3. Electronic Theses and Dissertations (ETDs) - All submissions
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Item The administrative impact of Black Economic Empowerment certification on tourism enterprises in South Africa(2012-09-12) Ngcobo, Makhosazana NomceboThe Broad-Based Black Economic Empowerment (B-BBEE) Act 53 of 2003 sought to redress the socioeconomic imbalances caused by South Africa’s apartheid laws. The Act included different strategies to give preference to previously disadvantaged individuals on such aspects as ownership, management, employment, enterprise development, preferential procurement, skills development and socio-economic development. This thesis does not explore the plausibility of the regulations but rather the possible gap between intended benefits and the impact of B-BBEE. It is intended to establish the administrative impact of Black Economic Empowerment (BEE) certification,1 using a case study of a medium-sized tourism enterprise. The findings of this administrative impact are juxtaposed with the policy intentions as established through policymakers. The primary question is ‘What is the administrative impact of BEE certification on tourism enterprises in South Africa?’ The main propositions are that the administrative costs of BEE certification have had a significant negative impact on the profitability and competitiveness of medium-sized tourism enterprises; that tourism enterprises are not aware of the full extent of the administrative costs of BEE certification; and that policymakers are not aware of the unintended impacts caused by BEE certification on tourism enterprises. The research was undertaken through two interrelated phases, the first of which was exploratory in nature and sought to establish the administrative impact of BEE certification through the case study organization. The second phase sought to present the findings regarding the administrative impact of BEE certification to policymakers, with the aim of establishing policymakers’ awareness of the gap between policy intentions and policy impacts. Multiple methods have been used in order to gather data that informs this thesis. Primary data was obtained through semistructured interviews. The thesis focused on a case of one medium-sized organization, which was selected using convenience sampling. An in-depth interview was conducted with the Head of Administration and Finance in the organization, as the key person responsible for overseeing the process of BEE certification. Since the thesis focuses on a single entity, the data pool was too small to allow for the generalization of findings, but sufficient for a series of in-depth explorations and assessments of the topic. Secondary data was obtained from various sources such as journals, periodicals, and reports, particularly in relation to regulatory impact assessments as well as on certification issues in the tourism sector. The main findings are that the administrative costs of BEE certification have had a minimal impact on the profitability and competitiveness of medium-sized tourism enterprises, especially from the second year of conducting the annual audits as the systems are already in place for oncoming audits. It is only about 0.01% of turnover. 1 An activity that stems from one of the regulations linked to B-BBEE Act. It is an annual certification to demonstrate the companies’ achievement as far as B-BBEE is concerned, and entails an audit process executed by South African National Accreditation System (SANAS) registered agencies. Page 3 of 3 However, the psychological burden associated with the stress of administrative preparations for audits makes it seem more costly. The tourism enterprises are unaware of the extent of the administrative costs of BEE certification in that they overestimate the cost implications by at least 75%. The policymakers are unaware of the unintended impacts caused by BEE certification on tourism enterprises, especially as they relate to the administrative costs. In conclusion, the administrative impact of BEE certification on medium-sized enterprises is minimal as far as costs are concerned; however the psychological burden, although not measurable, is substantial. Moreover, the policymakers are oblivious to any possible impacts that might have been caused by BEE certification on enterprises, thus making the gap between policy intentions and the policy impact more than it could have been had they had the awareness. Awareness at the least gives an option to rectify where possible, thus ignorance of situation can to a certain extent exacerbate the situation.Item What is the relationship between state sponsored worker co-operatives, local markets and the Ekurhuleni Metropolitan Municipality?(2012-09-05) Nathan, OliverThis research report examines the relationship between state-sponsored worker co-operatives, local markets and the Ekurhuleni Metropolitan Municipality (EMM, on the East Rand, South Africa) in the 2000s, to examine how state support impacts upon democracy in worker co-operatives (“co-ops”) more generally. Worker co-ops are democratic and voluntary organisations, simultaneously owned and managed by their members (“co-operators”), have a substantial history in South Africa and elsewhere, and have often been seen as a potential alternative to capitalism. But are they? An extensive literature demonstrates market pressures erode co-op democracy (e.g. Philips): to survive, worker co-ops develop increasingly into capitalist enterprises, which fundamentally challenges notions that co-ops can challenge capitalism. Several commentators (e.g. Satgar) admit this problem, but see the solution in state support, which can purportedly shield worker co-ops from the market, so enabling their democratic content and socialist potential to be maintained. This pro-state approach is tested by examining actually-existing worker co-ops in the EMM, where a number of state-sponsored worker co-ops were established from the 2000s; the two most successful co-ops are the subject of this case study. It is shown that, on the contrary, state sponsorship fostered dependency and subtle (and less subtle) forms of state control over the co-ops. Most of the co-operatives failed to survive, as state control foisted upon them impractical goals (e.g. competition in poor community markets with overwhelming rivals,) while creating additional problems (e.g. failing to allocate marketing budgets) and also undermining co-op democracy (e.g. through imposing external priorities on the co-ops). The co-ops that survived remain trapped between state patronage and the capitalist market: unable to ensure accumulation, they remain dependent on the state, but as a result, are continually pushed by the state back into the market. It is not the South African state’s push to constitute the co-ops as black-run capitalist firms that is crucial to this story, but what this push reveals: state sponsorship was irredeemably linked to state control, and it was state control that enabled the state to force its agenda on iii the co-ops in the first place; an alternative state policy framework would simply change the goals imposed. The hierarchical and elitist class logic of the state is fundamentally incompatible with the popular, self-managed logic of worker co-ops. In short, the findings on the interaction of internal co-op dynamics with the state and open market pressures suggest that democratic worker co-ops are basically fundamentally incompatible with both markets and states. They are also fundamentally incapable of transcending either, as their survival requires either emulating capitalism or embracing the state. Lastly, this research report argues that the