The Congress of SA Trade Unions (Cosatu) has condemned in the strongest terms what it termed "the walkout" by financial institutions from a meeting to gazette the Financial Sector Charter.

"It is becoming clear that banks, and other institutions, are using the Charter as a shield against genuine transformation of the financial sector, instead of as a catalyst for the change the sector sorely needs," Cosatu said on Thursday in a statement.

The trade union federation added that the Banking Association (BASA), the Life Offices' Association, the SA Insurance Association (SAIA) and other financial trade associations had boycotted negotiations on gazetting the Financial Sector Charter on Wednesday.

The government's deadline for publishing the charter for public comment was 31 August and if the charter was not gazetted by then, the generic Codes of Good Practice (CoGP) would apply to the financial sector, Cosatu said.

Dispute over broad-based black ownership

However a dispute had arisen months ago over broad-based black (BBBEE) ownership.

The Financial Sector Charter became deadlocked by the banks' refusal to increase black ownership targets to align with the BBBEE Act Codes of Good Practice.

"They (the banks) did not want the Financial Sector Charter to be aligned with the minimum ownership targets in the Codes," Cosatu said.

It was agreed all other aspects of aligning the Charter with the Codes would be negotiated while the ownership dispute resolution process would continue on a parallel track.

It was decided that talks to resolve the ownership issue would be held between the Charter constituency principals – Zwelinzima Vavi representing the Nedlac Labour constituency, Blade Nzimande of the Nedlac Community Constituency, and the Minister of Finance, Trevor Manuel on behalf of government.

Banks walked out of negotiations

Cosatu has accused the banks of walking out of the negotiations.

"They said progress by the principals was too slow, and that they were dissatisfied that the principals had not given them written progress reports."

Cas Coovadia, Managing Director of the Banking Association, said the Financial Sector Charter Council (Council) had already agreed to substantially align all elements of the Charter to the Dti Codes of Good Practice (Codes).

The only exception to this was the Ownership element. The Council had also agreed to include the Access to Financial Services and Empowerment Financing elements contained in the Charter in the Codes, Coovadia said.

"This would make a Financial Sector Code, if gazetted, superior in transformation terms to the generic Codes."

He added that the meeting held on Wednesday was to consider a draft sector code, with the exception of Ownership.

"We have made substantial progress with this draft," he said.

However, Coovadia said that trade associations took the view at Wednesday's meeting "that we have gone as far as we can on discussions on a sector code, and we need to resolve the Ownership issue before completing discussions on this."

He added that this view had been taken "because we are a month away from a 31 August deadline set by DTI to gazette sector charters, and we have not had any progress from the engagement between Government and Labour and Community."

Sapa