Department of Trade, Industry and Competition minister Ebrahim Patel says more than 230,000 employees currently hold shares in 50 companies.
Tabling the department’s budget vote during a mini plenary of Parliament on Tuesday, Patel also said a bill will be prepared within the next three months to set out the modalities for improved representation of worker interests in company decision-making and boards.
He said this as he outlined the department’s vision for the time ahead, which is anchored on integration and forging an inclusive economy.
“What is new in this approach is that worker ownership arrangements should not be in the form of passive dividend-flow arrangements but be accompanied by mechanisms for the voice of labour to be heard in the top decision-making structures in the corporate sector.
“In this way, a greater democratization of the economy can be realised and the stakeholder model of company law introduced by the 2008 Companies Act can be extended by giving a real voice to workers.
“This is an important way in which we can create meaningful economic inclusion. This can be the new frontier of economic empowerment.
“It is not a pipe-dream. Our research has revealed the extent of worker ownership: more than 230,000 workers currently own shares in about 50 companies,” he said.
Patel said for example, the ground-breaking decision by Coca-Cola to appoint two worker representatives – within the next four weeks – will mean there will be a ballot of the 8,000 workers to elect their representatives.
He said Pepsico expects to have a worker representative on its Board by September this year.
Patel said to advance this agenda further, the department’s annual plan will cover a few actions. This includes:
- A Companies Amendment Bill being prepared within the next three months to set out the modalities for improved representation of worker interests in company decision-making and boards;
- The outcome of the register of worker ownership in the SA economy being published on an annual basis and we will work with unions and corporates to improve the funding arrangements to ensure that this model provides for real ownership and a greater say in decision-making;
- Working with tertiary educational institutions to assist in the further education of worker directors and potential directors; and
- A Practice Note under the BB-BEE Act being gazetted today to provide guidance to regulators and clarity in the market on the treatment of broad-based empowerment vehicles, so that worker ownership schemes, community trusts and union investment vehicles are properly recognised for BEE-purposes.
Patel also said promoting black industrialists and small businesses is critical.
“Though we have made progress with BB-BEE, it is clear that we need to bring greater rigour and credibility to BEE statistics and practices and ensure that claims made by firms in their BEE reports are verified.
“This may require adjustments to the reporting requirements. I will appoint an expert panel to review the current BEE Framework in order to address these legitimate public concerns.”
New policy statement on localisation for jobs
Patel said, meanwhile, that to clarify government’s overall approach to industrialisation, the department will today release a Policy Statement on Localisation for Jobs, addressing local product development, cracking down on illegal imports and under-invoicing, and implementing localisation modalities through the joint effort with the private sector.
“This will be complemented by integrated efforts with other Ministries to drive local vaccines development and use of local components in the national infrastructure plan.
“Tariff adjustments and rebates are an important policy instrument available to the state to lower or increase import duties, but in future will need to be accompanied more clearly by binding commitments by applicants to improve their competitiveness, create jobs and price restraint.”