Business chambers can restore order to the local economy

Piet Le Roux - Presenting

This is a revised version of the speech delivered at the launch function for the Pretoria Business Chamber. 

Once upon a time, everyone thought it was the state’s role to create a favourable business environment. For a while, it even seemed to work. There was access to the decision-makers and a fairly functional bureaucracy that could carry out decisions corruption-free. But over time, things got worse. 

Every day, the state – with its bureaucrats who know nothing about business – interfered more and more in issues that had nothing to do with it. Every day, the consequences of state failure bit anew: bankrupt municipalities, corruption, unpunished crime, dilapidated infrastructure, power outages, water outages, you name it. 

Many businesspeople complained and tried to influence legislation or begged for better policies, or even emigrated. Even if various politicians tried their best, coalitions included, the imbalances were too great. Each time attempts to reform the state from within were shipwrecked, and the decay accelerated. 

But at least it wasn’t all complete poverty: Fortunately, many businesspeople still managed to create wealth regardless of the difficult circumstances, but it was profit on the way to the abyss. They were getting rich in a place where they and their children would later no longer want to live. 

One day, a group of businesspeople decided enough was enough and started creating business organisations to take back control of the business environment. 

One of these organisations was Sakeliga, to which I am affiliated and of which my co-director Dawie de Villiers and other founders are members. It was an organisation for businesspeople who took up their duty to be stewards of the overarching business environment. 

Others started the Pretoria Business Chamber. It was an organisation for businesspeople from Pretoria who took up their duty to be stewards of their own local business environment. Whether it was Sakeliga or the Pretoria Business Chamber – these businesspeople were determined to show how organised business communities can offer solutions to state failure without being dependent on the state’s cooperation. 

As a result, businesspeople were suddenly no longer alone and overwhelmed, but for the first time in years – or even ever – could hire executive teams whose full-time job was to intervene in the business environment. Suddenly, there were business organisations with manpower well capitalised to do two things: 

First, to oppose harmful state power through litigation and rock-hard bargaining as independent, self-contained institutions alongside the state and not oppressed by the state. They could intervene and have contracts set aside, obtain interdicts, or obtain recognition through jurisprudence where they themselves intervened if the state was absent or hopeless. 

Second, to seize upon the power vacuum created by state failure as an opportunity to offer independent solutions. They tackled this wherever possible in collaboration with other civil society organisations – precisely those organisations that did not have a business focus but did not wait for the state. Yes, it was at an extra cost because the state still levied high taxes, and the businessmen were initially not strong enough to renegotiate levies and taxes where they themselves met the needs of the community, but even that would later change. 

Meanwhile, these business organisations – and no longer the state – began to become the providers of a favourable business environment characterised by its security, functional shared infrastructure and protected freedom of trade and property rights. 

As a result, these business organisations’ moral and practical authority has increased immensely. The public greatly appreciated these businesspeople, who, in addition to providing valuable goods and services and benevolence, also fulfilled their most basic civic and social duty, namely to ensure a favourable business environment from which everyone could benefit. 

Over the years, these businesspeople formed the largest network of business organisations that the country has ever seen: a network in which each of the organisations was independently strong and could cooperate with the others because they shared a powerful strategic insight: that the final responsibility for a favourable business environment is not the state’s, but that of the businesspeople themselves. A favourable business environment must be state-proof – and its establishment is entrepreneurs’ great public good. 

Eventually, order and prosperity returned to business environments and the communities they serve. A failing state’s economic power vacuum was not filled with gangs that spread disorder and act in self-interest but with business organisations that could create a free, effective and safe economy. The whole of society benefited from this thriving economy – and the towns, cities, and regions once again became places where people wanted to live and could thrive as members of their communities. 

Some time ago, we already made the strategic decision at Sakeliga not to establish local chambers of commerce that focus on local affairs because this is not our strength and is not what our members finance us for. Sakeliga’s task is to focus on the overarching issues shared by many businesspeople and chambers of commerce, such as a strategy on how to deal with state failure, constitutional litigation on issues of commercial import, and alternative, state-resistant economic mechanisms and infrastructure that are not limited to the local level. 

