The past year was uneventful as far as black economic empowerment (BEE) is concerned in the health sector. No major empowerment deals were signed and the health-care sector charter was relegated to the sidelines.
In the absence of a sector charter, companies can freely cherry-pick certain elements of broad-based BEE while neglecting the promotion of universal access to quality care and other lofty ideals aimed at ending what's known as health-care apartheid. The public health enhancement fund (PHEF), for instance, cannot be established without the charter.
"One of the factors that were under debate before the drafting process got derailed was the PHEF, something that could be of huge benefit to ordinary people who use the public sector," says Adcock Ingram CEO Jonathan Louw.
On the business front, the lack of a charter could result in broad-based pillars receiving little attention. Says Aspen chairman Judy Dlamini: "The health-care sector can still do more to address employment equity, skills development and enterprise development."
On black ownership, companies in this sector are doing well. Generic drugs maker Cipla Medpro tops the list with more than 30% in black hands. Newcomer Adcock, relisted on the JSE in August, is likely to sell at least 25% to black investors between now and next year.
Though on the whole players have proven to be willing participants in the BEE project, that does not mean the sector charter isn't worth reviving. Adcock's Louw, Dlamini of Aspen and Netcare director Victor Litlhakanyane are among the many captains of this industry who support this notion.
"As long as there is inequity in access to health care (and) as long as most South Africans do not consistently receive quality health care, (we need a charter)," Litlhakanyane told the Hospital Association of SA conference last year.
He also noted equity ownership is largely in the hands of white people or, in his words, the previously advantaged. His own company, which earned 75,42% to be SA's most empowered health-care player, has an equal number of black and white executive directors. That's something worth emulating for Medi-Clinic, whose seven-member executive consists of white males.
To its credit, Medi-Clinic is among the loudest players calling for the revival of the charter, whose death has been ascribed, in part, to erstwhile health minister Manto Tshabalala-Msimang's heavy handedness. Now with her out of the way, there's a good chance that the charter is finally going to come together. But it's unclear to what extent the PHEF will feature and what form the equity equivalents for foreign-held firms unable to sell equity to black investors will take.
On the AltX, the story of broken promises continued at Imuniti - that's the same firm that once listed Cosatu and ANC Women's League as empowerment partners. The plummeting stock has shrunk from a peak of 220c/share in December 2006 to a lousy 3c/share (a market cap of R27m). That's enough to make even the bravest of shareholders run for the hills.
