State bodies are not applying BEE codes – analyst

Rival consultant says public sector is doing well
May 31, 2010

By Mzwandile Jacks

The head of a Johannesburg-based black economic empowerment (BEE) consultancy has lashed out at government departments and public enterprises, accusing them of not making an effort to comply with the broad-based BEE codes.

Keith Levenstein, the chief executive of EconoBEE, said it was not a secret that broad-based BEE had not reaped the results its developers had anticipated when they launched the BEE codes.

The BEE codes are guidelines to measure the progress of transformation. Broad-based BEE was initiated by the government in response to criticism against narrow-based BEE, which benefited few people.

“We would like to see the government and public enterprises obtaining a scorecard because it would show the government’s commitment towards its own policies,” Levenstein said.

“We would like to see them set the example by leading the way because it would help those organisations understand the issues involved in getting a scorecard,” he added.

He said a number of government bodies did not have scorecards, namely the SA National Accreditation System, the National Empowerment Fund (NEF), the BEE Advisory Council, the Independent Communications Authority of SA (Icasa), the Commission for Conciliation, Mediation and Arbitration (CCMA), the Unemployment Insurance Fund and the National Energy Regulator of SA (Nersa).

But Ajay Lalu, the managing director of Black Lite Consulting, disagreed with Levenstein.

Lalu said figures from the University of Pretoria’s research arm, Consulta, revealed that in 2008 the public sector achieved an overall score of 88.41 percent while the private sector achieved only a score of 33.93 percent.

“This clearly shows that the public sector is streets ahead of the private sector in terms of implementing broad-based BEE.

“There are other institutions like the NEF that are defined as BEE facilitators in the codes which automatically qualify as 100 percent broad-based BEE compliant,” Lalu said.

He said the codes excluded monopolistic suppliers like Nersa, Icasa and the CCMA.

However, Levenstein said: “It is true that some of… these entities are exempt in terms of their preferential procurement calculation, but that does not imply that those entities do not need a scorecard, if only to set a good example.”

He said it was “trite” to state that public enterprises could not get a scorecard because they did not have ownership.

“The specialised scorecard takes this into account and allows all enterprises without ownership to earn all the points from the remaining six elements.”

Elements of the BEE codes include management and control, employment equity, skills development, preferential procurement, enterprise development and socioeconomic development.

The chief director of BEE at the Department of Trade and Industry, Nomonde Mesatywa, could not be contacted for comment.

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