Jacob Zuma – what now for BEE? – EconoBEE Newsletter 29 April 2009
President Elect Zuma – Past BEE Quotes
“When we talk about a review of BBBEE, such a review should concern itself about how effective we are in applying this policy, how we can strengthen it so that it can better deliver for our the majority and thus become broad-based.”
“We wish to emphasise that the ANC is committed to ensuring the continued implementation of our affirmative action as well as the BBBEE programmes,”
Jacob Zuma - what now for BEE?
B-BBEE is going to continue as usual. Jacob Zuma has made various comments about BEE - mainly about its implementation.
We expect a new minister in the Department of Trade and Industry. There will be no substantial changes to the B-BBEE act until the new minister settles in and even then we are likely to see more emphasis on implementation than on changes to the act. Implementation implies that government will concentrate on broad-based BEE and use the scorecard more effectively. It is likely that your BEE score will become far more important than it has been previously. One of the biggest complaints raised abut BEE during the elections was that it does not benefit the people whom it was originally intended to reach. There is nothing wrong with the act, or the scorecard - just that the BEE act nor the scorecard was implemented fully.
Based on Mr Zuma's comments we will continue to see emphasis on the scorecard - businesses with high scorecards will start getting more business and recognition than previously.
The DA spokesman on finance Mr Kobus Marais recently emphasized that BEE needs to be more broad-based (www.da.org.za). His comments almost exactly mirror the codes as they stand. The codes give few points to big ownership deals - they emphasise procurement, employment equity, skills development and socio-economic development. The DA's complaints about BEE could just as well have been directed at corporate SA. Many businesses still take the "easy-way-out" i.e. sell a small share of their business to black participants and state that they are now BEE compliant. Many large companies have taken this approach, and many of their deals are now under water anyway due to the drop in prices on the JSE. It would appear that both Jacob Zuma and the DA (and ourselves) see eye to eye on this issue. Unfortunately corporate South Africa thinks that it receives more credit for doing a BEE deal worth say 12 points than other activities worth say 25 points. To some extent this is true, and therefore bad practice. Many companies, government agencies, local authorities still not following the BEE codes as laid out and perceive a 10% ownership deal earning about 7 points as being worth more than reaching all employment equity and skills development targets worth 33 points. (No one should say there is anything wrong with the B-BBEE targets or value of points - what is wrong is the fact that those points - the scorecard - is not given its due recognition).
True BEE is not only about deals, but how are we going to put South Africa back to work - via skills development and enterprise development. Better implementation of BEE will ensure this happens.
Mr Zuma, how can we ensure "better implementation"? We want to see the scorecard as the measure of a business's compliance. A level 2 is better than a level 3! We want to see businesses making every effort to increase their B-BBEE score, and to encourage their suppliers to increase their score.
We want to see government rewarding companies with high BEE scores.
We want to see all government departments following a consistent approach to empowerment.
We need to see a change to certain government acts - like the mining act that uses a confusing sounding section of the act called the mining charter changed to follow the B-BBEE scorecard, and not only those mining houses with 25.1% black ownership. We want the promised changes to the PPPFA speeded up so they follow a consistent approach - the B-BBEE scorecard.
We want to see corporate South Africa following the B-BBEE codes to reward higher scores, and making it easier for smaller companies to comply. For example one of the key areas of B-BBEE is helping small businesses grow, yet many corporates refuse to follow the codes by disallowing small companies from producing their own scorecard. What does corporate SA, government and the official opposition want? To implement BEE properly so everyone benefits or to put so much red tape onto small businesses that they cannot survive? Do they want "verification agencies" to thrive by insisting that every one of the estimated 400 000 businesses in South Africa above R5 million annual turnover gets a verified rating, or to encourage via education those small businesses to start their empowerment process in a way that works for everyone?
Some banks break the law by refusing to implement the B-BBEE codes, preferring to follow the financial services sector code, which has not been finalized. Both TELKOM and ESKOM demand a BEE certificate from its suppliers but have still to produce their own.
Many local authorities still refuse to follow the codes in their procurement decisions. One can hope/expect the DA to also implement the B-BBEE scorecard once the new premier and cabinet has been sworn in, in the Western Cape.
Please Mr Zuma, get your new cabinet to follow and implement B-BBEE as it was originally planned way back in 2003. Don't change the laws, just get the job done.
We have had such a great response to our recent seminars/workshops and conferences that we have decided to host a number of events including a new very exciting conference entitled - BEE Verification Conference - Prepare for a BEE Verification.
BEE Verification is becoming more critical to BEE Compliance yet companies are still battling. We are hosting a very special conference aimed at companies who need a verification, need a BEE Scorecard and a verification or have just been through a verification and want to start preparing early.
Diarise 9th July in Johannesburg, 16th July in Cape Town and 23rd July in Durban, now. Bookings are open and if you reserve and pay for your booking early you will get a copy of EconoBEE V3 at no extra cost.
In addition to our new and very exciting BEE Verification Conference we have other courses available:
More details are available on www.econobee.co.za or contact us on 011 483 1190 to make your booking.
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.
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