Lindsey Schutters came out swinging against the Institute of Race Relations (IRR) in his article, “Why Malatsi believes bypassing BEE rules for Starlink is good for SA”. Schutters claims that the IRR has peddled a “lie”, and set an “ideological trap designed to manufacture consent”. He says the IRR’s opinion polling is so bad that calling it “flawed would be an understatement”.
Shoh. Strong words against the IRR. How will we ever survive such an attack? If serious people took Schutters seriously someone would be fired, or some organisation would take a major reputational hit, or both.
But fear not, nothing bad has happened to the IRR, and the reason has to do with the question of evidence. Does Schutters provide any evidence to substantiate his aspersions? No.
Still, Schutters’ unsupported attack exposes more than his own lack of credibility; it also exposes the deeper vulnerability of Black Economic Empowerment (BEE) at this historic moment, the moment when BEE is beginning to crumble institutionally, long after it crumbled in popularity.
Historic cutback of BEE
Communications minister Solly Malatsi has issued a policy directive that, in effect, orders a subsidiary regulator to cut back part of BEE. This is a major first in government action to repeal a part of BEE.
Cutting parts of BEE has happened before. Finance ministers have granted BEE exemptions for particular projects, and the Constitutional Court struck down a set of BEE regulations. Separately, the Zondo Report advised “maximum value-for-money” over other considerations (including BEE) in public procurement.
But for all that, Minister Malatsi’s directive is probably the clearest, and most sweeping Cabinet action to cut back BEE, ever.
There are important limits to Malatsi’s directive. He has not gone as far as he could to scale back BEE. Also, the repeal is limited to new investors in the communications space.
Still, the reasons Malatsi gave in his policy directive set a precedent to phase out BEE over time completely. The directive states that Icasa’s tightening of BEE in 2021 and 2022, which it subsequently maintained through erroneous legal arguments, has (with added emphasis) “resulted in enormous costs to the industry, the exclusion of potential investors in the sector, and limitations […] that are probably impeding the provision of national broadband services and efforts to connect the unconnected”.
The IRR has said exactly that, repeatedly, for years, and IRR Legal officially submitted to Minister Malatsi’s department (in the drafting process of his directive) that he should exempt from BEE “any type of electronic communication service, network or network service, in which a company is able to demonstrate impedance to investment due” to BEE.
Malatsi’s forceful conclusion is that when BEE is holding back investment and opportunities it should be cut. Follow that precedent for a decade or two and eventually there will be no BEE at all.
Malatsi is a Democratic Alliance (DA) member. But his sentiments about BEE are not limited to the DA. I have personally reached out to several African National Congress (ANC) members over a number of years encouraging a phase-out of BEE. There are many reasons, but one is pure politics. As Schutters notes: “73% of ANC voters don’t support BEE policy, according to the Institute of Race Relations’ latest survey”.
My pitch to the ANC is – if you want to reverse your party’s decline, cut back BEE.
Popularity of cutting back BEE
So, how does Schutters push back?
He attacks the legitimacy of Malatsi’s directive by creating the false impression that Malatsi is acting under foreign influence against the preferences of the South African people. He called the BEE repeal directive the “latest bending to Elon Musk’s will” and wrote about BEE as a “non-negotiable sovereign imperative”.
Would any of this make sense if phasing out BEE were popular, specifically among ANC voters? No, not really.
So, to attack the legitimacy of Malatsi’s partial BEE repeal, Schutters attacks the IRR’s polling.
“Let’s start with that 73% figure,” Schutters writes, “because it is the foundational lie upon which this new policy house is being built.”
For the IRR to be lying, the 73% figure would have to be false. So, how does Schutters try to show the statement to be false? He refers to a Stellenbosch professor’s claim that “a critical failure” is that “the survey only polled registered voters”.
First, why is that a “critical failure”? Registered voters are a smaller, and older group, than eligible voters. But they are also a key group for tracking political pressures. That is why international pollster Ipsos explained here, for example, that “in the data-processing stage, the results are filtered by those who are registered to vote” [emphasis added].
Here is another case, where YouGov (also an internationally respected pollster) did polling “interviews with registered voters” in the UK. Here is one more registered voters poll, pairing with The Economist, in the US.
When focusing on electoral pressure, it is standard to focus on registered voters.
But second, and in a way more important, is that even if there were some reason to think it was inappropriate to focus on registered voters, how can the 73% figure about ANC voters be a “foundational lie”?
It cannot be a lie. All past ANC voters are a subset of registered voters, and these are the people whose mandate the main party that is in partnership with Malatsi’s party carries.
So much for the “foundational lie”. Next, Schutters accuses the IRR of setting an “ideological trap” in the way it designs questions. He is referring to a question that has drawn the clearest anti-BEE view in South African polling history, which was stated as follows:
“The government spends over a trillion rand per year buying goods and services. How should it decide who to buy from?”
The possible responses people were asked to choose from were as follows (with weighted results shown in brackets):
- The government should buy on a value-for-money basis, making sure to buy the best product from any company at the best price without overpaying (54.1%).
- The government should buy on a value-for-money basis, making sure to buy the best product at the best price. If two companies are tied, the black-owned company should get the contract (27.1%).
- The government should buy more from black-owned companies, even if it means paying more and getting less value for the same money (16.6%).”
Overall, this shows an over 80% preference for cutting out what senior Treasury official Willie Mathebula calls BEE “preference premiums”. On the other hand, there is only a 17% preference for keeping the existing system that pays BEE premiums.
Rather than face the fact that BEE premiums are unpopular, Schutters challenges the polling by falsely claiming that respondents “were asked to choose between ‘value for money’ procurement or buying from black-owned companies”.
As you can see from the question, that is plainly not true. Going for value for money often means buying from black-owned companies, because those are often the best. But concepts like “true” and “lie” don’t seem to matter much to Schutters, as long as he’s bashing polls that expose BEE’s lack of popularity.
The great irony is that the IRR report leaves significant room for improvement that Schutters would have noticed if he had tried, as do other polls that deserve some serious criticism in order to get better.
Bigger picture
The bigger picture is bleak for BEE defenders. The News24/Ipsos poll (which covered eligible voters) from earlier this year found 36% of respondents want to “end BEE”. Only 44% want to “keep enforcing BEE”.
More recently, a poll by the Institute for Justice and Reconciliation (which also covers everyone, not just registered voters) showed most South Africans strongly agreed, or agreed, that BEE “should be phased out”.
BEE’s popularity has crumbled. Its institutional backing is now crumbling too. That puts anyone who thinks BEE is a must in a tough spot. Expect more false allegations of “lies” from people in that spot.
Meanwhile, the IRR will continue to be a leading force to connect the unconnected, and to give a voice to the voiceless, as the rainbow republic climbs the many more hills on the route towards freedom from BEE. DM
Crouse is executive director of IRR Legal, and a Fellow at the Institute of Race Relations (IRR)