Where is Government’s commitment to B-BBEE?

Original publish date – Mon, 03 May 2010 07:21:32 +0000, Keith

The codes ask measured entities to produce a scorecard based on the codes of good practice. The driving force behind the scorecard is to enable the measured entities’ customers to benefit from a scorecard produced by its suppliers. It is entirely voluntary to comply! No one will be breaking the law if they do not produce a scorecard.

In the case of government: Do government agencies, department, public enterprise NEED a scorecard? The law here is ambiguous. Government is definitely included in the transformation process. Section 11 of the B-BBEE act – Strategy for broad-based black economic empowerment states that the strategy must “provide for a co-ordinated and uniform approach to broad-based black economic empowerment by all organs of state, public entities, the private sector, non-government organisations….”

Procurement from government is almost entirely EXCLUDED from the procurement calculation. Most companies will not ask for a scorecard, for example from the constitutional court as any spend is excluded from their procurement calculation because the Constitutional court is on schedule 1 of the Public Finance Management Act. Spend from other government/local authorities e.g. a rates from a local council appears to be excluded because that local authority is a statutory or regulated monopoly, so the customer will not ask for a scorecard.

Code 000, paragraph 3 of the Codes of Good Practice lists the entities that are measurable under the codes:

3.1.1 all public entities listed in schedule 2 or schedule 3 (parts A and C) of the Public Finance Management Act


3.1.2 any public entity listed in schedule 3 (Parts B and D) which are trading entities which undertake any business with any organ of state, public entity or other Enterprise

Is the government enterprise therefore EXEMPT from BEE? These are the terms we often hear. No one is exempt! Some companies may be regarded as exempt micro enterprises (EME), but that does not automatically make them “exempt”. Similarly a government enterprise is never exempt other than if it is an EME, and it is only “exempt” if it produces a valid EME certificate.

Must government therefore produce a scorecard for each division, aspect of government? They will not be breaking the law if they do not supply a scorecard/certificate on demand, and this is irrelevant if procurement from that department is EXCLUDED or not.

Now we have over 12000 valid certificates from companies that CHOSE to produce a scorecard – and none would have been breaking the law if they had chosen not to. We have no certificates on file from government departments, local authorities etc. We do have certificates from SAA, TELKOM, ESKOM, SABC.

We don’t have certificates or scorecards from ACSA, the Presidency, the dti, or any dti organisations such as the Competition Commission, CIPRO, NEF. We have not seen certificates from NERSA, ACASA. The dept of Manpower whose director general, Mr Jimmy Manye, is very vocal about the slow pace of transformation has also not moved very fast in producing their own BEE certificate. The City of Johannesburg has no scorecard. The City of Cape Town, run by the official opposition has no scorecard. The SA Reserve Bank has no BEE scorecard.

The above organisations will say that they are “exempt” – which is not true. Procurement from them may be excluded. None are exempt! Like every enterprise in the country they do have the discretion of not producing a scorecard. They have used that discretion. Not much of a commitment!

Finally, we have yet to see a certificate from SANAS or The BEE Council.


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