Why do we have BEE? – EconoBEE Newsletter – 24 June 2014
There is still time to implement all the activities needed to maintain your BEE points on the Amended B-BBEE Codes. Our Managed Service is an ideal solution for any business wanting to be pro-active when implementing B-BBEE. Through a long term view we are able to continuously keep track of progress, advise on important changes as and when the changes happen and ensure success through every single transaction.
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Why do we have BEE?
An article is currently doing the rounds stating “All whites now finally excluded from the South African job market”.
We’ve seen these comments – they’ve been going around since December 2011. The headline is factually incorrect, and many of the facts in the article are deeply twisted.
Let’s look at some of the facts: It is absolutely not true that “all whites are finally excluded from the job market”. If that were the case, whites would not have jobs. The latest CEE report still shows serious inequity in the job market, in favour of white people. For example, in 2014 White top managers still accounted for more than half of all top managers.
The facts continued: The fact is the B-BBEE Act and the Codes of Good Practice has always used a definition of “black”. White – people or women – were NEVER included in that definition. Prior to the Amendment Act, the definition of black was contained in the Codes of Good Practice. Companies have never earned B-BBEE points from employing white women. All that has happened is the Bill has moved the definition of “black” from the Codes to the Act. This means that the definition of “black” has not changed since the first codes were gazetted in 2007, and prior to 2007, the draft codes used the same definition.
An interesting anecdote is that the early draft financial sector codes did not use the same definition for black as the codes. However when they were finally gazetted at the end of 2012 they used the correct definition.
It is clear that the definition of “black” has never included white women. The codes have been in operation since 2007, and as shown above in 2013 white people still make up the majority of top managers.
The B-BBEE Act and Codes do not seek to eliminate white people from the marketplace.
Other facts: The PPPFA used to take into account white women (the PPPFA used HDI – historically disadvantaged individuals South Africans) and the percentage of white women in top management would count for government tenders. This was always seen as a problem, and as early as 2004 the treasury department started looking at changing the regulations. Another problem occurred when it encouraged the tenderpreneur issue.
It was decided in 2011 that the PPPFA would use BEE levels as one of the criteria in evaluating tender submissions. Currently the only criteria that the PPPFA uses for all tenders evaluations are: Functionality, Price, and BEE Level.
The B-BBEE Codes awards points based on seven elements – ownership, management control, employment equity, skills development, enterprise development and socio-economic development, with different rules for various industries – depending on the annual revenue of businesses. It is as feasible for white owned and operated businesses to win tenders as any other business.
At no stage does the PPPFA or the BEE Amendment Act (which was gazetted on 27th January 2014, but has not yet been proclaimed) or the Codes exclude whites from the job market.
Companies can, and do achieve high levels of compliance with white people.
The B-BBEE Amendment Act does contain a clause (Section 3) that states that the B-BBEE Amendment Act is to be the act that prevails. If there is any conflict between this act and any other act – unless the minister makes an exception – the B-BBEE Amendment Act applies. This tries to ensure that there will be only one method of measuring economic transformation in South Africa, being the B-BBEE Codes. It should be noted that other acts and govt departments do sometimes operate in contradiction to the B-BBEE Codes. The most glaring example of contradiction is the mining act which has a widely differing methodology to the B-BBEE Codes.
In our opinion, the B-BBEE Codes are the best set of rules to implement in order to ensure economic transformation, compared to other initiatives such as the mining act.
Our research shows that most of the largest businesses in South Africa indeed have achieved good BEE levels of compliance. This includes those with the largest market capitalisation, eg. SAB, Naspers, MTN, Bidvest, Vodacom, as well as all the banks, the top accounting firms, many of the largest construction companies and the top oil companies.
However, in terms of number of companies, we estimate that less than 100 000 companies have a valid BEE level or certificate.
Apply best practice – contact us on 011 483 1190 and talk to us about our Managed Service so that we can help you manage your BEE process.
Let our consultants save you time on B-BBEE.
Preferential Procurement – Save Time by using the BEE Procured database containing over 50 000 BEE Certificates. Managed Service: Our consultants can phone your suppliers for a BEE certificate – Managed Service.
While there is demand for a B-BBEE Scorecard someone will be taking advantage, shouldn’t that someone be you…
Want us to manage your BEE Process – Managed Service.
Turnover below R10 million – find out how to get your BEE Exemption.
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EconoBEE Newsletter 24 June 2014
In this issue
Why do we have BEE?
In other news
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