Special Hearings — Business Hearings — 1997-11-11

MR ROSHALT: Mr Chairman, commission members, thank you for this opportunity of expanding on aspects of my submission of the 9th of October.  As I mentioned a bit, my perspective is based on my experiences in the Barlow Rand Group, over 27 years which ended in my retirement in 1990.  Together with my involvement elsewhere, in my personal capacity.  In examining the role of business, leadership in the 1960 to 1994 period, I think it's important at the start understand, and with great respect, Professor Terblanche does not, that business can never be classified as a homogenous entity.  It is made up of individual units, large and small, with many differing policies, objectives and characteristics.  It must be remembered too that during the period under review, there was no such body as 'Business  South Africa' which now articulates the collective business stance on certain issues.  The policies pursued by individual units, differ too, in that they are influenced by the views and actions of their chairman and chief executives.  An examination of the role of individual units of business, thus necessitates and understanding too of the beliefs of the senior executives of those units.
 Now my personal beliefs and policies, during executive service with Barlow Rand, from 1963 to 1990, were basically one, that a full democracy, as opposed to the limited democracy of those times, committed to non-racialism and a free enterprise system was not only morally right but inevitable.  The question in my view was not whether, but when and how this could be achieved in the face of a powerful government determed it should not.  Two, that there should be equal treatment and as far as possible an existing impediments, equal opportunities for every individual, regardless of race.  Three,  that the company had socio-economic responsibilities outside of the work place and four, that companies, and importantly their executives in their personal capacities, had to make every effort to contribute to national, political and socio-economic progress both directly and indirectly through collective business funded organisations.  I believe incidentally, that this still holds and that business has a vital role to play, in helping government make the country work; in particular in passing on management skills to the new institutions.  
 Let me attempt to relate how these beliefs impacted on the views expressed in my submission, but to add the provisor, that in the group as large as the Barlow Rand Group was then, there were inevitably, initially at least, certain individual managements, which did not necessarily pay more than lip service to them.  Firstly then, the general question, did business benefit or lose from apartheid?  No simple yes or no is possible.  It is much too complex a question.  Certainly it benefited in the short term, from a closed and uncompetitive economy, and on occasions from the absence of organised union waged pressures.  But at the same time, it suffered from low productivity, primarily of course due to the apartheid education system, but also because of  70-80%  of the population were denied participation in the national economy, thus severely restricting business' markets.  On balance in the longer term, I would say business did not benefit.  And the effects are still with us today, with South Africa globally uncompetitive and our national structures, particularly at local authority level, largely inadequate due in the main to a lack of practical experience and capacity building in the past.
 Turning now to its role in changing apartheid legislation, and one should add in its encouragement of the achieval of full democracy.  We did not believe, and would not either in the future if similar circumstances should ever unhappily arise again, that one could act successfully by directly contravening the law.  Further the group did attempt to influence change in two ways:  First of all directly in public statements.  In my personal capacity I called publicly on many occasions, inter alia, for government acceptance of the fact that separate development had failed, for the removal of  the Group Areas and Land Act, for the release of detained black leaders, for the cessation of forced removals, for black participation in central decision making, and for meaningful power sharing with blacks.
 I very much doubt whether this made any great impact on government, but never the less the effort was made.  And secondly, by supporting both financially and through the personal involvement of the executives, business funded organisations, such as the Urban Foundation, the Consultative Business Movement, the South African Race Relations Institute, the Legal Resources Centre and others.  All organisations whose efforts were striking, at the very heart of government policies, and which were proving to government, that certain basic tenants of apartheid, were not only morally wrong but were not working either.  I refer in particular, to such fundamental achievements as the governments unwilling acceptance of ninety nine year leasehold tenure for blacks in urban areas and the removal of influx control.  Both of which I would remind you were brought about by business and not political initiatives.
  Did business do enough to influence fundamental changes in the political dispensation?  With hindsight, it may well be claimed that it did not.  Certainly more companies and business leaders could have been involved in the effort.  But in my view, it is very unlikely that the (unclear) government of the day, and its leaders, would have moved any faster than it did.  Let me deal now with business' record in promoting fundamental socio-economic change outside of the work place.  
 This was a much easier sector in which to operate, as there were no legal impediments involved.  In fact companies could, except in instances where statutes were involved, act without any restriction at all.  Barlow Rand as just as one example, and there are many, devoted a hundred and ninety million in its direct social investment programs from 1984 to 1994, principally in the educational field.  It funded for instance, the setting up of trade and technical high schools,  school training centres, and non-racial private schools.  It supported the launch of  a five hundred million rand joint education trust with its uniquely composed board of trustees of a equal number of business and black political educational and union representatives.  Indirectly, it supported the work of collected business funded organisations such as the Urban Foundation, whose area of operation covered housing the low income group, both in policy formation and physical delivery.  Educational initiative, both in practical NGO projects and in policy formulation aimed at the overall reform of the education system, in particular, the abandonment of segregated schooling.  Community capacity building, and the promotion of small black business through the removal of statutory editions.  In 1994, it participated in the launch of the national business initiative, which is engaged in formulating lower income housing policies, in particular, the removal of blockages to physical delivery.  Improving the quality of education in public, primary and secondary schools, through encouraging effective governments by school councils.  The creation of non formal employment and capacity building in local authorities, particularly in the field of financial management.  The question can surely not be asked whether business as a whole, recognised its responsibility in addressing national socio-economic shortages.  It may however, quite reasonably be asked, whether as a whole, it achieved enough.  And with hindsight, I personally believe now, it did not.  And that had it done so, we would have been much further along in coming to grips with a number of our national headaches, outside of the political arena today.
