Looking past the elections, business leaders need to act to reduce social strife — even at cost to their profits
We already know that whatever new governments emerge at local, provincial and national levels due to voting after 29 May, they will face overwhelming challenges delivering the promises of the Constitution to all South Africans.
Big business should be planning now for a renewed, more constructive role in bringing stability to the socio-political landscape and ensuring the country’s future.
On 30 May, South Africans will wake up to a different political landscape. New parties and coalitions, the inclusion of independent candidates in National Assembly and provincial legislature contests, and shifts in support for legacy parties underline the continued vibrancy of our electoral democracy. At the same time, these dynamics of political contestation create a tumultuous environment for the development of social and economic policy and the delivery of public services.
The elections take place at the end of a year in which South Africa experienced four confrontations that were so violent that they registered as “battles” in the Armed Conflict Location & Event Data Project dataset, together with 658 riots. These were overwhelmingly tied to frustration and despair over the bread-and-butter issues of human dignity and human security defined as fundamental in the Constitution. In addition, 181 incidents of state violence against civilians were recorded.
Despite our electoral robustness, our social contract is straining to the breaking point.
So, we do know one thing with great certainty. The new governments at local, provincial and national levels — no matter how willing they are — will not be able to, on their own, formulate and implement solutions to our pressing problems such as energy, water, food security, education, housing and criminal violence with anything like the speed or scale required to manage our social tension. As South Africans, and part of its future, business leaders can and must act to reduce social strife.
Commitment to an inclusive economy
Often enough where business has greatly prospered in the new South Africa — for example, in the platinum belt, industrial development zones such as in Richards Bay and in export agriculture — workers and communities continue to suffer the most.
The platinum belt is increasingly violent and lacking in access to public services; Richards Bay has a youth unemployment rate above the national average and commercial agriculture is riddled with wage, health and safety violations.
This is not only a failure by businesses and the government to manage the risks and costs of large-scale investments. It is also a failure of the, perhaps naive, notions that emerged in the early 1990s under the aegis of the Consultative Business Movement that one could develop an “apolitical economy” or that, within nascent structures across geographies and multiple levels of government, tax revenue from businesses that caused social problems could be dependably collected and deployed to solve them.
What we have learned in the intervening decades is that it is not enough to have big businesses, even good ones. We need a viable economic model that accounts for the rural poor, the large number of urban South Africans who work in the informal economy and the micro and small enterprises that have largely been left out of the larger economic growth story.
Economies that work for the poor prioritise direct investment in the poor and clear away the barriers to their success. The most excluded and vulnerable are put at the centre of economic planning in which big businesses play a supporting, rather than central, role.
This is an economic vision to which big businesses can commit and to which they can offer their support.
Ending business corruption and violations of human rights
Big businesses — rightly — complain of the scourge of state capture by corrupt businesses in South Africa. A business is rarely only corrupt with respect to money but is also corrupt with respect to timeliness, quality and environmental and social standards, leaving our infrastructure crumbling and communities suffering from toxic pollution.
The cost of this falls most heavily on poor South Africans less able to insulate themselves from the negative impacts, even as the playing field becomes ever more uneven for ethical businesses.
Yet, big business seems hesitant to take any consequential action with respect to its own. McKinsey & Co, the global consulting company implicated in the Zondo report on state capture, continues to profit from its business with major corporates in South Africa.
Bain & Company and Vossloh, just two of many companies implicated in major corruption scandals, remain members in good standing with the UN Global Compact, which holds itself as the leading international platform for business and development.
No large business can long survive without the support of other businesses. Businesses today can largely end the scourge of big business corruption by setting higher standards for conduct in the partnerships they form.
Given that enforcement mechanisms in South Africa are unacceptably weak, they can advocate for the establishment of alternative avenues for aggrieved people and communities to seek redress for business harms done, sign up to be held accountable by them and only do business with other corporations who do likewise.
Pragmatic action for reduced tension and more positive social outcomes
The courses of action outlined above — only two of many which big businesses, together with civil society and community partners, might incubate and pursue — admittedly have costs and risks for businesses.
Some will be financial — for example, a mining sector in which all associated workers earn a living wage and in which the environment was protected for future generations, would deliver lower returns to international capital than the current one.
Some costs will be political, as consequential action for an inclusive economy and a more ethical business ecosystem will irritate some current business and government partners, who might be tempted to take retaliatory action.
So, this is unambiguously a call for business leadership and business leader courage. If we are to transition from the current, entrenched socio-political crisis to the South Africa of inclusive and peaceful development envisaged by the Constitution, then big business must engage more to respect, protect and advance the social compact. And it must do so even at some risk and cost to itself.
As a small, but then growing, number of businesses understood from the late 1980s through the democratic transition we celebrate this coming election day, at stake is the very existence of the Constitutional order on which today’s large businesses depend for survival and which all of us need to prosper and thrive.
Professor Brian Ganson is head of the Centre on Conflict & Collaboration at Stellenbosch Business School, a hub for research and reflection on the private sector, conflict and human security.
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