Pick n Pay’s Ackerman lambastes SA’s legislative changes on Employment Equity Amendment Act

Pick n Pay chairman Gareth Ackerman. Photo: Supplied

Pick n Pay chairman Gareth Ackerman. Photo: Supplied

Published Jul 20, 2023


Pick n Pay chairman Gareth Ackerman yesterday lambasted the government's legislative changes on the Employment Equity Amendment Act, which he said threatens private employers if they fail to employ a workforce mirroring racial demographics.

Speaking at the group's annual general meeting held on Wednesday, Ackerman said: “It’s been hard to stay positive about the future of SA for a long time now”.

He said the act would have the effect of making large numbers of qualified people unemployed and substituting them with unqualified people.

“It is very probably unconstitutional and could ruin many productive companies and foreign investments on which the economy depends.

“I cannot understand why our government has not caught up with the times,” Ackerman said.

He said the Act tried to force on business by decree an outcome that most large corporates were already doing their best to achieve.

“Not because they’ve been instructed to do so, but because of the growing recognition that a diverse workforce and leadership is a strategic asset. This is the very foundation of ESG principles that most companies are following with vigour and energy," Ackerman said.

Pick n Pay had spent over R50 billion on black economic empowerment (BEE) businesses during the last financial year – a factor of 8 ahead of any other retailer.

“Commitment and transparency should be favoured over punitive legislation. I am proud of PnP, once again achieving level 5 BEE status,” he said.

According to the government, among its key provisions, the amendment Bill empowers the Minister of Employment and Labour to set employment-equity targets for economic sectors, as well as regions where transformation is lagging.

“The amendment Bill also empowers the Minister of Employment and Labour to regulate compliance criteria to issue Compliance Certificates as per Section 53 of the Employment Equity Act.

The amended act allows the Minister of Employment and Labour to set regional targets given that racial diversity in South Africa often has regional differences,“ it said.

Ackerman said the rolling of blackouts, surging crime, criminal cartels, the breakdown of the country’s logistics capacity, the burning of trucks, and a diplomatic stand-off with Pick n Pay's biggest trading partners have quelled any thoughts of an early economic revival.

“In yet another very worrying development, the new provision for race-based water rights has huge potential to impact food security. There is no line of would-be black shareholders with the necessary capital to purchase this required equity in farms.

“This could ruin or close many of our farms and undermine the value of all existing farms, thus also creating a banking crisis.

“At a time of high food inflation and unemployment, I can’t believe the government would propose policies that would close down productive farms and businesses, and in doing so increase food shortages and food prices,” Ackerman said.

He said: “Yet we have to guard against those two temptations – fatalism on the one hand, and false hope on the other.

Fatalism will not help us because it amounts to an acceptance of the way things are.

“And if we accept the current state of affairs, then the downward spiral we’ve been on can only accelerate. Blind optimism is no good either. It may cause us to overlook the difficulties that must be confronted if we are to get the country and the economy back on track,” he said.

On the bright side, Ackerman commended Transnet for picking a private port operator to co-run the container terminal in Durban.

“Similar progress is beginning to seem possible in freight transport and logistics, and we’ve also seen the unblocking of the broadband spectrum impasse at long last. We saw this week the partnership with Transnet on our ports,” he said.

Ackerman said the second positive development had been the strong growth in the pipeline of independent power projects since the lifting of the 100MW licensing cap.

“More than 4 300MW, equivalent to four stages of load shedding, is set to come onto the grid in the next two years. That is not even counting the impact of accelerated domestic and private investments in small-scale solar generation, supported by tax incentives, and local government initiatives to procure energy independent of Eskom. The consequences of this will ripple through the economy for years to come,” he said.