erosion of democracy in worker co-ops cannot simply be reduced to external forces (the state, the market), although these play a central role in such erosion. Of the two co-ops examined as case studies, one is characterised by authoritarian decision-making, the other by a fairly democratic practice. A key factor in such divergence were the co-operators’ own political and work cultures. Argued Bakunin: while worker co-ops can play a demonstrative role, challenging authoritarian politics by showing the possibility of workers’ self-management, they cannot provide a transformative role, overcoming capitalism or the state. A state-sponsored worker co-ops movement cannot form the heart of a radical, democratic and working class strategy for fundamental change. To answer the research question, the research asks which factors are important in determining the internal democratic or authoritarian form of the co-ops under study. Two state-sponsored worker co-ops are taken as case studies. The first co-op is characterised by authoritarian decision-making, while the other is characterised experiences democratic decision-making. The findings of the research agree with Philip’s (2006) argument that market factors are important in determining the internal form of a co-op. However, this research clearly shows that while market factors are important, they are by no means the sole determinant of the internal dynamics of a co-op. Non-market factors are equally important in determining the internal form of a co-op.Item The realities of royalties in South African Mineral and Petroleum Royalty Bill(2008-11-04T09:02:12Z) Machaba, Thabiso JacobEverything about the Republic of South Africa is said to be entering exciting times and facing new challenges. This is usually said within the context and against the backdrop of a changing face of South African political and economic landscapes from the past history of exclusion, deprivation, segregation and prejudice to the future of inclusion, tolerance, equal distribution and social harmony. The economic equal distributive idea is likened to the socio-democratic ideals of social justice, which advocates equal distribution of wealth to all citizens of the country. The South African idea is that South Africans are now in the new social era and the social transformation, on all fronts and most particularly the economic front, must move with the times and reflect the times that all its citizens find themselves in. On the political front, the year 1994 ushered in a new face of South Africa with the first democratic elections which, for the first time in hundreds of years, saw the inclusion and participation of the African majority of its citizens. These changes were soon entrenched by the adoption of the new South African Constitution, which espouses noble ideas of respect, equality, tolerance, economic development, distribution and access to country's wealth in a fair and equitable manner. The Constitution forces its citizens and the government to seek to redress the past imbalances particularly in the economic front and proactively take measures to see to this equilibrium of South Africa's wealth. Legislature, various political fronts and various economic fronts rallied around these principles and began talking the concept of Broad- Based Black Economic Empowerment. This concept has one central theme, which is to advance the economic participation of the previously (and in many respects the current) disadvantaged individuals into the mainstream economic activities of the country. It further aims to fast track their access to economic wealth and sharing of the fruit of common market and to seek to even out the economic disparities in many sectors of the society. As to how this empowerment process is being implemented and achieved, this paper will not even begin to traverse the diverse proposals and ideas of its implementation and realisations. Various economic sectors produced sector-specific economic empowerment charters in an attempt to lay the road maps on how to achieve this equilibrium of wealth distribution into the African hands. Virtually all-economic sectors are being active in that front including the mining sector. The Mineral and Petroleum Charter was among the first industry-specific charter to be produced after much publicised debates as to the best frame within which to approach and implement this concept. After that charter has been adopted and its implementation being realised, the South African government seeks now to introduces the Mineral and Petroleum Royalty Bill, which aims to collect monies from the mining houses that conduct mining activities in many areas. The move has caused many heated debates within the industry with the government forging ahead with its proposal subject to various consultative processes, while the business is also forging ahead with its attempts to halt this move right in its drafting stages. The purpose of this essay will be to look at the concept of the royalties, what they are, why is the South African government keen to introduce this Bill, why is business against them, why do we have them over and beyond the normal mining tax systems and the requirements of Black Economic Empowerment programs. In doing so, the article will also shed some light on their (royalties) nature and make necessary proposals in the process which, it is hoped, would in the main assist government and the Department of Minerals and Energy (DME) to implement, modify and manage royalty regime(s) in the mining and the petroleum industries. The essay will, to the extent that it can, rely on case law but the topic is mostly theoretical in South Africa and very few case law authority exist to clarify and provide thoroughly researched and considered legal analysis of the topic. The theoretical research of this article will take the reader to various countries that are in more or less the same boat as South Africa in terms of their relative reliance and dependence on mining industry and mining products for economic survival and activities. Similarities also extend to the relative sizes of these countries, similar perceptions of economic participation or lack thereof by mining houses vis-à-vis paying taxes that are congruent with their incomes, non-existing developmental corporate social responsibilities, no or less royalty payments and generally prevailing negative social-environmental impact of mines and mining houses on immediate communities within which they function and carry on their businesses. It is the writer's opinion that the political backgrounds of these countries, as compared with South Africa, also have huge impact and influence on how the concept of royalties can be understood locally. A comparative analysis of their modus operandi will be undertaken to see if the legislative attempts by South Africa is in or out of order in seeking to introduce royalties and whether its reasons are in or out of tune with sound local or international economic principles. Immediate economic concerns surrounding royalties are that royalties have the potential to attract or dismiss much needed investments, be it direct or indirect investment. Their effect on shareholders’ dividends, growing local mining costs/ business and their general impact on financial upkeep of mining operations in South Africa will also be researched in this essay. The essay will therefore assume this outline of topics, definition and origin of the concept; international comparative analysis; the South African past mining regimes visà- vis royalties; the current South African Royalty Bill; critics of the South African royalty Bill; the defenders of the Bill; some proposals; way forward; and conclusion.