The view and spirit then was that the poor in SA were being exploited and that it was imperative for the financial sector to provide access to finance, empowerment finance, investment in infrastructure and so on in the interests of bringing real economic transformation to South Africans.
By October 2003 we had a draft FSC adopted voluntarily by the industry with these objectives in mind. It was recognised that the charter's targets were low, but there was commitment and mechanisms to review these starting in 2006 with women targets.
The gazetting of the Codes of Good Practice in February 2007 aided the review of these targets as part of the alignment process. It was always the intention and spirit in the FSC council to align with the principles enshrined in the codes, while recognising the unique aspects of the charter and the central role this sector plays in the economy.
In November 2007, consensus was reached on all the other elements of the charter, excluding ownership. Despite several attempts and interventions by the relevant ministries, a year later the charter has yet to be gazetted because of the lack of agreement among constituencies.
The ownership issue is, in the opinion of the Association of Black Securities & Investment Professionals (Absip), based largely on the interpretation of the ownership statement in the codes - in particular, the differences of interpretation of "direct" ownership and "mandated investments". It is disappointing that this issue pits "FSC 10% direct ownership against codes' 15% direct target" when in fact both the FSC and the codes have set the ownership targets at 25%.
Most disappointing is that the ownership impasse has overshadowed the agreements reached on all the other aspects of transforming the sector and encompassing a more holistic approach. In addition to being consistent with the codes, they take into account the unique elements of the charter that ensure that transformation of the sector is broadened to black people in general - the majority of whom constitute the poor.
Absip has always maintained that resolution of the ownership provision has to centre on the importance of maintaining financial stability, given the sector's central role in the economy. This could not be more relevant in the current financial crisis, where bailouts of international financial banks have exceeded US$700bn and taxpayers have come to the rescue of shareholders, effectively making the taxpayers owners of these institutions. We are feeling the effects of this crisis. The JSE has lost R56bn in outflows, market capitalisation is down by a third and black economic empowerment transactions, most of them vendor-financed, face serious challenges. We also have shareholders unable to inject necessary capital, putting at risk other shareholders and depositors' funds. Are these factors and issues not obvious to the constituencies of the FSC council? Why are we having the same debate after two years?
If we are all committed to this process and achieving these ideals as we publicly purport to be, then we should find a solution. Instead of our negotiations being plagued by grandstanding, parties not attending meetings to resolve matters, politicisation, walkouts, talking past each other, selective amnesia and unwillingness to view issues holistically, we should seek different rules of engagement.
Holding onto our intransigent positions cannot be correct. As the owners of this process, we should work proactively with the minister of trade & industry to find a solution in the interest of achieving the ideals that we set for ourselves at the Nedlac summit in August 2002.
Nqweni is president of Absip
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