BEE Partner, South Africa Economy Watch

South African local Chinese are in the “black people” which is designed to benefit previous apartheid disadvantaged groups. Are they are fully black now? Do they really benefit all the advantages of BEE Act? According to the report this morning, Chinese are not fully black.
Johannesburg – The National African Federated Chamber of Commerce and Industry (Nafcoc) has slammed a high court ruling that defines Chinese South Africans as black and gives them the full benefits of affirmative action legislation, claiming the black economic empowerment (BEE) “cake” was too small to share.

Buhle Mthethwa, the president of Nafcoc, said on Friday that the spoils of BEE were the motivation for the case brought by the Chinese community.

She challenged the assertion by the Chinese Association of SA (Casa), which brought the case before the Pretoria high court, that the litigation was about lack of recognition and clearing up of misconceptions of the historical injustices the community had faced, and not about economic activism.

The landmark ruling gives the full benefits of employment equity and broad-based BEE legislation to Chinese people who were citizens before 1994.

“The defenders of the ruling, including members of the Chinese South African community, that were interviewed in the media have said this is not about BEE deals,” Mthethwa said. “This cannot possibly be true when you look at the number of Chinese-owned enterprises that we have in the country already. They show a people who, given half a chance, would want to strengthen their foothold in the South African economy.”

She said broad-based BEE had not yet fully benefited Africans whose lineage could be traced back 30 generations.

“We have always argued that the BEE cake is too small and really only benefits a few, that we need an environment that is capable of baking a bigger cake that will be cut into many more slices so that more people can benefit.

“Broad-based empowerment is a concept that has not really filtered down to your man on the street, to that entrepreneur in the township who would also one day like to see himself as an A-list business person,” said the Nafcoc boss.

She said Nafcoc had fought for 44 years for an economic climate that was inclusive of African small, medium and micro enterprises, and it was justifiably worried about what the ruling would mean in practice.

Mthethwa denied Nafcoc’s attitude could be construed as being xenophobic, saying the chamber was prepared to argue with anyone on the issue.

“Where does it end? What about the Italians and what about the Portuguese? Are we going to broaden the definition to include them,” she asked.

Patrick Chong, the chairman of Casa, the non-political organisation which took the government to court over the classification, fully agreed with Nafcoc that only a few had benefited from BEE and that these were not the ones that the government had intended.

“However, the businesses that people see are South African, not Chinese. Their owners have nowhere to go but South Africa. Some of them have been here for more than 150 years,” he said.

“We want to transform this country. We need to stand together and come up with strategies that will benefit the working class of the country.”

The government did not oppose the challenge to its BEE legislation, which had excluded the Chinese as beneficiaries of affirmative action.

It is estimated that there are roughly 10 000 Chinese in South Africa who could qualify.

Chong said the court action was not aimed at gaining wealth through BEE deals. “We took up this action way before BEE was legislated in 2004.”

Under apartheid, Chinese were classified as coloured. They could live in white residential areas but only at the behest of their white neighbours.

The confusion over the racial classification led companies to exclude Chinese from their empowerment schemes.

Sasol’s multibillion-rand Inzalo BEE deal specifically excludes Chinese. Under the heading, “Who is not Black“, it says: “South African citizens who were regarded as coloured before April 27 1994 but are of Chinese origin.”

Vernon Whyte, a Chinese South African, challenged Standard Bank, his employer, when he was excluded from a BEE share scheme in 2004.

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