EconoBEE Newsletter 7 April 2009 – BEE – Survive Economic Turmoil
How big is your business?
Save Costs by choosing the BEST BEE Scorecard Methodology
A BEE Scorecard is a clear advantage in today’s tough economic climate.
Many companies were spurred on to get a BEE Scorecard at all costs which unfortunately has also caused big problems. This resulted in companies getting a BEE Scorecard with little or no points which could result in lost business opportunities - remember a good BEE Scorecard = Business. In addition these companies had no idea why they had done badly on their scorecard, nor any idea of how to improve their overall score.
What went wrong?
This is rather simple, the starting point for most companies is actually the finish line. What I mean by this is: The BEE Codes of Good Practice encourages companies to ask their suppliers for a BEE Scorecard. This BEE Scorecard is used in the final calculation on preferential procurement. Ultimately the final task of a company is to produce a BEE Scorecard not the first. If a company wants to succeed they will need to follow the correct steps in the correct order.
EconoBEE has prepared a step by step guide to help you prepare your BEE scorecard
News from blog.econobee.co.za
Financial Sector Charter Collapses
So, the Financial Sector Charter has now collapsed. This is one case where I can say “I told you so”. For years I have been promoting BEE, but stating that the charters are a total waste of time - the only people who benefited were the lawyers and consultants. I have previously disclosed that I was asked to comment on the legal charter for the department of justice and constitutional development and earned a couple of thousand rands before they listened to me and decided to abandon it as a sector code.
In the case of the financial charter, many banking people criticised me when I stated that the FSC was not following the law, was using incorrect definitions etc. They promised that it would be brought in line with the codes. It did not.
What is more interesting is that the financial sector still seem to have absolutely no understanding on BEE or what a charter, and sector code is all about. The news report is that the banks and government could not reach consensus on the ownership issue. Apparently the banks wanted the ownership target to be 10% and the dti 15%.
I wonder if the banks actually understand what the BEE codes really say and mean? The truth is that they have always had to produce a BEE scorecard. They HAD to use the codes of good practice unless the FSC had become a sector code. In the event Nedbank has actually produced a BEE scorecard based on the codes, while ABSA and Standard Bank have a ridiculous looking FSC scorecard showing that they are level 2s. Seriously, this is not April 1st!
The sad thing is that many verification agencies have chosen to ACCEPT those FSC scorecards even though they carried no legal weight. From now on, all banks - the entire financial sector - must use the Codes of Good Practice scorecard. They have never had any discretion previously and certainly do not have any longer. I personally am going to make sure that the NCR and other financial regulators follow government law and demand a scorecard from the banks.
Now what do those codes say about ownership:
Target = 25% plus one vote.
What did dti want: 15%.
What did the banks offer: 10%.
What are they now going to have to follow: 25% plus one vote!!!!!!
Is the financial sector mad not to have gone along with the dti’s request for 15% ownership? Don’t they see their stupidity?
The National Treasury has refuted news reports that the FSC no longer exists. Please read.
I am dumbfounded. It is patently obvious that National Treasury is either totally confused or deliberately trying to sabotage B-BBEE.
For the information of National Treasury, any charter comes into force when the dti gazettes it as a sector code in terms of the Codes of good practice. Until then it is a DRAFT charter and carries no force of law, is not considered a charter or code of good practice and no one may use it in calculating their BEE status as per the B-BBEE Act.
National Treasury may not give any special dispensation to the financial industry to use the FSC, as they do not control the B-BBEE act - the dti does.
Much as I have respect for minister Trevor Manuel, there have been numerous reports of him condeming BEE. Is this another strategy of his to discredit B-BBEE and the dti?
BEE Points = Business
That's it for the time being.
Keith and the EconoBEE Team
In this issue
EconoBEE is a BEE consultancy who has developed extremely effective tools to measure and implement Broad Based Black Economic Empowerment. Our services focus on the business side of BEE. Our services include EconoBEE Scorecard, BEE Scorecard Workshops, EME Pack, Document Pack, EconoLog and the 10 Step Process to BEE Compliance.
Our company supports various organisations and drives the BEE Expert Group to help maintain and develop knowledge in the BEE industry.
Look out for next month's newsletter
Copyright © EconoBEE - Helping you and the Economy Grow . All Rights Reserved.