 Turning to business' role in changing workplace relations.  I'm really only able to talk about Barlow Rand's attitudes and performance.  This is a very important subject, because with the government of the days virtual ban on any progress towards black political rights, the only area where any form of democratisation could take place, was in the workplace.  And this is in fact what happened, with the labour movement becoming at that time an important channel for black political aspiration.  The group formulated policies and implemented them in two ways.  As far as it's own employees were concerned, in 1978 it was one of the first South African companies to produce a code of employment practice  in an attempt to introduce and standardise acceptable norms in all its subsidiaries and operations.  One, an undertaking not to establish or acquire business that depended on sub standard wages and employment conditions.  This effectively prevented our investing in the homelands.  Two, the recognition that freedom of association for all employees was a fundamental right.  Three, the recognition of the right of unions, hopefully non-racial, to organise and bargain with individual group companies outside of the official system.  Four, the acceptance of a completely non-racial basis of remuneration; and five, an undertaking to attempt, as far as possible under existing conditions, to ensure equal employment opportunities for all workers.  The code was incidentally approved by the Reverend Leon Sullivan, as being fully  upto the requirements of his own code for US companies operating in South Africa.  It would be trite to say that this code was immediately and enthusiastically accepted by all group managers.  But by constant effort and monitoring, it is I believe fair to say, in time it was. 
   And as far as its relations with organised labour was concerned, the position was understandably much more difficult.  An (unclear) relationship between employer and employee of varying degrees of intensity at different times, was quite normal, indeed inevitable.  Nevertheless, the group recognised in its code, that union recognition was a fundamental right for workers, that would have to be faced.  As a result, the group was one of the first to recognise and negotiate with unofficial, unregistered unions, a move that was unsurprisingly unpopular both with government and a number of peer companies.  As I have suggested previously, these tentative moves were the first manifestations of the eventual full democratic process and it is important to acknowledge again, they took place within the business working place and not the political arena.  As I so closely followed Nafcoc's submission, I shall quote from my written submission on the groups' role in relation to the promotion of black business:
"For many years, business has made efforts to promote black, small black enterprise, as distinct from major black business which is now being promoted by empowerment fields, but it has to be accepted that these efforts, have to a large extent been unsuccessful.  And one of the main reasons of being the (inaudible) of laws and regulations, most of which were discriminatory, that impede would be influenced."
Our efforts in this field were both direct and indirect.  Direct involvement was initiated when in 1980, the company had agreed to take over part of the funding of the Small Business Advisory Service, whose aim was to council black businessmen towards success, so they could generate their income and as the business' grow, provide new viable employment opportunities for others.  In 1986 in a 50/50 partnership with Nafcoc, and at its initiative, Barlow Rand set up Job Creation South Africa, which did much the same work as SBAS, but now in the forms of contracts with sponsors who undertook to pay a set fee for each new viable opportunity created by the clients black emerging business as they were counselled.  Indirectly Barlow Rand supported the law of (unclear) project founded by Leon Louw and Professor Louise Taeger, which researched all legal impediments to black business and was successful in removing many from the statute book while getting some replaced by appropriate legislation.  Nafcoc, for most of its existence had access to constant, unpublicised support from Barlow Rand, and there was a close personal liaison...
 The end of the period I am reviewing, Barlow Rand  added to the support, a very close involvement with Nafcoc's major affiliate, the National Industrial Chamber.  Before hearing the commission' s views on my submission and attempting to answer any further questions, let me attempt to summarise my views.
 As I read the request I received, the overriding objective of the commission, is establish as complete a picture as possible of the causes, nature and extent of gross violations of human rights.  But I personally can perceive no definition of direct human rights violations, which could possibly be attributed to business generally, during that period.  And that the underlying objective the commission has, is to gratify itself on the performance of business in the apartheid area, on both political and social issues.  In relation, to the former, my view is that business certainly could have been seen to have been doing more.  But whether that would have had any effect on a government determined to hold its mistaken philosophy and power at all costs, I very much doubt.  In relation to the latter, economic and socio-economic, I've no doubt whatsoever that a great deal more could and should have been attempted and achieved and that had it been, our situation now, would have been a great deal more acceptable.  I repeat too, that my belief is that this is an ongoing responsibility of business and that this is an opportunity for it to prove wrong those sceptics who do not believe business is part of the new South Africa.  Thank you sir.