South Africa’s Choice of White CEO for Eskom Angers Labor Unions
South Africa’s Choice of White CEO for Eskom Angers Labor Unions
The South African government’s selection of a white executive to head the state power utility has outraged some unionists and politicians who see the move as a setback to efforts to address the nation’s racial disparities.
Andre de Ruyter, 51, is due to become chief executive officer of debt-stricken Eskom Holdings SOC Ltd. on Jan. 15 and will be the first white person to be assigned the post on a permanent basis since Allen Morgan retired in early 2001. Jacob Maroga, who was Eskom CEO from 2007 to 2009, and Dan Marokane, the utility’s former head of group capital, were among the black contenders.
The National Union of Mineworkers and the National Union of Metalworkers of South Africa, the two largest unions at Eskom, criticized De Ruyter’s appointment as a setback to the country’s racial-transformation agenda. And the radical Economic Freedom Fighters, the second-largest opposition party, said the decision was racist and a deliberate attempt to diminish the role Africans play in the economy.
The criticism is unfounded, according to Ntsikelelo Breakfast, a political analyst at the University of Stellenbosch.
“There have been many black people who have had that position at Eskom before. Some have resigned and some have been implicated in serious transgressions,” he said Tuesday by phone. “I don’t think that the government or the board have turned a blind eye to transformation as far as Eskom is concerned.”
While official data shows that white people do dominate the leadership of South African companies, that isn’t the case at state entities.
The government’s Commission for Employment Equity assessed more than 26,000 companies last year and found almost 70% of top managers were white. By contrast, black South Africans, who make up 81% of the population of 58.8 million, occupied 76% of top government positions.
Eskom provides about 95% of South Africa’s electricity. It’s amassed 450 billion rand ($30 billion) of debt that it can’t afford to service, is reliant on government bailouts to remain solvent and is battling to produce enough power to meet demand.
De Ruyter, who holds a law degree and a masters’ degree in business administration, has considerable corporate experience, though not at state-owned companies. He’s been CEO of packaging firm Nampak Ltd. since 2014 and prior to that worked for more than two decades at petrochemical giant Sasol Ltd., where he held a number of senior management roles.
The Public Enterprises Ministry, which oversees Eskom, said it employed a recruitment company that identified 142 potential candidates to fill the CEO post and it drew up a shortlist of 17 people. The utility’s board interviewed six of them, and submitted three names to the cabinet, which made the final decision.
Lobby groups Business Unity South Africa and the Black Business Council both said De Ruyter was appointed after a thorough process and they were committed to working with him.
“Inasmuch as the country’s transformational agenda should be supported, critical positions should be filled based on merit,” said Sethulego Matebesi, a political analyst at the University of the Free State. “We should avoid turning every issue into a political hot potato. Does the new Eskom CEO has the requisite experience and skills? If so, let us support him irrespective of his color.”
--With assistance from Rene Vollgraaff.
To contact the reporters on this story: Mike Cohen in Cape Town at mcohen21@bloomberg.net;Paul Burkhardt in Johannesburg at pburkhardt@bloomberg.net
To contact the editors responsible for this story: Paul Richardson at pmrichardson@bloomberg.net, Karl Maier, Alastair Reed
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