Yesterday afternoon, a photo-image of an email circulated on Twitter suggesting that MiWay Insurance’s managers and claims’ assessor would “reject 90% of claims made by black people” in order to save money and “punish these black baboons”.
MiWay hit back calling that “fake news”. Incidentally, their social media accounts are usually populated by smiling black models who look far too happy to be thinking about insurance or racism. Nevertheless, customers were tweeting things like, “Cancel my policy!”
A few months ago, homophobic pastor Steve Anderson came to South Africa and was to host something at ; Spur barred him from using their premises to spread hate. Later, Spur had an incident involving a black mother and a white father (of different children) on which the restaurant took the black mother’s side; AfriForum called for boycott on Spur. A lot of my gay friends immediately supported the Spur brand because of what it had done for them; even I encouraged people I knew to eat at Spur. I was just about to post that thought when Spur capitulated to AfriForum.
Likewise, OUTsurance had the Father’s Day ad that had no representation of black fathers in a country where the majority of fathers are black. The point is more brands, restaurants and businesses are being caught in the cross-fire of race-related battles.
One way to know for sure whether a business is racist is through these incidences and the social media furore that follows, but that is like listening to a whisper through a whirlwind. Circumstances turn around in less than the blink of an eye, as they kept doing with Spur.
The other way is pulling Broad-Based Black Economic Empowerment scorecards from those companies’ websites. JSE-listed businesses are now required to display theirs on their websites. I recently resolved to go down that list in alphabetical order, reading through those sites for context, and to also look up state-owned enterprises. Who knows what blog posts will come from that when I understand what I have been reading? And ever since a friend started posting the BEE scorecards of varying brands that are used religiously by black households, I started looking up certificates for the companies I buy wine, toiletries and snacks from, just to start.
This is a more fact-based approach to working out whether an entity is racist or not. Many of us want the South African economy to be transformed. How are we measuring how transformed an economic player is? Do some social media scandals harm brands that are contributing positively to the kind of future we want? Is reading press statements and social media comments really going to tell us what we need to know? (
Unlike circumstances, BEE certificates are valid for fixed periods of time. It’s also important to look at which verification agency measured the company’s compliance level: they interpret different aspects of BEE a little differently. Sometimes, one has to dig up older scorecards for comparison. When I have no idea what I’m looking at, I sometimes phone law firms that write articles on BEE or I try to contact the company itself.
Here is MiWay’s BEE scorecard. It was issued on March 1 this year and will expire on the 28th of February next year.
I’m no BEE expert, but I do believe that to be interested in transformation is to be interested in BEE. For this reason, I’m slowly learning what transformation looks like in its most empirical, most measured manifestation. I’m happy to get feedback or criticism on my interpretations, and also to read people’s thoughts, opinions and feelings on it. BEE isn’t perfect, but it’s there.
Of course, MiWay’s scorecard is Santam’s, which (I stand to be corrected) wholly owns MiWay Insurance in part directly and in part through Sanlam. Put differently, Sanlam has an effective 60% interest in Santam, which in turn operates (among other entities) through MiWay. So to know Santam is to know MiWay. I can’t pinpoint when Santam acquired the balance of MiWay, though multiple sites report that as a current reality.
On paper, Santam is deeply transformed. It’s got a level 2 B-BBEE rating. For reference, level 8 is the lowest compliance level there is, but it’s still better than non-compliant; level 1 is the highest compliance level there is. So level 2 for a JSE-listed corporate (a company whose turnover exceeds R50 million) means someone sat down, planned the business’s transformation strategy — and executed it pretty damn well.
For further reference, when you buy a good or service from a non-BEE compliant business, your money contributes not to transformation, nor the eradication of inequality nor the end of systemic racism. On the contrary, you may be paying to maintain what apartheid put in place. This is why BEE has a “preferential procurement” aspect to it — a measure of how much of the money spent on a BEE-compliant company is considered a contribution to transformation. This strengthens the purchasing entity’s scorecard.
When you buy from an entity with a level 8 rating, 10% of that money goes towards transformation; the other 90% may very well be to maintain the status quo but we don’t know for sure; at worst, the net effect may be that 80% of the money goes to racism.
When you buy from an entity with a level 1 rating, 135% of your money is reckoned as contributed to transformation. Yes, the different levels lie on a sliding scale; level 3 says 110% of your money contributes towards transformation, and with Santam’s level 2 rating, 125% of the money you spend with them can be considered a contribution towards transformation. I think the reason we measure beyond a 100% (which is a level 4’s contribution percentage) is that money is pretty elastic. Compound interest and other profit-making magic enchantments can stretch it further than it would normally go. So it is theoretically possible for 135% of your money to fund transformation.
But there’s a fly in the ointment: in 2013/2014, Sanlam extended and expanded an equity relationship with Patrice Motsepe’s Ubuntu-Botho. To spare you even more details, this means a significant percentage of the wealth redistribution on MiWay’s scorecard is funnelled through a narrow base of super-wealthy black gatekeepers: to know more about the true black empowerment that happens through many “BEE deals”, one has to read further than the scorecard to companies’ corporate social investment initiative webpages. A “gatekeeper” can, in many instances, keep black people on the ground a step removed from the economic artery of the companies those gatekeepers make BEE deals with.
This is not to say Patrice Motsepe, the current Deputy Chairman of the Sanlam Board, (speaking of Sanlam, can somebody tell me whether the Public Protector has gone after them for the Bankorp bailout yet…?) is a greedy oligarch. Nor is it to say that Mr. Motsepe should not make more money if he wishes. It is to say that as long as BEE is amenable to the further enrichment of the already-rich, it should not be called Broad-Based Black Economic Empowerment because there is often nothing Broad-Based about many BEE transactions. When your money goes to MiWay or any other major corporate, ask yourself whether 125% of it is truly going towards Broad-Based Black Economic Empowerment, or just Black Economic Empowerment. I cannot answer that for you; I can only hope you research if you have not been doing so. Transformation and poverty alleviation will not happen by osmosis.
I’m not alone in these misgivings. At the time, money boffin Riaz Gardee commented that,
“One of the measures of a successful BEE transaction, particularly for a public listed company, should be the public participation component. Whilst there may be many beneficiaries in Ubuntu-Botho for whom significant value was created it is unfortunate that Sanlam did not include a public participation component.”
“Critics of Government’s BEE policies have always stated that transferring billions to politically connected existing billionaires should not qualify as BEE and will certainly use Sanlam’s BEE transaction as a case in point.”
“In hindsight it would have probably been better to include employees and raise the initial equity contribution via a public offering. The result would have been a much wider spread of the massive R13.3 billion value uplift. This could have been achieved whilst still including all Ubuntu-Botho’s current participants in Sanlam’s BEE deal as there was more than enough to go around.”
At any rate, what’s really happening with MiWay? That the email disclaimer at the bottom of the photograph is barely typed up tells me that someone there decided to play Bell Pottinger on the insurer. We really give that UK-based firm too much credit for “creating” racist division on the basis of economic inequality in South Africa. We have been creating our own divisions all along.
An incident like this can completely reshape how people understand a brand. Someone tweeted,
#MiWay remember when you sent me to take pics of the car my hubby had died in. Even before I could burry him. Its all making sense now.
This is why both companies and consumers should ideally use Broad-Based (an emphasis on broad) Black Economic Empowerment as the common measure of economic transformation; it protects both the brand and its consumers.
Failing this, we never needed Bell Pottinger to set us at war. If you were starving in the Africa of your ancestors, would you really need someone from the former (?) colonial power to explain to you why you’re hungry?
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