What it takes for a Sectoral Association to be recognised as a Statutory Body.

In my opinion

Dr. Ivor Blumenthal

It seems to me that in South Africa, every Industry Association aspires to become enshrined in legislation, as a Statutory Body. As if being a Statutory Authority will somehow create a monopoly for the existing voluntary Association and its Office Bearers which will prevent other legitimate Associations from competing for membership. Those calling for Statutory recognition genuinely often seem to believe that becoming a Statutory Body will position the Association to be automatically recognised as the dominant voice in an Industry, capable of demanding and automatically becoming entitled to respect and compliance from all players, not only those who had previously been voluntary members.

None of this is the case, however.

By a Minister agreeing to create a Statutory Body, there are express Laws and Regulations against creating monopolies which are ring-fenced and which result in monopolistic implications. A Statutory Body is statutory because it’s existence is enshrined in legislation and it is linked to one of the many Ministries which collectively operate as Government. It, therefore, becomes formally recognised and acknowledged by Government and automatically therefore by all Social Partners i.e. Business, Labour and Government. This distinguishes it from a Voluntary Association composed of members who on a voluntary basis collect for purposes of identity, recognition amongst peers and activities designed to enhance the Industry as a whole.

To be recognised as a Statutory Body generally requires that Industries, which have identities in common and which identities overlap, are grouped on a Sectoral basis. It is highly unlikely that a Statutory Body would be recognised for one Industry on its own.

In my experience as a Strategic Consultant to Business, particularly in this volatile and racially loaded politicised environment which we operate in at present, perhaps the most critical reality which Organised Business faces, is that whereas Ministries are sometimes open to allowing for new Statutory Bodies where they make logical sense, in allowing for such a legislated formation, Ministers are often quick to impose rather than recognise such authorities.

An imposition of a Statutory Body, therefore, implies that some Ministers will create Statutory entities, by marginalising and ignoring current Organised Industry or Sectoral groupings. Some elements in our Government, intent on extreme methods of redress, see Statutory Bodies as the ultimate form of transformation. Transformation on steroids. A method of imposing new prohibitory rules on a collection of unsuspecting Industries within a Sector and a completely new and different group of leaders who do not come from the Sector or have no long-term history in that sector. Leaders instead who are people that are deployed by Government and Organised Labour intent on breaking the Sector loose of historical leadership and direction and providing Government and Trade Unions with access to the wealth and opportunities inherent in such a Sector.

The message to Organised Business in this regard, therefore, is to be careful of what you wish for because it may come, but at the expense of your own involvement.

The secret, I regularly counsel Business entities wishing to pursue this route, is to “BE the Statutory Body before asking to be recognised by Government as that Statutory entity”. The only conclusion which should be permitted is that there should and can be no other organisation which may be considered to be fit-and-proper to assume that mantle as the logical Statutory Body which should be enshrined in legislation. Even then, there are no guarantees. Not if you consider that this Government will generally view its Statutory Bodies as vehicles for Transformation and Change.

Of course, I will also counsel Organised Business, that being the Statutory Body sometimes obviates the need to be recognised as such by Government. That it is more important to have popular support than formal legislated recognition. That it is more critical to have the involvement of voluntary members than to confine one’s legitimacy to the recognition and consequent constraints imposed, from a Government which in the eyes of the majority of the business community is often considered itself, to be extremely illegitimate.

Nevertheless, legislated or not, formalised or voluntary, what an aspirant Voluntary Association wishing to become an enshrined Statutory Body must acknowledge is that the scope of its operation needs to be broad and all-encompassing as does its scope of potential membership.

Within that scope needs to be the well-defined and operationalised constitutional roles as The Trade Association, The Employer Association, the Professional Body, sometimes including the Export Council and always including the responsibility of being accountable to the Public in-general not just for Competency but especially for the Behavior of individuals and companies included in the scope, over which that Statutory Body presides.

To be effective as the single most critical organisation in a Sector, though not necessarily always recognised by Government, requires a strong willingness to Transform the Sector. Transformation relates not just to the obvious which is the dominant race of those working in, managing and ultimately owning the businesses which constitute the Industries which constitute the Sector. Transformation relates equally to the equitable distribution of gender of those who work in, manage and own the Sector. However, it also relates to the acceptable percentages of the disabled who are seen to be active in any given Sector.


These are not all states of current existence. What they need to be are aspirant target categories recognised as sufficiently important enough to have to set out programmes for implementation and objectives to be chased, within time frames which are generally acceptable and achievable by all Social Partners.

It is under the guise generally of Transformation that in some Industries, race and the clear advancement of the agendas of the few, marginalise and cleanse Industries and entire Sectors, of the capable and competent, decimate Sectors of standards and quality, and instead ensure the installation of mediocrity, negligence, lethargy, and apathy.

That is why the only successful mantra which applies is to “BE the Statutory Body on a voluntary basis before asking to be enshrined in legislation as such” and even then don’t take it for granted that Government and Organised Labour will do the right thing.