COSATU applauds President Cyril Ramaphosa’s assenting to the Companies’ Amendment Bills

The Congress of South African Trade Unions (COSATU) welcomes President Cyril Ramaphosa's assenting to the Companies' Amendment Bills. We commend government led by the African National Congress for these bold pro-worker anti-corruption laws. These progressive and long overdue Acts will advance the war against crime and corruption, further empower the state to deal with grey listing, and most critically compel large, listed companies and State-Owned Enterprises (SOEs) to disclose their financial reports to workers and the wage gap between their highest and lowest paid directors and employees to their shareholders.

COSATU and our Affiliate, the Southern African Clothing and Textile Workers' Union (SACTWU) engaged extensively on these Bills at Nedlac and in Parliament in support of and to strengthen them. The Acts will be powerful weapons in the fight against corporate sector corruption and nudge the private sector and SOEs towards a more equitable and just wage structure.

They will bring greater transparency to companies, helping to prevent the shameful and devastating scandals seen in Tongaat Hulett, EOH and Steinhoff; and to fight corruption and state capture. They will bring South African company law in line with best international practice as prescribed in the King IV Report on Corporate Governance. They will support South Africa's efforts to tackle inequality and poverty.

Nedlac conducted extensive engagements on the Bills where COSATU and SACTWU and Organised Business' leadership robustly debated the Companies Amendment Bill with agreement reached in 2021. Whilst what is contained in the Acts were not always COSATU and SACTWU's preferred position, we recognise they are part of a negotiated outcome and respect agreements reached at Nedlac. These resulted in minimal areas of difference and positive consensus in most areas. We are dismayed how some in business have resorted to populist hysterics and disinformation to attack these progressive laws which seek to promote transparency, tackle corruption and reduce wage inequality.

The amended Companies Act will see large businesses and SOEs having to publish more information about their remuneration policies, for instance, setting out the ratio between the highest paid executives and the lowest paid workers and the actual wages received by these lowest paid workers. This will allow workers and the public to compare companies' wage gaps and help shareholders determine whether executive pay is morally justified and strengthen shareholders' ability to reject executive remuneration where it is excessive and unjustified.

These provisions are critical if we are to overcome our shameful apartheid wage gap. Some of the most offensive examples include the banking sector where Chief Executive Officers makes on average R150 000 daily whilst their bank tellers will not make that in a year! We have seen mining companies squabble with mine workers for an additional R150 a month yet pay a CEO R300 million in a year! Other amoral culprits in perpetuating South Africa's status as the world's most unequal society include the retail, insurance and financial sectors.

COSATU and SACTWU are encouraged that these Acts will boost the war on corruption, money laundering and state capture by concluding the process started earlier at Parliament to compel businesses to disclose the actual persons owning them and not merely obscure trusts or shelf companies. The fact that the beneficial ownership of companies has stayed hidden has allowed fraud, corruption and even terrorists to thrive. The changes proposed in these Acts will shine a light on ownership and provide for greater access to company records.

The Acts will increase transparency around companies' finances and governance, bringing South Africa on par with international best practise. This will allow workers to understand more about their employers and will strengthen and improve wage bargaining and consultation around retrenchments, as well as boost labour market stability. Whilst some in the private sector oppose financial transparency, they would best remember it is workers' pension funds that are invested throughout the economy and workers have a right to know and have a say in how their hard-earned monies are spent.

We urge government to move with speed to ensure their comprehensive implementation. COSATU and SACTWU, will as per the Nedlac agreement, push for engagements to begin on further amendments to overhaul the Companies Act to address problems workers experience when companies are placed under business rescue as well as amendments to provide for worker representation on company boards as part of actioning the spirit of social compacts across public and private companies, enhancing transparency and building trust between employers and workers.

Issued by COSATU

For more information, please contact:

Matthew Parks

Parliamentary Coordinator

Cell: 082 785 0687

Email: [email protected]

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