Minister wants changes to BEE Act – EconoBEE Newsletter – 4 May 2011
Minister wants changes to B-BBEE Act
The Minister of Trade and Industry has reaffirmed the department’s decision to amend the B-BBEE Act including the Codes of Good Practice. In a speech before the Easter public holidays he mentioned some salient changes which will undoubtedly speed up transformation and broaden its reach to those people who it was designed to assist.
Despite the announcement by the Minister we had already published some of the changes we anticipated would be included in the amendments. Gazing into the crystal ball it turns out we were not far off.
At the heart of B-BBEE has always been the scorecard – a method of calculating levels of compliance.
The implementation of the B-BBEE act and its codes has been quite poor – only due to government choosing not to follow the B-BBEE act’s principles. Mining licenses are awarded based on a conflicting act. Tenders are awarded based not on B-BBEE principles, but using the PPPFA. This is what perpetuates the confusion between the different acts. Sure, we need to fix up many aspects of our country and the law – but the first around empowerment should be the conflicting acts.
I suspect that in July (as stated in the Ministers announcement) the government will make the required changes to the PPPFA (which is the domain of the Dept of Treasury not dti), and also make some minor tweaks to the B-BBEE act, and use this to try to kickstart the whole process again. The actual changes to the codes themselves, definitions, weightings etc will take far longer.
Lets look at some of the great positive benefits you can expect out of the changes to the B-BBEE Codes.
How changes to BEE Legislation will benefit you! The overwhelming concept is that BEE must benefit more black people. This will mean more emphasis will be placed on initiatives that are genuine and result in the economy growing. The elements that will gain most from this will be – Skills Development, Enterprise Development and Socio-economic Development.
However the biggest and most significant benefit for business will be the additional government business gained based on a good BEE status. This will result from changes to the government procurement act (PPPFA) and will award tenders based on a good BEE Scorecard and not an Ownership status. This is perfectly aligned with the sentiment that BEE is not about Ownership but rather empowerment.
Less emphasis on the Ownership element and more emphasis on achieving a good BEE Scorecard will help those companies who have already received a good BEE Status and encourage those who are yet to get a scorecard to start working on one. Most importantly this change will mean business can focus on their core work without any of their customers demanding a change of ownership.
All government departments, corporates and big business will be consistent in their measure of empowerment. Each one will follow the same principles in exactly the same way resulting in absolute confidence that what you have done results in the same result every time.
Using hindsight we look back at an article we wrote in 2006 – Why the slow pace of BEE Implementation. In this article we highlighted many of the issues that we still face today. However the good news is some of the more important issues can be ticked off the list.
We are looking forward to the changes as we know they will move transformation one small step further forward. The changes will see business grow, benefit employees, increase profits and encourage a whole new level of service delivery.
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EconoBEE Newsletter 4 May 2011
In this issue
Minister wants changes to B-BBEE Act
Prepare for BEE Verification
BEE Crash Course – Phase 1
In other news
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