|The Alternative to BEE is BEE|
Many people I speak to agree that transformation needs to take place in South Africa, that poverty is rife, that skills are lacking, that HIV/AIDS is a serious problem. Most of those people agree that the vast income distribution gap is cause for potential social unrest, and the asset distribution gap is a problem. In a free market economy, or any economy, some people will be wealthier than others, some will have better jobs and more assets. In South Africa this has been exacerbated by the situation that existed before 1990, and while change has taken place, it has not always moved in the desired direction and has been too slow.
Recently we spoke to a businessman who stated that while he supported transformation he was not happy with BEE as it stands. We asked him what he would suggest in place of BEE. He suggested that BEE place emphasis on charity, on skills, and on helping businesses grow. He wanted the red tape removed from his small business, to make it easier for him to “do the right thing” than forcing him to give up his family owned business. In his case he said he regarded socio economic development as a tax. On reflection he agreed that what he had just described was almost exactly BEE as it is defined, if not practiced that way.
We ask similar questions of many people and I raise this question again to all our readers. What is the alternative to BEE? A reader of the IOL website, in agreeing with calls by Moeletsi Mbeki for the abandonment of BEE made this comment: “BEE is necessary to balance job opportunities in the Economy -but should not be at the exclusion of white candidates who are qualified to do the job! A more sensible programme would be to legislate that all businesses, irrespective of size, contribute to the upliftment of the poor by “compulsory “contributions to various programmes. eg Adopt a school, pay for students education at university, or have a compulsory apprenticeship programme etc”.
The irony is the person does not realize that B-BBEE is almost exactly what he is suggesting. B-BBEE is better in that it protects small businesses, rather than demanding that all businesses irrespective of size contribute equally towards empowerment.
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Business Report has an article quoting Cyril Ramaphosa. He is complaining about lock-in clauses and the fact that the BEE codes have a “once empowered always empowered clause” that encourages businesses to offer loans to “BEE partners”, and lock them in for up to 10 years. Often the partner cannot repay the loan so the business repossesses the shares but does not lose their BEE points because of the “once empowered, always empowered” clause…
Business Report has published an article quoting Jimmy Manye, the director general of the department of labour, that government will get tough on companies that do not comply with affirmative action and B-BBEE laws.
I understand his frustration – we have the same frustration with companies that refuse to make any effort, while publicly stating that they support the initiative. Our clients lose points if their suppliers do not comply…
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02 December 2009
In this issue
- The Alternative to BEE is BEE
- Who is more Confused?
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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