Original publish date – Thu, 02 Sep 2010 08:41:00 +0000, Keith

Complaint submitted to the Public Protector

EconoBEE has submitted a complaint to the Public Protector over the refusal of many government departments and public entities to follow the Broad-Based Black Economic Empowerment Act.

The act states that all government entities must take into account B-BBEE status in awarding tenders, issuing licenses, concessions amongst others. Most government departments and entities have steadfastly refused to follow this law. In particular, most government entities do not do this when issuing tenders or licenses, especially mining licenses. The act is clear: Section 10 of the B-BBEE Act states that government entities “..must take into account, and as far as is reasonably possible, apply any relevant code of good practice..” when an organization applies for licenses, tenders etc.

This clearly implies that every tender and license form should also ask for the B-BBEE certificate of the applicant. At the same time, government entities must disclose how they will apply that B-BBEE status. The hope is that from now on broad-based criteria will begin to be used by government in assessing tenders and licenses. Government is also bound by the PPPFA (Preferential procurement framework act) which governs how tenders are issued. Traditionally government has recognized that the PPPFA and the B-BBEE acts need to be aligned and have promised this for the past 6 years. What some people in government probably do not realize is that the B-BBEE act is in force and section 10 needs to be followed just as much as any other act. Government does not even follow “narrow based black economic empowerment” an outdated concept as defined in the codes.

There is no reason to wait for the alignment of the two acts, which has been discussed since 2004. The B-BBEE act requires government to take action, and they have not done so. Ironically the office of the Public Protector itself is in breach of the law in its own procurement processes by not taking into account, and as far as reasonably possible, applying the codes. Most government entities simply ignore the codes.

This is the reason for asking the Public Protector to get involved and order that the process be started. We would hope that once this is done, the many complaints about “tenderpreneurs” and awarding of licenses based on unfair practices and fronting will be reduced and the good cause of broad-based black economic empowerment will benefit.

Second Complaint

A second complaint was also submitted to the Public Protector. A clause in the B-BBEE Codes of Good Practice under the section “Application of the Codes” states that public enterprises and specified government entities must produce their own B-BBEE scorecard. The clause states that those entities are “measurable” under the act, giving them no discretion to comply or not. So far, a few public enterprises have produced a scorecard. Those that have include City Power, ESKOM, SAA, Telkom and SABC. Most have not. The list of those not complying include SANAS (the very agency that accredits B-BBEE verification agencies, the BEE Council, CIPRO, National Empowerment Fund, as well as every government department. The law requires them to be measured, so we have asked the Public Protector to insist that these organizations follow the good example set by tens of thousands of private enterprise organisations and produce their own valid B-BBEE certificate, as required by section 3 of the Codes.

We hope that this will encourage more compliance amongst the rest of industry and they will see government leading the way, and implementing broad-based BEE the way to should be. It will also help these government departments to understand the trials and tribulations that private enterprise faces in becoming compliant.