Tuesday, January 21, 2003

Matatha Tsedu's pontificating rant South Africa flunks its first black-empowerment test, big time

about the government's empowerment backdown on the Telkom share issue is unfounded and poorly researched. One would expect that the editor of the country's largest Sunday broadsheet would have at least done some research into why the government backed down on this issue on what I am sure was some sound legal advice. It seems that while our courts may have been in a position to rule in favour of the tiered classification of shareholders it was not clear that the US regulators would have been as sympathetic.
“The union had asked the American government to block the proposed secondary Telkom listing in New York, saying the planned racial discrimination of Khulisa contravened American law and policy
Tsedu's argument fails because he looks at empowerment / affirmative action (insert your buzzword of choice) as something which must reward those who have suffered past wrongs. Essentially a compensation for past suffering. This is not the aim of such a programme - the simplest manner in which any affirmative action can be morally justified is that it's implementation will result in a better (happier and more equitable) society than would exist if the policy were not implemented (utilitarianism - if you want the moral philosophy term for this justification).

The same argument can be quite simply applied to the government backdown. If the government did not back down then there was the genuine possibility the the United States regulatory body (the SEC) would have dismissed Telkom's plans for a US listing. This could well have delayed or damaged the listing process to the extent that the possible net loss to the country would have far exceeded the possible benefit that a few previously disadvantaged individuals would have gained by obtaining their shares cheaper.

The issue of who qualifies as previously disadvantaged individuals is something that can never be decided fairly but I don't think that this is the issue. The issue is simple - the Dept of Public Enterprises was faced with a tough decision between jeopardising the whole listing process by being discriminatory in the share offer process or by appearing to accede to the demands of the (white) Solidarity Union and risk annoying the likes of Tsedu. The government, rightly, chose the lesser of two evils.

On a further note one cannot fault the Solidarity Union, whatever one thinks of their organisational philosophy, for representing the interests of their constituents in a civil, legal and generally undisruptive manner. If all the unions in this country acted in this manner there would not be such a negative feeling in some circles toward organised labour. Tsedu should have at least read something like this: Govt, Solidarity reach agreement on Telkom listing

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