before the law, and opens the way to racial scapegoating. South Africa, of all countries, should know the risks here. The ANC is also well aware of them, as it made clear in 1994 when it warned that affirmative action, if poorly implemented, could ‘redistribute resentment … and destroy social peace’.
Overall, BEE in all its diverse aspects has become very different from the limited measures advocated by the ANC back in 1994. Yet critical assessment of this shift in policy and practice has largely been lacking. This book aims to fill that gap. By bringing all the relevant material together, it seeks to make it easier to grasp all the BEE rules, assess the impact they have had, and understand the bigger NDR picture of which they form so vital a part.
Anthea Jeffery
Head of Policy Research and Dick Gawith Fellow, IRR
1. The Rationale for Racial Laws
South Africa has arguably the most comprehensive and challenging affirmative action policies of any country in the world. The relevant rules cover not only affirmative action in employment and procurement but also land reform and various other components of black economic empowerment (BEE). Such policies have steadily expanded in the 20 years since April 1994, when the country’s first all-race general election brought the African National Congress (ANC) to power as part of a government of national unity committed to providing redress for decades of statutory racial discrimination.
Racial discrimination under the National Party government was profoundly damaging to black South Africans. It pervaded every aspect of their lives, confining them to overcrowded rural ‘homelands’ and segregated urban ‘townships’ where housing was cramped and electricity and modern sanitation were rare luxuries. It condemned them to schools where teachers were under-qualified and classes overcrowded, and where textbooks, stationery, and other facilities were limited and sometimes non-existent. It precluded them from buying houses or land in most parts of the country. It prevented them from running businesses in city centres designated as ‘white’ areas, while restricting the business activities open to them in townships. For many years, it also barred them from the skilled jobs that were ‘reserved’ for whites.
Statutory racial discrimination thus made upward social mobility infinitely more difficult for black South Africans, since the normal foundations for this – adequate housing, good schooling, skilled employment, property ownership, and business opportunities – were barred to them in whole or in part. Black people were thus dealt major economic blows, while suffering the daily humiliations flowing both from these restrictions and from the pervasive sense of being ‘second-class’ citizens.
At the same time, and even under National Party rule, a great deal of redistribution from white to black South Africans took place via the budget. In addition, from the early 1970s onwards, the pervasive edifice of racial laws constructed by the National Party began to crumble under the weight of its own contradictions. More and more racial laws became unenforceable, while from the early 1970s the government made major efforts to improve black education and housing. From 1979 to 1986, important reforms were introduced as regards African trade union rights, freehold ownership of township houses, influx control, group areas, and the goals of ‘separate development’.
By the late 1980s, ‘petty’ apartheid had largely disappeared, while black people (Africans, Indians, and so-called ‘coloured people’) were increasingly moving into supervisory and management positions in the private sector. In the early 1990s, both government departments and larger private sector employers began appointing more black managers and putting significant efforts into a ‘soft’ form of affirmative action based primarily on training and mentoring and the fast-tracking of black people into more senior positions.1
By the 1980s many National Party (NP) supporters had acknowledged the practical failures and deep injustices of apartheid policies. Hence, though the NP might have been able to cling to power for another 20 years (albeit at enormous cost), the fall of the Berlin Wall in November 1989 instead prompted the state president, FW de Klerk, to unban the ANC and other organisations in February 1990. In 1991 De Klerk followed up by repealing all key remaining apartheid laws, including the Population Registration Act of 1950, under which everyone had earlier been classified as white, African, coloured, or Indian.
In 1992 whites voted in a referendum for the continuation of a reform process certain to result in majority rule and the loss of their political power. In 1994 the political transition took place against the backdrop of 25 years of incremental reform and a dramatic softening in white racial attitudes.2
Enormous backlogs in the living standards of black South Africans nevertheless remained, generating widespread agreement on the need for effective measures to help provide redress and increase opportunity. When President Nelson Mandela came to power in May 1994, it seemed the time had finally come when the country could marry its extensive resources to sound policies, thereby stimulating growth and jobs, improving education and living conditions, and providing a realistic prospect of a better life for all.
In his inaugural address as South Africa’s first black president, Mandela emphasised the importance of racial reconciliation. He paid tribute to De Klerk, saying he had turned out to be ‘one of the greatest sons of our soil’. He said he planned to work together with him to build the country and promote racial harmony. ‘Let us forget the past,’ Mandela said, speaking in Afrikaans. ‘What is past is past … Let us work together to make a great country.’ It was not a time for recrimination but a time for joy, as the dreams of all the millions of South Africans who had suffered so greatly under apartheid could now be made real.3
The same spirit was evident two years later, on 8 May 1996, when the Constitution was adopted in Parliament with the support of almost all political parties. The Constitution identified ‘non-racialism’ as one of its founding values, while the equality clause in the Bill of Rights proclaimed the right of all South Africans to ‘equality before the law and … the equal protection and benefit of the law’. Addressing Parliament in his ‘I am an African’ speech, the then deputy president, Thabo Mbeki, famously said: ‘The Constitution whose adoption we celebrate constitutes an unequivocal statement that we refuse to accept that our Africanness shall be defined by our race, colour, gender, or historical origins. It is a firm assertion made by ourselves that South Africa belongs to all who live in it, black and white … It rejoices in the diversity of our people and creates the space for all of us voluntarily to define ourselves as one people.’4
However, this address was followed on 29 May 1998, a scant two years later, by Mbeki’s ‘two nations’ speech, in which he instead emphasised the racial divide. Said Mbeki: ‘We therefore make bold to say that South Africa is a country of two nations. One of these nations is white [and] relatively prosperous … The second and larger nation of South Africa is black and poor … We are not one nation, but two nations. And neither are we becoming one nation.’5 This speech set the scene for a number of transformation laws requiring a return to racial classification and racial preferences – but this time in the apparent interests of social justice and redress.
The ANC’s case for affirmative action
In mid-April 1994 – shortly before the general election that brought it to power – the ANC summarised the case for affirmative action in employment, enterprise, and land ownership in a policy document entitled ‘Affirmative Action and the New Constitution’.
After the political transition, said the ANC, it could simply ‘confiscate the spoils of apartheid and share them out amongst those who had been dispossessed’, which would have ‘the immediate attraction of correcting historical injustice’. However, this option ‘could not realistically be advanced’ against the background of the negotiated political transition. In addition, it would lead to ‘capital flight, the destruction of the economy, and international isolation’.6
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