EconoBEE Newsletter – November 2007 – EconoBEE on the Warpath

EconoBEE on the Warpath

The only BEE consulting company that is fighting for your rights.

We at EconoBEE have always and will always continue to support the BEE act and codes of good practice. We like the way the dti has phrased them, and we have a 100% success rate in explaining true BEE and helping companies make the decision to embrace true BEE.

However far too many organisations, including government, tries not to implement true BEE.

Our aim is to ensure that all enterprises follow the codes, and we vehemently disagree with any organisation that tries to change the rules, as it only hurts true BEE and discourages enterprises from taking the first step in their BEE journey.

That is why we have submitted a complaint to the competition commission regarding ABVA and some “verification agencies” regarding their insistence that they will only accept a scorecard from a fellow ABVA member. This was also the reason we created the BEE Expert Group.

That is why we are creating a list of shame, which includes Telkom and Vodacom, who refuse to give us a scorecard because they say they are awaiting the release of the ICT charter – which is still 2 years away. ABSA is another on our list – they insist on their suppliers using only an accredited agency, while acknowledging there are no accredited agencies. Nedbank has given us a scorecard based on the 2005 Financial Services draft charter, not even the 2007 codes, which are still not sector codes.

These actions are simply hurting businesses, and the cause of true BEE. Demands from companies like ABSA simply increases your costs without benefiting BEE, and is contrary to the codes.

The organization really at fault is the dti (Department of Trade and Industry) as it has promised to issue statements around clarification of the codes and verification, but its silence is deafening. If our initiatives result in clarification and consistency in the codes we will have achieved our objectives.

Other than naming and shaming organisations there is little we can do to big business, forcing them to become compliant, unlike the situation where they can force smaller businesses to react.

However the B-BBEE Act, section 10 states:

Every organ of state and public entity must take into account, and as far as is reasonably possible apply any relevant code of good practice issued in terms of this act in

  • determining qualification criteria for the issuing of licenses, concessions or other authorisations in terms of any law;

  • developing and implementing a preferential procurement policy;

  • determining qualification criteria for the sale of state-owned enterprises; and

  • developing criteria for entering into any partnerships with the private sector.

It is clear that a government organisation must take into account an enterprise’s BEE status, even if they cannot reasonably apply the code. For example, while Telkom can ignore my requests for a scorecard, they cannot ignore ICASA’s request. ICASA is a public entity and must take the act and the codes into account. The law does not lay down what the score should be, but it does insist that ICASA at least ask for Telkom’s scorecard. In this way Telkom will have to respond, and use the generic codes of good practice in their scorecard. Their insistence on using the ICT charter will have to be changed. Ironically Telkom also use as an excuse the fact that there are no accredited verification agencies to produce their scorecard! It would be interesting to hear a discussion between ABSA, ABVA, Nedbank and Telkom!

We therefore call upon ICASA to ask all organisations that it has jurisdiction over to give them a proper BEE scorecard.

Similarly we call upon the Financial Services Board and National Credit Regulator to follow the law, and demand a scorecard from all financial institutions. We call upon all other regulators and licensing offices to do the same. Where reasonably possible we would like to see them applying the codes as well.

I am sure that if government starts following the law, exactly as it was intended, then our job of encouraging all other private enterprises to also become compliant will be easier, since government and public entities will be leading by example.

China and South Africa – Giant Growth Opportunities

I sometimes like to compare South Africa to the Chinese economy.

Some 7 yeas ago China was a sleeping giant. It had no great economy, but a huge population and lots of natural resources that had not been utilised. Then it won the rights to host the Olympics.

This may or may not have been the catalyst, but something amazing has happened in the past 5 years. The sleeping giant awoke. The economy took off, with growth rates of more than 15% per annum. Many commentators believed that China would not be capable of hosting a decent Olympics.

Maybe because of this, the Chinese government and its people have made great strides in the economy. Now China is poised to become the super-power of world economies. Already it has the world’s largest bank, by market capitalisation, and the world’s largest petro-chemical company. Our own Standard Bank has as its 25% shareholder that Chinese Bank. Many cars you see on the road today are Chinese models.

Now to compare South Africa to China. We too have resources. We too have the rights to host the greatest sporting spectacle in the world with the 2010 Football World Cup. We have just won the Rugby World cup. We should be able to grow at 20% per annum. We too have our detractors who believe we cannot be ready for 2010. There is no reason, other than apathy and negativity why we cannot achieve relatively more than China. With great respect to our Chinese friends, South Africa has a better constitution and democracy than China. We have great companies with good business leaders and excellent resources.

All we need is to stop being so negative and we all can benefit!

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