Finance Minister calls for BEE review

The finance minister, Trevor Manuel has been quoted quite often recently as saying that BEE needs a review. His comments, most recently in a Financial Times interview, relate to black tokenism and ownership issues.

His comments will strike a chord with many people who find reason to complain about BEE not really empowering black people in general. All that most people see, and now also presumably the minister, is a small group of black people becoming very rich, and the benefits not flowing through to the mass population.

They are not wrong that this is happening. They are wrong when they lay the blame at B-BBEE.

I have enormous respect for the finance minister, but after his outburst I seriously question his knowledge of BEE, in particular the BEE codes of good practice. There is nothing wrong with the codes – what is wrong is the implementation, or more accurately the interpretation of those codes, by mainly government organisations. The minister’s own department – national treasury has still to reconcile the PPPF act with the BEE act. At the moment if you want to do business with government, including the minister’s own departments you HAVE to follow a policy that is IRRELEVANT to BEE. The PPPFA is the overriding act with its pre-occupation with management and ownership. If you follow the BEE codes of good practice, and submit that scorecard to government, or NGOs, or government owned companies, such as ESKOM or TRANSNET you WILL lose out on the business.

I have been looking at a request for tender for BEE training that a government department has issued. They want a company to train them on BEE, but will evaluate the proposal based on issues not related to BEE!

Some of the biggest industries in the country, which indirectly fall within the finance minister’s portfolio, i.e. the finance and banking industry, have created a charter that is contrary to the BEE codes. If you want to do business with a bank, you cannot tell them that you are a level 2 QSE – they are not interested in your scorecard – they are interested only in black ownership and black management, because that is the yardstick by which they are measured by government.

I’m personally not against emphasising ownership and management issues, but the codes DO allow a QSE to choose 4 of the 7 elements, and even generic companies can achieve good scores without ownership and management scores.

Try talking to the mining industry…. They will tell you that they have a BEE charter (this is not true – the minerals amendment act has set up a transformation charter). This charter dictates that all mining companies must sell 25% of their shares to black people by 2009. All the other good aspects of BEE, including socio-economic investment and enterprise development mean absolutely nothing.

Mr Minister, It’s no wonder that you feel BEE is not being implemented properly. The businesspeople who want to contribute to the country by implementing the codes of good practice are denied that right. They HAVE to follow methods that will not work.
Quite simply, Mr Minister, it is you and your cabinet colleagues own acts that are causing people to take actions that discourage implementing BEE. It is ingenious to suggest that the BEE codes of good practice now need a review, before you have even given them a chance to work.
All you have done, Mr Minister, is given those that are totally anti-BEE a rallying point. You have inadvertently hurt the cause of true empowerment.

Keith Levenstein
EconoBEE – Helping you and the Economy Grow

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