But who is going to take responsibility for the local business environment? For the handshake with the municipality, the coordination with other civic organisations, and intervention to take care of safety, infrastructure or property rights and freedom of trade if the municipality is AWOL, as often happens? For a long time, there was no one. 

At least, until recently, for years, no one was aware of the business environment in Pretoria and its shared interests. Isn’t that actually unthinkable? That in the whole of Pretoria, with all the combined billions of rand worth of assets and turnover here, there is no one who looks after the Pretoria business environment as a whole? 

The Pretoria Business Chamber is here to change that. I would like to share three points we at Sakeliga think are important for Business Chambers: 

Stick to core business: creating a favourable business environment in the public interest regardless of the state. Not to create a better state – that is never an end in itself. Businesspeople are not agents of the state. The aim is also not to make members better businesses but to provide members and the communities they serve with a better business environment. Business chambers are, therefore, not a place where you come to do business; it is a place where you come to accept responsibility for the business environment. The business that may arise for you is a side benefit. 

Serve shared interests, not sectional interests: the role of a business chamber is not to solve one or two influential members’ problems with the municipality, but to solve the problems that affect everyone. As with all good businesses, where buyers and sellers get value, the business chambers’ activities must always be in the interest of both the communities around it and its members. If an activity is not in the public interest, it is probably not a good idea. 

Establish a full-time executive team: some of us – myself included – are sometimes tempted to ask the founders what they will do first, with the expectation that they themselves will carry out the mission of the organisation. However, we must realise that the founders of the Pretoria Business Chamber’s first milestone is the establishment of this vehicle, and that the second milestone is the appointment of a full-time executive team. 

I repeat: it is unthinkable that in the whole of Pretoria, there is not a single person whose full-time task it is to take care of the business environment. The Pretoria Business Chamber is the vehicle to change this. Fergus Ferguson and his co-directors cannot – just as none of us can – try to carry out the mission of this chamber of commerce between eight and twelve in the evening. They offer their time and expertise to provide a framework and oversight for the future executive team. 

Our rough calculations at Sakeliga indicate that a business chamber that really wants to impact its business environment needs at least R100 000 per month. The first win for this business chamber and for us as members will be to appoint a full-time driving force who can work day and night to establish the chamber’s control over the business environment in Pretoria. 

Sakeliga’s affiliation program aims to build an unstoppable network of independent business organisations that share a golden strategic thread: to take back responsibility for the business environment and create a state-proof business environment. 

One of the activities with which we at Sakeliga have achieved impressive success is litigation on issues such as electricity, Black Economic Empowerment (BEE) and property rights. We have even saved billions for the municipality here in Tshwane by reversing former mayor Kgosientsho Ramokgopa’s illegal electricity meter contract – the so-called PEU Capital case. 

Although we always remain open to litigating with partners on wide-ranging matters of principle, there is no reason why the Pretoria Business Chamber cannot also litigate in its own name. In fact, I already know that they will often be able to do this better than Sakeliga because with more local knowledge and locus standi they will normally be better placed to go to court quickly and appropriately. In addition, Sakeliga’s litigation focus is on cases that normally take a long time because they involve substantial constitutional questions rather than the relief of urgent state failure. The Pretoria Business Chamber is itself perfectly placed to intervene urgently and does not need Sakeliga to litigate. 

In the meantime, we must also remember that litigation is always only a means to an end, never an end in itself. Legal action will also never be sufficient to create a sufficiently state-resistant and thriving business environment. This must be supplemented with practical interventions on its own in infrastructure, safety and trading conditions. 

I recently became a member of the Pretoria Business Chamber because I have business interests in Pretoria and am therefore co-responsible for the business environment here. Sakeliga is now also a member of the Pretoria Business Chamber, and we are proud of this organisation’s affiliation with Sakeliga. 

If you are already part of Sakeliga, become a member of the Pretoria Business Chamber today and part of a group of people who take responsibility for the local business environment. This is going to be the difference between successful and failed local business environments nationwide.