Three trade unions in the chemical sector have announced that they will embark on a march to the specialty chemicals group AECI’s head office over its black economic empowerment (BEE) employee share scheme “failure”.
In a statement, the General Industries Workers Union of South Africa (Giwusa), Chemical, Energy, Paper, Printing, Wood and Allied Workers’ Union (Ceppwawu), and the South African Chemical Workers’ Union (Sacwu) said on Wednesday that they planned to hand over a memorandum of demands on Thursday, over the BEE Employee Share Trust Scheme that was set up in 2012.
According to the unions, AECI established a BEE employee share scheme whereby the BEE shares would convert to ordinary AECI shares after a period of 10 years. For this purpose, the AECI Employee Share Trust (EST) was set up.
“AECI has now informed the black employees that the EST has no value and therefore there will be no conversion of the BEE shares into ordinary AECI shares. Furthermore, the black employees will not be compensated for participating in a failed BEE scheme,” the unions said.
According to the unions, the implication is that the BEE shares scheme has failed, and no black economic ownership of AECI has materialised.
“AECI over the past 10 years operated and traded in the mining industry on the basis that it has a credible BEE share scheme in place. But this was fiction,” the unions said.
Giwusa general secretary, John Appolis, said AECI workers were allocated a certain amount of shares and depending on the formula, they would get ordinary shares after 10 years.
“That period expired at the end of February, this year and then they extended the life until February, 2023. We held meetings with the company and also the trustees of the scheme. What they said was the scheme has no value anymore, so there’ll be no conversion of those AECI shares into ordinary shares. So that’s the first problem,” he said.
According to Appolis, when AECI employees passed away during the 10 years, their beneficiaries were paid out.
“They cashed in those shares, and exited the scheme through the unfortunate process. The current employees are saying either AECI comes up with a new scheme or compensates them for the past 10 years because the company benefited by having a BEE employee share scheme, and therefore they should also benefit as employees,” he said.
Appolis said the unions will give AECI until Wednesday to respond to their memo-randum of demands.
“Our members are planning to strike on this matter. This is just a process of forewarning the company that if they don’t come up with either an alternative scheme that incorporates the value of the same scheme or compensates workers, then there is going to be a strike there.
“This is cutting across all black employees. It is not only union members who are upset about this, workers feel deceived by AECI,” he said.
AECI was unavailable for comment at the time of publication.
In its company results in June, 2011 the AECI board said it had pursued the B-BBEE transaction that was initially contemplated in 2009.
“Two B-BBEE transactions are currently being proposed to shareholders: the acquisition of the Kagiso Tiso Holdings consortium’s shareholding in AEL Mining Services, in exchange for ordinary shares in AECI and the issue of new shares to facilitate the establishment of an Employee Share Trust and a Community Share Trust,” the group said at the time.