Donwald Pressly
The department of Trade and Industry (dti) says a sunset clause for broad-based black economic empowerment (BEE) has not been considered at this stage because the country is far from putting black businesses on an equal footing with established businesses.
Department director-general Lionel October told the trade and industry portfolio committee yesterday that when it was evident that the business environment was being transformed successfully, then it would be time to think about bringing in a clause to end the empowerment programme.
He noted that Malaysia’s affirmative action programme, Bumiputra, had successfully transformed the country into a highly industrialised state and all residents now regarded themselves as Malaysians. After 20 years, the system had naturally fallen away once it had achieved its objectives.
“They achieved it by dealing with the problem of [historic] discrimination,” October said.
However, he stopped short of putting limits on the domestic affirmative action system, first introduced 10 years ago.
“Once you achieve the objectives of mainstreaming the entrepreneurship base… by nature [one] will create a non-racial economy. I can’t say it [will happen] in five or 10 years, although some sectors have made significant progress with regard to BEE.”
While Graham McIntosh, a Cope MP, asked whether a sunset clause had been considered, he noted that the Bumiputra system had driven a number of the ethnic Chinese minority out of Malaysia “to Singapore”, next door.
Bumiputra or Bumputera is a Malaysian term describing the indigenous people of south-east Asia. It means “son of the soil”. It effectively affirmed these people in a society where the Chinese minority had dominated the economy.
McIntosh asked the department if it had “applied its mind” to introducing a sunset clause for BEE because if there was not an end to the programme at some point “the country can’t normalise and be an equal place”. He suggested a cut-off point of, say, 2025.
He also asked whether the department viewed the Broad-Based BEE Amendment Bill, currently before the committee, as being constitutional. The bill aims to halt fronting.
October said the state law advisers had “given a clear opinion that it is constitutional”. McIntosh pointed out that the legislation referred to races that retained their apartheid-era definitions.
But October said there had been a huge debate about the definitions of race drawn out of the Population Registration Act of the apartheid era when the principal empowerment legislation was enacted.
However, the constitution allowed for redress for those disadvantaged by unfair legislation of the past.
Challenged by ANC MP Bhekizizwe Radebe whether the entire Chinese community would benefit from recognition as coloureds, which he suggested would be “dangerous”, the director-general said that when the Chinese community took the matter to the Constitutional Court, the community and the numbers involved had been defined. Chinese newcomers to the country would not, therefore, be able to benefit.