures’ must meet three tests: they must (1) target the disadvantaged, (2) be designed to advance them, and (3) promote the achievement of equality.
Dis-Chem’s moratorium will not ‘target the disadvantaged’. If anything, it will benefit the most skilled and politically connected group within the black population. By contrast, the great majority of under-educated, poorly skilled, and often unemployed black South Africans will not gain at all.
Second, Dis-Chem’s moratorium must be ‘designed to advance’ the truly disadvantaged. But it will instead harm them, as the merit principle is jeopardised and the gross inefficiencies already evident in the public service percolate into the private sector too. This will reduce competitiveness, limit growth, and worsen the unemployment crisis.
Third, Dis-Chem’s moratorium will not promote the ‘achievement of equality’. Instead, it will further increase the gap between a small black political elite and more than 11 million black South Africans who remain jobless and destitute. This intra-black gap is the main cause of rising inequality since 1994.
Dis-Chem’s moratorium cannot satisfy the three Van Heerden tests and is unconstitutional.
It is time for Dis-Chem and other companies to take a stand. If remedial measures are to benefit more than a small black elite (what India calls ‘the creamy layer’), they must bring down the real barriers to genuine advancement of the poor. These barriers include dysfunctional schooling, collapsing public administration, escalating blackouts and ‘water shedding’, and countless policy obstacles to the investment, growth and employment that offer the only sure path to rising prosperity for all.
