The Congress of South African Trade Unions (Cosatu) on Wednesday called for South Africa's current policy on black economic empowerment (BEE) to be replaced.
Criticising ArcelorMittal South Africa's plans to acquire Imperial Crown Trading (ICT) for R800-million and also to involve ICT in its R9.1-billion BEE deal, Cosatu said the current regulations were promoting narrow elitist BEE.
"BEE promotes self-accumulation and this cannot be allowed to continue in its current form. There is nothing broad-based about BEE deals like this one," said the federation in a statement.
"The current policy on BEE should be replaced with a new law which will promote cooperatives which create jobs, develop skills and share the profits among workers and/or communities, rather that promoting individual accumulation," it said.
Cosatu's call follows the National Union of Metalworkers of South Africa (Numsa) appeal to the South African government to halt the AMSA-ICT deals.
Tarnishing the image of BEE
Warning that deals risk permanently tarnishing the image of BEE, Numsa said the cabinet should undertake a comprehensive review of all BEE deals after what it dubbed the latest "ArcelorMittal-ICT looting scheme" raised broader questions about the political appropriateness of BEE measures.
ICT was controversially awarded the prospecting license over a 21.4 percent stake of Sishen, which is owned by Anglo American company Kumba Iron Ore.
The rights over the stake reverted to the state after AMSA failed to renew its mining rights.
Kumba, which holds rights over the remaining stake in Sishen mine, also applied for the prospecting rights and appealed the Department of Mineral Resources' (DMR) decision to award them to ICT.
DMR had found nothing unlawful
But on Tuesday, mines minister Susan Shanbangu said the DMR had found nothing unlawful about ICT's application and upheld its decision to award the company the rights.
"Again, the shareholders of ICT have links with some in government," said Cosatu.
This is how business has been operating in the past decade, promoting narrow elitist BEE, it said, adding that the deal clearly appears to be a get-rich-quick scheme involving a so-called BEE consortium.
"The current BEE policy is based on the view that empowerment means giving millions of rands worth of shares to a few individuals, while they leave the overwhelming black majority as disempowered as ever. Instead of making a rich elite minority even richer, BEE should benefit the workers, including the unemployed and poor communities," Cosatu said.