Government Fails BEE – EconoBEE Newsletter – 26 May 2010

EconoBEE – Newsletter May 2010

EconoBEE - BEE Points = Business

The time has come for every one to implement B-BBEE properly – True Empowerment and true to the codes. It all starts with you… producing a B-BBEE Scorecard.

Government Fails BEE

It is no secret that B-BBEE has not reaped the results that its developers had anticipated upon the legislative inception of the B-BBEE Codes. According to Keith Levenstein, CEO of EconoBEE, Government’s failure to even make an effort to comply with the B-BBEE codes is a major contributor to this sad state of affairs. EconoBEE has recently undertaken a short desktop survey by asking various stakeholders and public entities for their own BEE scorecards, and the results are simply deplorable.

Many of BEE’s top role players are non-compliant and do not have a scorecard to speak of. SANAS, the accreditation body of verification agencies, refers to a self-rating conducted internally in 2008. The Department of Labour and its associated entities, including the UIF, Compensation Commissioner and CCMA, have no scorecard. The National Empowerment Fund, the dti company that assists with financing of BEE ownership deals, as well as Cipro, Proudly SA, and the BEE Council, responsible for advising the President on BEE issues, have all failed to even attempt a scorecard.

When EconoBEE approached Thabo Masombuka, Head of the Secretariat for the BEE Council and a Director at the BEE unit at dti, he stated; “… the Council is… an advisory institution set up to advise government on the progress and matters related to B-BBEE and therefore does not have ownership, management and does not engage in any other activity that is measurable in terms of all other elements of the BEE scorecard. To expect the Council to have a B-BBEE scorecard clearly flies in the face of logic.”

Keith Levenstein states that whilst it is true that some of a company’s spend with these entities are exempt in terms of their preferential procurement calculation, this does not imply that these entities do not need a scorecard, in the very least, to set a good example: “What is most disconcerting is that most seem to be completely unaware that a B-BBEE scorecard would be good for them, and in terms of the Codes, they do need one. One of the missions of the BEE Council is to monitor BEE compliance of government and enterprises. They have no interest in producing their own scorecard.”

Levenstein continued his argument to say; “It is trite to state that these public enterprises cannot get a scorecard because they do not have ownership – the specialized scorecard takes this into account and allows all enterprises without ownership to earn all the points from the remaining six elements.”

The survey revealed that some public enterprises do have scorecards: Eskom has a level 2, whilst the energy regulatory body, NERSA does not and continues to use ownership and HDI status as its sole criterion for tender processes. SABC has earned a level 4, but again the communications regulatory authority ICASA has not undertaken the scorecard calculation process.  Telkom is level 4 and SAA is a weak level 8, but has at least gone through the effort to calculate their score.

Says Levenstein; “We would like to see government and public enterprises obtain a scorecard, because it would show government’s commitment towards its own policies. It would help those organizations understand the issues involved in getting a scorecard, designing a strategy to build up the scorecard and then the administrative work in getting that scorecard verified. In particular, it would be nice for SANAS to make an effort and understand the frustration some of their requirements are causing. Ultimately, we’d like to see them set an example by leading the way.”

Whilst EconoBEE and other advocates of BEE promote the use of the B-BBEE scorecard to stimulate business and the economy as a whole; the government believes that “getting a BEE scorecard flies in the face of logic.” This is a blatant indication of government’s failure to support and sustain progress of B-BBEE.

On Monday, 24th May the NEF organised a conference on their 2020 vision for B-BBEE. The tone of the delegates present was that government should stop using the “carrot approach”, and apply the “stick”. The dti minister Rob Davies stated that government will look at a new strategy for B-BBEE. We can only hope that he wields the stick on govenment, rather than criticise private enterprise alone.

Become BEE Compliant – 10 Easy Steps more info…

How to Prepare for and Optimise your BEE Verification

BEE Verification requires a substantial amount of preparation work. This includes preparing your own BEE scorecard, collecting proof of every aspect on the BEE scorecard, communicating with the verification agency and finally receiving that certificate.

However time and thought needs to be given to this process because on paper it is easy, in practice it is a nightmare if done incorrectly.

EconoBEE is hosting the 2nd annual Prepare for and Optimise your BEE Verification conference this July. Book early and take advantage of the early bird special which offers R5 000 in complementary empowerment tools.

While there is demand for a BBBEE Scorecard someone will be taking advantage, shouldn’t that someone be you…

Not sure how to get a BEE Scorecard, click here to see a demonstration of how best to produce your own BEE scorecard.

Is BEE procurement a pain? Sort it out quick and easy – click here.

EconoBEE Newsletter
26 May 2010

In this issue

  • Government Fails BEE
  • Prepare for and Optimise your BEE Verification

In other news

About EconoBEE

EconoBEE is a BEE consultancy that 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.

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Gavin and the EconoBEE Team

Executive summary of B-BBEE

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