Letter to Editor – BBBEE Comments

Dear Sir,

Thank you for publishing two articles (www.busrep.co.za/index.php?fSectionId=553&fArticleId=4494895 and www.busrep.co.za/index.php?fSectionId=553&fArticleId=4494947) relating to BEE on the same day (8 July 2008). Your guest columnist Polo Radebe, erstwhile chief director of BEE at the dti concludes her article with the accurate point that “We have already started seeing pockets of disenchantment among many South Africans who have not reaped any rewards from the strong economic performance of the past five years”.

Your correspondent on the same day A Friedman makes the inaccurate observation that small business cannot afford BEE. The truth is that the BEE codes of good practice so ably produced by people like Ms Radebe allow very small businesses – those with a turnover of less than R5million – to be considered at least a level 4 BEE contributor and exempt from all other requirements of BEE. Enterprises with a turnover of between R5 million and R35 million have a considerably more lenient scorecard. The design of this scorecard encourages businesses to reach high levels of compliancy with little effort or cost. A Friedman, maybe unwittingly, identifies the exact reason why BEE is failing. He mentions that jewellers cannot obtain licenses unless they implement BEE. The jewellery council, as with many government created enterprises and departments choose NOT to follow BEE. They deny a license, not because the jeweller is non-compliant, but because they have created their own requirements, which are contrary to section 10 of the BEE act. Government itself chooses not to implement BEE in its own dealings with its own citizens. How can government, or even Ms Radebe expect BEE to work when companies are denied the right to implement BEE? I could give hundreds of examples of where this is occurring – from ICASA, NERSA, National Credit Regulator, banks, government tenders that ignore BEE principles in its evaluation and even large companies themselves that choose to interpret the codes as they deem fit.

In A Friedman’s case there may be no cost in becoming BEE compliant, but this would not help him at all because the jewellery council rejects BEE. This is not only unconstitutional, but causes confusion and severe unhappiness resulting in small enterprises eventually choosing not to follow BEE.

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