Nicky & Son – Making History
August 21, 03I hate vacations. Some big things always happen when you are away – and you find out about them too late to properly assess the significance. This year was no exception. Nicky and Jonathan Oppenheimer launched their Brenthurst Initiative, which is really a blue-print on how to reform the political and economic environment in South Africa to instill investor confidence, to achieve black empowerment and guarantee significant economic growth at the same time. Significantly, the project was billed as a private father and son initiative and wasn’t done in the name of either De Beers or Anglo American. Why would this be of any interest to the diamond industry that still hasn’t adjusted yet to the soon-to-be-reduced sightholder list, a further rough diamond price increase and totally stagnant polished markets?
This Brenthurst Initiative will impact all of us. Launched in the presence (and with the endorsement of) President Thabo Mbeki and some 150 ministers and government leaders, Nicky Oppenheimer has now launched his first major and personal entry into South African politics. He is stepping into the footsteps of both his father and his grandfather, who served in parliament – to serve the country and to serve the diamond industry. In his maiden-speech in parliament, in the early 1920s, Ernest Oppenheimer declared “I am largely interested in the diamond trade, both as producer and merchant………..[but] my presence here shows that I put country before business, and that I have only one desire, and that is to be able to render useful service to South Africa.”
Ernest’s son Harry entered into his father’s footsteps and also served in parliament, where he was one of the first South African statesmen to call, when the apartheid policies were still very much the law of the land, for constitutional reforms and equal rights among all Africans. Harry had incredible guts and courage.
During the summer of 2003, Nicky didn’t announce whether he is thinking about running for parliament some day. But when he professes his conviction that he “has been troubled by the nervousness over South Africa’s [businesses’] risk and reward ratios which seems to inhibit investment decisions – both local and from abroad,” and expresses his ideas as to how government should accelerate black economic empowerment in ways which would strengthen investor confidence” and thus “expand the South African economy for the benefit of all its people” he certainly has made a commitment to follow through.
It is no secret that Nicky Oppenheimer has been greatly concerned with some of the taxation initiatives (high royalty on diamond mining turnover) currently pending in South Africa. This is not that dissimilar from the situation his grandfather faced when, in the early 1920s, leading government politicians were urging to nationalize the diamond industry. Said Ernest Oppenheimer in parliament, facing the government representatives directly: “It appears to me that the best bowlers are always outside the field. They don’t play, they don’t intend to play, they don’t risk their money.”
Nicky made it a point to refer to his father. “It was my father’s belief that South Africa would only realize its true destiny when everyone could engage fully and irrespective of race in every strand and level of its economic life. In putting forward our ideas, Jonathan and I hope we are taking his legacy forward and closer to the day when his hopes are fulfilled; when everyone will enjoy his or her fair share not only of the existing cake, but in an ever-expanding and vigorous economy with more than enough for all.”
The Oppenheimer's are calling for a dialogue, a national debate. But it is hard to believe that Nicky will now become an observer. It seems that the De Beers Chairman has started to test the political waters, that he seems determined to make his own historic contribution to the development of South Africa. The Oppenheimer's have always been regarded in South Africa as something akin to the Royal Family in monarchies. [One less respectful critical newspaper wrote, “South Africa's richest industrial family has floated a scheme to award companies tax breaks for helping to speed the country’s post-apartheid transformation.” That sounds less flattering, but it makes the point.] The Oppenheimer’s profile is very high; Nicky and Jonathan have now given the signal that they are, in Sir Ernest words, “willing to play.” We believe that in the history of the Oppenheimer Family this summer presents a turning point. Nicky seems to signal his willingness to accept a responsibility to shape the future of South Africa. Nicky has grown from businessman to statesman, committed to accept the legacy of his forefathers. Indeed, Nicky recalled his father’s 1954 speech in which he said that “the safety, stature and moral progress of our country depend on building up a sense of common loyalty, of common patriotism; of a willingness, if necessary to make common sacrifices: of a conviction of common nationhood in which all South Africans can share.”
Of interest to the diamond industry is that the proposals contained in the Brenthurst Initiative were drafted with the assistance of Bain & Co., the strategic consultants that brought us Supplier of Choice. Actually, some of the very same individuals involved with diamonds were actively engaged in the initiative – and there are resemblances. Nicky Oppenheimer has first brought about the transformation of the diamond industry from an artificially controlled monopoly into a competitive demand driven business in which accelerated growth on the demand side is seen as the key to sustainable prosperity [i.e. accelerated growth in demand.] This diamond exercise may just have been a “learning exercise” for the far greater challenge: the political and economic transformation of South Africa. Not unlike the selection process of sightholders, under the new initiative South African companies would be awarded points according to a transformation performance scorecard and those who qualify would benefit from corporate tax incentives.
As one newspaper said: “South Africa’s most powerful family dynasty have committed themselves to speeding up black economic empowerment and the transformation of the nation’s economy.” It seems obvious that the Oppenheimer Family – and especially Nicky – has now embarked on new challenges. How this will impact the industry is not something we want to speculate on at this time. Nicky and his son ought to be congratulated – and we wish them well!