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.

What is wrong with asking your fellow citizen to care about the poverty stricken, ill and infirm? Is there anything wrong in rewarding businesses (in the form of points) for spending some of their profits on education, health and similar community activities, especially for the poorest people? Is it wrong to ask businesses to provide extra support to small emerging businesses to try to help create employment for those who need it more than most?

Is it wrong to state that skills is lacking in this country? To succeed globally we need to be better than the opposition – other countries that compete with us. Who can dispute that better skills, of the right type will make us more competitive and grow our economy? Is it wrong to reward companies that make this extra effort over others that do not?

Even at a personal level which company would you like to support? The one that uses child labour, and has total disregard for the environment, or one that cares for its community, its customers, its staff?

What therefore is wrong with broad-based black economic empowerment if it encourages businesses to support the poorest of the poor, or encourages the establishment of many new small and micro businesses, or one that trains its staff, and concentrates on the least skilled?

This is the essence of B-BBEE anyway! B-BBEE does exactly that. Companies are rewarded with points by contributing to socio economic development, enterprise development, procurement and skills development. Of course employment equity and equity ownership does come into it as well. Some companies find it makes economic and business sense to involve black ownership and management.

If not B-BBEE as described above, what is the alternative?

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