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22 October 2018 Photo Sonia Small
Prof Philippe Burgers book Getting It Right
Prof Philippe Burger’s book Getting It Right: A New Economy for South Africa highlights the urgent need to purge government policies of all forms of toxic patronage relationships and mismanagement in order to save our economy.
South Africa is in an economic rut. Economic growth has collapsed, the unemployment rate has increased, and the country’s level of inequality is of the highest in the world. As if that’s not enough, high levels of corruption, patronage, and state capture also mean that it suffers from severe institutional rot.

It is a sobering picture that is painted on the outside cover of Getting It Right: A New Economy for South Africa – the latest book by Prof Phillipe Burger, Acting Dean of the Faculty of Economic and Management Sciences.  In the book, he explains how the legacy of the Apartheid era labour system, the old system of Bantu Education, and the former Bantustans still cripple our economy. And why 24 years of democratic government reforms could still not deliver on the promises of work and prosperity.

Education to blame
 
One of the chargeable factors he singles out, is the state of our education system.
 
“Half of South Africa’s children start school, but never finish. Less than one percent of learners achieve a distinction in Maths in the final matric exam. And on an organisational level, many schools are crippled by labour unions calling the shots, which often means that underperforming teachers stay in their jobs. All these things eventually contribute to our unemployment rate of 27%,” he says.

Towards solutions
The solutions he advocates include securing recurrent economic investment by creating an investor-friendly environment, but also paying urgent attention to ridding our education system and communal land areas under traditional chiefs, where 32% of South Africa’s population are still living, of all forms of self-serving patronage relationships.
 
Prof Burger wrote the bulk of the book during his nine-month tenure as a Fulbright Exchange Scholar in the Center for Sustainable Development at Columbia University’s Earth Institute (New York). The time he spent there with renowned American economist, Professor Jeffrey Sachs – who also wrote the foreword of his book – was invaluable to his research.
  
Returning from an overseas trip recently, Prof Burger was delighted to see Getting It Right on the bestsellers shelf of Exclusive Books at the OR Tambo Airport. 
“It was a great welcome-home gift!”

He hopes the book will be read by the generally informed public in the run-up to next year’s elections, and that it will help to influence how people think about policy issues.

News Archive

The failure of the law
2004-06-04

 

Written by Lacea Loader

- Call for the protection of consumers’ and tax payers rights against corporate companies

An expert in commercial law has called for reforms to the Companies Act to protect the rights of consumers and investors.

“Consumers and tax payers are lulled into thinking the law protects them when it definitely does not,” said Prof Dines Gihwala this week during his inaugural lecture at the University of the Free State’s (UFS).

Prof Gihwala, vice-chairperson of the UFS Council, was inaugurated as extraordinary professor in commercial law at the UFS’s Faculty of Law.

He said that consumers, tax payers and shareholders think they can look to the law for an effective curb on the enormous power for ill that big business wields.

“Once the public is involved, the activities of big business must be controlled and regulated. It is the responsibility of the law to oversee and supervise such control and regulation,” said Prof Gihwala.

He said that, when undesirable consequences occur despite laws enacted specifically to prevent such results, it must be fair to suggest that the law has failed.

“The actual perpetrators of the undesirable behaviour seldom pay for it in any sense, not even when criminal conduct is involved. If directors of companies are criminally charged and convicted, the penalty is invariably a fine imposed on the company. So, ironically, it is the money of tax payers that is spent on investigating criminal conduct, formulating charges and ultimately prosecuting the culprits involved in corporate malpractice,” said Prof Gihwala.

According to Prof Gihwala the law continuously fails to hold companies meaningfully accountable to good and honest business values.

“Insider trading is a crime and, although legislation was introduced in 1998 to curb it, not a single successful criminal prosecution has taken place. While the law appears to be offering the public protection against unacceptable business behaviour, it does no such thing – the law cannot act as a deterrent if it is inadequate or not being enforced,” he said.

The government believed it was important to facilitate access to the country’s economic resources by those who had been denied it in the past. The Broad Based Economic Empowerment Act of 2003 (BBEE), is legislation to do just that. “We should be asking ourselves whether it is really possible for an individual, handicapped by the inequities of the past, to compete in the real business world even though the BBEE Act is now part of the law?,” said Prof Gihwala.

Prof Gihwala said that judges prefer to follow precedent instead of taking bold initiative. “Following precedent is safe at a personal level. To do so will elicit no outcry of disapproval and one’s professional reputation is protected. The law needs to evolve and it is the responsibility of the judiciary to see that it happens in an orderly fashion. Courts often take the easy way out, and when the opportunity to be bold and creative presents itself, it is ignored,” he said.

“Perhaps we are expecting too much from the courts. If changes are to be made to the level of protection to the investing public by the law, Parliament must play its proper role. It is desirable for Parliament to be proactive. Those tasked with the responsibility of rewriting our Companies Act should be bold and imaginative. They should remove once and for all those parts of our common law which frustrate the ideals of our Constitution, and in particular those which conflict with the principles of the BBEE Act,” said Prof Gihwala.

According to Prof Gihwala, the following reforms are necessary:

• establishing a unit that is part of the office of the Registrar of Companies to bolster a whole inspectorate in regard to companies’ affairs;
• companies who are liable to pay a fine or fines, should have the right to take action to recover that fine from those responsible for the conduct;
• and serious transgression of the law should allow for imprisonment only – there should be no room for the payment of fines.
 

Prof Gihwala ended the lecture by saying: “If the opportunity to re-work the Companies Act is not grabbed with both hands, we will witness yet another failure in the law. Even more people will come to believe that the law is stupid and that it has made fools of them. And that would be the worst possible news in our developing democracy, where we are struggling to ensure that the Rule of Law prevails and that every one of us has respect for the law”.

 

 

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