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| South Africans sue drinks giant for exploiting 'black empowerment' policies | South Africans sue drinks giant for exploiting 'black empowerment' policies |
| (35 minutes later) | |
| A South African company is being sued by 150 of its former employees who say they were exploited under the guise of “black economic empowerment” policies. | A South African company is being sued by 150 of its former employees who say they were exploited under the guise of “black economic empowerment” policies. |
| The drivers allege that a business owned by the world’s largest brewer, SABMiller, exploited a flagship affirmative action programme to cut costs. | The drivers allege that a business owned by the world’s largest brewer, SABMiller, exploited a flagship affirmative action programme to cut costs. |
| The drivers are now seeking 6.3bn rand (£270m) in compensation from Amalgamated Beverage Industries (ABI), claiming they were pressured to switch from being employees into “owner-drivers” to make it look as if the company had “empowered” them. | |
| But the drivers claim that restrictive conditions and unfair contracts meant they spiralled into debt as independent small business owners, while SABMiller and ABI avoided liability under South Africa’s labour laws. | But the drivers claim that restrictive conditions and unfair contracts meant they spiralled into debt as independent small business owners, while SABMiller and ABI avoided liability under South Africa’s labour laws. |
| Related: The price of gold: South African miners sue over devastated lives – in pictures | Related: The price of gold: South African miners sue over devastated lives – in pictures |
| Eventually, many drivers say their contracts with ABI were summarily terminated when they could no longer make their payments to the company for stock and vehicles. | Eventually, many drivers say their contracts with ABI were summarily terminated when they could no longer make their payments to the company for stock and vehicles. |
| The “owner-driver” scheme is a major component of SABMiller’s corporate social responsibility initiatives, and it has ensured compliance with the government’s Black Economic Empowerment policy, South Africa’s version of affirmative action. | The “owner-driver” scheme is a major component of SABMiller’s corporate social responsibility initiatives, and it has ensured compliance with the government’s Black Economic Empowerment policy, South Africa’s version of affirmative action. |
| The policy was introduced in 2003 to redress the inequalities of apartheid by conferring certain economic privileges to previously disadvantaged groups. The policy provides for codes of good practice, and companies are allocated points according to how well they measure up to those codes. | The policy was introduced in 2003 to redress the inequalities of apartheid by conferring certain economic privileges to previously disadvantaged groups. The policy provides for codes of good practice, and companies are allocated points according to how well they measure up to those codes. |
| In the case of SABMiller the owner-driver policy was part of a series of initiatives which allowed it to compete for government tenders, and to boast its “empowerment” credentials – an important element of doing business in South Africa. | In the case of SABMiller the owner-driver policy was part of a series of initiatives which allowed it to compete for government tenders, and to boast its “empowerment” credentials – an important element of doing business in South Africa. |
| The case has drawn widespread criticism of SABMiller, a company that owns beer brands such as Fosters, Grolsch, Peroni and is the largest bottler of Coca-Cola in the country. | The case has drawn widespread criticism of SABMiller, a company that owns beer brands such as Fosters, Grolsch, Peroni and is the largest bottler of Coca-Cola in the country. |
| “The story is simple: owner-drivers like Moses Mkhondo and Thabo Tsolo were asked to resign from their jobs, promised a bump in pay, cajoled into signing absurdly unfair contracts, exploited to the bottom of their bank loans, and then allegedly terminated without cause,” wrote journalist Richard Poplak in an investigation into the case for the Daily Maverick Chronicle. | “The story is simple: owner-drivers like Moses Mkhondo and Thabo Tsolo were asked to resign from their jobs, promised a bump in pay, cajoled into signing absurdly unfair contracts, exploited to the bottom of their bank loans, and then allegedly terminated without cause,” wrote journalist Richard Poplak in an investigation into the case for the Daily Maverick Chronicle. |
| Andries Nkome, the lead lawyer for the drivers, said: “The rights to which our clients are entitled to were trampled on. And these are basic rights, like the right to equality, the right to justice and so on.” | Andries Nkome, the lead lawyer for the drivers, said: “The rights to which our clients are entitled to were trampled on. And these are basic rights, like the right to equality, the right to justice and so on.” |
| SABMiller and ABI deny that they have treated owner-drivers unfairly. “For the last two years we’ve been engaging with the ex-owner drivers who were not happy with being terminated,” said Tshidi Ramogase, ABI’s corporate director. | SABMiller and ABI deny that they have treated owner-drivers unfairly. “For the last two years we’ve been engaging with the ex-owner drivers who were not happy with being terminated,” said Tshidi Ramogase, ABI’s corporate director. |
