Confusion reigns

We were one of the biggest critics of government’s failure to finalise the codes last year. We said that the lack of clarity was hurting the cause of BEE and therefore the economy and social fabric of the country. When the President complained about the slow pace of transformation, we explained that one of the biggest factors affecting BEE transformation were the conflicting comments regarding BEE.

When cabinet approved the codes in December we were thrilled and hopefully the first to praise them – at last everyone knew exactly where they stood and what to do to become BEE compliant. We said that even if the codes were not perfect, it would still be better to release them.

The first indication that something was wrong was that the dti failed to publish the codes. Numerous calls to the dti proved fruitless. Then, on 14th December the dti minister presented the codes and they were published. However it soon turned out that all the dti did was publish a summary of the codes. It gave us a good idea of their thinking and enabled us to work out a simplified scorecard. The detail was not available. For example we do not know how the “once empowered, always empowered” system will work. We do not know how points “adjusted for gender recognition” will work. The previous codes allocated an extra approximately 50% of points for black females for certain indicators, and we think this is how it will work. However, thinking is not good enough! Our clients want to know exactly what it is they should do, and how it will affect their scorecard.

At one stage, dti said that the codes will be published in January 2007, and gazetted soon thereafter. Today is 2nd February and the details are still not available. Once delays like this are encountered the rumour mill starts. We were hearing that the codes will be published in January and only be gazetted in May, that the codes will be published and gazetted on 31st January, that the codes will be published in January and gazetted in February. Someone else tells us that the detail will be published on 6th February.
Many of these comments come directly from the dti themselves. It’s a great pity to have to criticise the dti, but they have not done a good enough job of communicating BEE to the population.

Confusion reigns even more – at this moment the government is still not even applying the BEE codes of good practice in its own dealings. An interesting report in the Business Report (30th January 2007) mentions how dissatisfied the dept of mineral and energy affairs is with Anglo Platinum due to its lack of transformation. Now the dept of mineral and energy affairs has set up its own transformation codes, some of which pre-date the codes of good practice. I’m not complaining about their policies, only that it is not consistent with the BEE codes. The same goes for the petroleum products amendment act of 2003 that included a petroleum charter. Once again this charter is not consistent with the latest BEE codes. Which codes or charter should Anglo Plats follow – the mining act, or the BEE codes? Well they have to achieve certain targets in terms in the minerals act, else they will not get their licenses renewed. Does this mean they can ignore the BEE act?

One point I do agree with is the need to transform. Without going into detail about the previous government, we all should have a good idea of what that means! However once the government starts laying down an objective standard of measurement of this transformation, I feel we can criticise their lack of consistency, and delays in following up on their own policies.

This continues to make life difficult for businesses, and also government. Companies are confused as to which codes to use, and how to evaluate their own suppliers. We see banks asking questions of their suppliers in terms of the financial charter, even though the supplier is a printing company. Eskom still use the ESKADAA for their suppliers. Government has to use the PPPFA (preferential procurement policies framework act) is adjudicating tenders. We know that treasury is working on consolidating the various acts, tendering processes and getting it all in line with the BEE act, but we are becoming concerned about the time it is still taking.

Charters

In December 2006, cabinet also approved various charters – the tourism, agri and construction charters. Now the BEE act clearly states that the charters must fall in line with the codes, and where there is a difference of interpretation, the codes must be used. Anyone reading these charters will see that there are large differences. It’s actually quite amazing that these industries could even produce a charter before they had seen the final codes.

Business Report, 30th January also quotes the motor industry steering committee as complaining about lack of clarity. They had planned on having two workshops in February to try to finalise the motor industry scorecard, but may have to delay it due to the details in the codes not being available.
One cannot blame anyone for perceiving that the motor industry is slow with its transformation, but the converse argument is truer – how can they create a charter without clarity on the codes. The ICT charter is also awaiting finalization for the same reason.

Our viewpoint on charters is there is not a sufficiently compelling argument for creating hundreds of charters. Many industries feel they are different and therefore need a charter, but in reality most industries have similar issues. The cosmetic industry began the process of creating a charter at enormous cost and then decided that their industry could quite happily function under the BEE Codes of Good Practice. We would like to see more industries agreeing to adopt the codes of good practice, rather than go the expense, time and hassle of creating, gazetting and managing their own charters.

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