Why the PIC should divest from Curro Holdings - Equal Education

Doron Isaacs says Curro Roodeplaat practiced racial segregation by concentrating whites Grade R pupils in a single class (Feb 9)


Monday, 9 February 2015

Tomorrow Equal Education (EE) will be picketing the Public investment Corporation (PIC) to demand that there be an end to state-sponsored financial support of racial and economic segregation in our schools. EE will demand that the entirely state-owned PIC divest itself from Curro Holdings. 

We learnt on 29 January from a report on Eye Witness News, that the Curro Foundation School in Roodeplaat has been practicing racial segregation by assigning learners of different races to different classes. Curro Holdings regional manager, Andre Pollard, first responded by saying that the segregation was so that; "children are able to make friends with children of their culture".

The second response, the more honest response, was that they were responding to the "white flight" in their schools. Pollard said there was pressure by white parents to not have their children sit with more black kids in class. In order to keep the white learners from leaving, Curro decided to implement a policy that racially segregates pupils. 

Curro Holdings also openly discriminates on students based on their families economic status. At the top are "Curro Select" schools, costing R3,400-R6,200 per month, with 20-25 learners per class and "superior facilities". At the bottom are Curro's Meridian Schools, costing R1,000-R1,500 per month, and having 30-35 learners per class. In between, in two other gradations, are regular Curro Schools and Curro Academies. As Curro explains to parents, these schools are "based on different models and operating structures and fees therefore vary vastly." In short, students only get the education they can afford.

This is not very different from parts of the public school system, which also regulate access based on fees. But in the case of private schools there is no statutory Fee Exemption Policy to accommodate disadvantaged students. This problem is particularly troubling in the for-profit schooling sector, where fee-exemptions will directly reduce their bottom line.  

Curro produces a 29% profit margin in return for shareholders. This money could be used to provide fee exemptions for low-income students. Instead, Curro's shareholders have decided that they would rather pocket it for themselves.

In July 2012, Curro, the Public Investment Corporation (PIC) and the Old Mutual Investment Group of South Africa (Omigsa), through the Schools Fund, joined forces to provide R440 million in capital for the development of a group of lower-fee Curro schools (known Meridian) to accommodate approximately 20,000 learners. This investment is still ongoing and it is a long-term investment in the for-profit education sector. The PIC's mission statement says the PIC should amongst other things "contribute positively to South Africa's development". This is incredibly important given that the PIC is completely government owned and established by way of an act of Parliament (Public Investment Corporation Act).

According to section 3(2) of the Public Investment Corporation Act, "the rights attached to the shares in the corporation... must be exercised by the Minister [of Finance] on behalf of the State". Section 6(4) allows to Minister of Finance to "issue directives to the board regarding the management of the corporation if it is in the public interest". 

The PIC states that it is "accountable to the millions of South Africans on whose behalf we invest". And claims that "[w]hile delivering healthy returns for our clients is a top priority, the PIC also contributes to the broader socio-economic development of South Africa". It is also a signatory of the United Nations Principles of Responsible Investment (UNPRI). This declaration commits the PIC to incorporating Environmental, Social and Governance (ESG) issues into its investment decisions and role as an active owner. According to UNPRI reporting framework for 2013, the social aspect of these ESG issues include those "relating to the rights, well-being and interests of people and communities" as well as "diversity".

The investment into Curro Holdings by PIC was made through its Isibiya division, which is meant to make investments in "projects that have a strong, positive developmental impact."

We can therefore conclude that the PICs investment in Curro Holdings - which promotes both racial and economic segregation - violates its own mission statement. It violates its responsibility under the UNPRI. It violates the express purpose of the Isibiya division.

We are therefore making the following demands: 

1) The PIC divest itself from Curro Holdings within 30 days. 

2) The PIC submit itself to an external review of all of its current investments in the education sector. As a first step, it should release a press statement detailing the nature of its investments in the public sector.

3) The PIC release a statement apologizing for violating its own mission and the public trust by supporting an education system that has instituted racist practices. 

4) The PIC should commit to a process of meaningful consultation with all sectors of society on any future investments in the education sector.

5) The Minister of Finance should issue a directive to the PIC to divest from Curro. 

Our parents and the generations before them fought against racial and economic segregation as well as discrimination of any kind. We have committed ourselves to the cause of quality and equal education in our lifetime. Tomorrow members of Equal Education will be picketing at the PIC offices situated at 41 Matroosberg Road, Block C, Riverwalk Office Park, Menlo Park, from 11am. A memorandum of demands will also be handed over. 

Statement issued by Doron Isaacs, Equal Education Deputy General Secretary, February 9 2015

Click here to sign up to receive our free daily headline email newsletter