| “We’ve been meeting with them to understand what happened, why were their contracts terminated. The scheme itself has had bad publicity and we’ve had to look back and say, ‘Is it really that bad?’ And we get to the same answer all the time. It is good for us and we do see the benefit daily… We believe there’s more win for both partners than there are any big negatives.” | “We’ve been meeting with them to understand what happened, why were their contracts terminated. The scheme itself has had bad publicity and we’ve had to look back and say, ‘Is it really that bad?’ And we get to the same answer all the time. It is good for us and we do see the benefit daily… We believe there’s more win for both partners than there are any big negatives.” |
| Cheap labour | Cheap labour |
| Moses Mkhondo, a former owner-driver, disagrees with Ramogase’s claims. | Moses Mkhondo, a former owner-driver, disagrees with Ramogase’s claims. |
| He joined ABI in the 1980s and was a model employee – even winning an internal company driving competition. He recalls that in April 2003, he was summoned along with a dozen other employees to a training room. They were asked to resign, and handed a 66-page contract that would reconstitute them as “owner-drivers”. | He joined ABI in the 1980s and was a model employee – even winning an internal company driving competition. He recalls that in April 2003, he was summoned along with a dozen other employees to a training room. They were asked to resign, and handed a 66-page contract that would reconstitute them as “owner-drivers”. |
| “We were not given enough time to take the contract home, or to get lawyers,” Mkhondo told the Daily Maverick Chronicle. “The managers were rude to us. They insisted we must sign right away. When they talked to us, they didn’t beg. They told us ‘sign, or else you lose your contract’.” | “We were not given enough time to take the contract home, or to get lawyers,” Mkhondo told the Daily Maverick Chronicle. “The managers were rude to us. They insisted we must sign right away. When they talked to us, they didn’t beg. They told us ‘sign, or else you lose your contract’.” |
| Mkhondo signed, and at first things went well. He was making more money than he had earned before. | Mkhondo signed, and at first things went well. He was making more money than he had earned before. |
| But as ABI later looked to cut costs – a process which accelerated after SABMiller increased their share from 9% to 100% of ABI in 2004 – the company put financial pressure on the owner-drivers, altering the payment structure and reducing compensation. | But as ABI later looked to cut costs – a process which accelerated after SABMiller increased their share from 9% to 100% of ABI in 2004 – the company put financial pressure on the owner-drivers, altering the payment structure and reducing compensation. |
| Crucially, restrictive conditions in the contract meant that Mkhondo couldn’t work for anyone else, he says, nor could he negotiate better terms for the work he did for ABI. | Crucially, restrictive conditions in the contract meant that Mkhondo couldn’t work for anyone else, he says, nor could he negotiate better terms for the work he did for ABI. |
| By October 2013, Mkhondo says that he owed ABI 340,000 rand – despite beating all of his performance targets, and winning a trip to Brazil for doing so. By November, this figure had ballooned to 747,000 rand, and in January Mkhondo’s contract was summarily terminated. | By October 2013, Mkhondo says that he owed ABI 340,000 rand – despite beating all of his performance targets, and winning a trip to Brazil for doing so. By November, this figure had ballooned to 747,000 rand, and in January Mkhondo’s contract was summarily terminated. |
| Following the Daily Maverick Chronicle investigation, the Economic Freedom Fighters, a major political party, has vowed to raise the matter in parliament. | Following the Daily Maverick Chronicle investigation, the Economic Freedom Fighters, a major political party, has vowed to raise the matter in parliament. |
| Related: Anheuser-Busch InBev reaches final agreement for SABMiller takeover | Related: Anheuser-Busch InBev reaches final agreement for SABMiller takeover |
| “The EFF condemns SABMiller and ABI for the abuse it has subjected workers to in the name of Black Economic Empowerment with the contempt it deserves… Now, SAB is directly exploiting the country’s policy of BEE to relegate black truck drivers into a shameful existence of cheap labour,” the party said in a statement. | “The EFF condemns SABMiller and ABI for the abuse it has subjected workers to in the name of Black Economic Empowerment with the contempt it deserves… Now, SAB is directly exploiting the country’s policy of BEE to relegate black truck drivers into a shameful existence of cheap labour,” the party said in a statement. |
| Columnist Sisonke Msimang argued that the investigation should spur further scrutiny of South Africa’s private sector. “As you read this story you will recognise that the economic system that continues to keep black people very, very poor in this country has been broken for so long, and the private sector has been so strong for so long, that we have a vast imbalance that has been allowed to flourish unchecked. | Columnist Sisonke Msimang argued that the investigation should spur further scrutiny of South Africa’s private sector. “As you read this story you will recognise that the economic system that continues to keep black people very, very poor in this country has been broken for so long, and the private sector has been so strong for so long, that we have a vast imbalance that has been allowed to flourish unchecked. |
| “We, the people, have not been demanding when it comes to scrutiny of corporate conduct,” she said. | “We, the people, have not been demanding when it comes to scrutiny of corporate conduct,” she said. |
| In November, SABMiller and rival brewer Anheuser-Busch InBev announced plans for a £71bn merger, the largest transaction ever in the brewing industry. The merger is subject to anti-trust reviews in several countries. | In November, SABMiller and rival brewer Anheuser-Busch InBev announced plans for a £71bn merger, the largest transaction ever in the brewing industry. The merger is subject to anti-trust reviews in several countries. |