By Nellie Peyton and Siyanda Mthethwa
JOHANNESBURG (Reuters) -South Africa’s Democratic Alliance party is going to court to challenge a new employment law that sets racial targets for large employers in an attempt to address the economic inequality that is a persistent legacy of former racist white minority rule.
The Employment Equity Amendment Act, which came into effect in January, allows the labour minister to set targets per sector for the number of non-white people and women who should be in management-level and professionally qualified roles.
The DA, the second-biggest party in government, will argue in court on Tuesday that it is unconstitutional, party officials said on Monday, in a case that is causing further friction with its bigger coalition partner, the African National Congress.
The topic is especially heated since U.S. President Donald Trump condemned South Africa for alleged racial discrimination against its white population, and offered white South Africans refugee status.
“We opposed it from the beginning, for the key reason that it will continue to drive unemployment up (and) economic growth down,” DA Federal Chairperson Helen Zille told a news briefing, saying this was because it would discourage companies from investing in South Africa.
The DA also says it discourages companies from growing because those with 50 or fewer employees are exempt. Firms larger than that need to obtain a compliance certificate or justify their failure to meet the targets in order to do business with the state.
Three decades after the end of white minority rule, racial divisions in South Africa remain stark. White people make up about 7% of the population but occupy 66% of top management level posts in the private sector, while Black people are more likely to be unemployed or in low-level jobs.
Last month, the government published five-year targets for 18 sectors include mining, manufacturing and agriculture. In mining, for example, it wants 57.5% of top management to be Black, Indian or “coloured” people, a term for South Africans of mixed race.
“This move is a clear attempt to reverse the progress made since 1994 and maintain the unfair status quo,” the labour ministry said of the DA’s court case.
South Africa has been trying to empower its Black population for years through a rewards system which previously allowed companies to set their own targets. But cheating is high and critics say it has mainly enriched a handful of politically connected businessmen.
(Writing by Nellie Peyton; Editing by Tim Cocks)
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