CRITICS of broad-based black economic empowerment (BBBEE) must be wringing their hands in frustration as the Organisation for Economic Co-operation and Development (OECD) boosts the latest version of the BBBEE codes. In its 2015 survey on SA, the OECD says the codes could reduce poverty and inequality.
It asserts that small and medium enterprises (SMEs) will enhance inclusive growth as they are more likely to employ young people, youths and unskilled workers than larger firms. It then points out, and this is the rub, the emphasis on supplier development contributes to the absorption of these SMEs into supply and production value chains, thus making them sustainable. So much for the doomsayers who say BEE adds to the regulatory environment and drives foreign investors away.
The reality is that countries have policies that develop and integrate local businesses into major value chains. In some countries, multi-national companies are not allowed to trade without local partners.
The government is to haul more than 1000 companies to the Labour Court for failing to transform and meet employment-equity targets.
The Department of Labour Court issued the threat after receiving the Commission for Employment Equity's latest report into transformation in the workplace.
The "alarmed" acting chairman of the commission, Tabea Magodielo, said it found that white people continued to dominate top management structures, particularly in the economic hub of Gauteng. Nationally, 70% of all top managers are white.
Even more alarming to the commission was the continued recruitment of white men in numbers that outstrip the recruitment of any other race group - at about 40% of the total, compared with African men at just 14.7%.
The commission has now called for tougher action, including the docking of annual turnover, depending on a company's size. Businesses fear the possible arrest of directors as part of the Department of Labour's drive to punish insufficient transformation. Labour Department spokesman Sithembele Tshwete said it was not in a position to name the companies at this stage, but he confirmed that some were listed on the Johannesburg Stock Exchange.
Western Cape premier and former Democratic Alliance (DA) leader, Helen Zille says that government wants to turn “empowerment” into legalised corruption under new Draft Preferential Procurement Regulations.
The premier launched a weekly newsletter called Inside Government earlier in July and has published a new blog slating the proposed legislation, which she says will collapse the economy:
One of the challenges of daily life in government is the weekly avalanche of documents that must be read, analysed and commented on. Among them are draft Policy papers, Bills, Regulations, “Instructions” and other documents from national government. Each must be dissected and “deconstructed” to ensure we understand its relevance and comment within the prescribed deadline – which is sometimes very short.
Johannesburg - The Association of B-BBEE Professionals and the National Association of BEE Consultants (NABC) are merging to form a single professional body for the broad-based black economic empowerment (B-BBEE) industry.
The new entity will retain the Association of B-BBEE Professionals (ABP) name, as it is in line with the new BEE Act and general enough to cover the whole industry, which includes verification agencies, consultants and practitioners.
At the same time, the new ABP announced it had signed a memorandum of understanding with the South African Institute of Professional Accountants (SAIPA).
The launch of a professional body for the B-BBEE industry should be seen in the context of the drive by the Department of Trade and Industry (DTI) to harmonise accreditation and verification practices in line with the amended B-BBEE Codes of Good Practice and the amended Broad-Based Black Economic Empowerment Act, which came into effect in October 2014, the bodies say in a statement. The DTI has recognised the ABP as the professional body representing and governing all members of the B-BBEE industry.
Johannesburg - Lebogang Seale interviewed some of Zevoli Industrial Supplies’ employees, who painted a disturbing picture of unscrupulous practices by a company they say misrepresented its employees by registering them as its directors to increase its broad-based black economic empowerment rating.
"How best to kill the goose that lays the golden egg and then burn it.”
This is how Lazarus Swarts described his plight after he was allegedly fronted by Danie Scholtz to win lucrative contracts.
“My house and car are at risk of being repossessed. I am struggling to pay for my children’s school fees and provide for their needs.
"Yet I have a share certificate with this company I helped get so many contracts,” Swarts said."
He joined Zevoli Industrial Supplies in 2007 and quickly worked his way up until he became a supervisor. The following year, he was appointed as a director with a 10 percent stake in the company.
“He (Scholtz) said I would be the director in charge of marketing.
“He promised to pay some of my dividends after three years, and the rest thereafter.
“I got nothing,” Swarts claimed.
IBM South Africa and the Department of Trade and Industry have launched the first phase of one of South Africa's largest equity equivalent investment programmes (EEIP), the R700-million IBM South Africa Broad-Based Black Economic Empowerment Equity Equivalent Investment Programme.
Minister of Trade and Industry Rob Davies signed off on the programme on 26 January, for a period of 10 years. It will build a research hub in South Africa, as well as foster enterprise and deep skills development.
At the time, IBM said it planned to inject millions of rands into skills development and education in the fields of science and technology, establish a research hub in Johannesburg and ensure healthy enterprise development.
There’s an advert on television that vividly demonstrates the haughtiness of corporate South Africa. The advert vaunts the richest square mile in Africa, Sandton. It boasts about the development of Sandton City and its surroundings and the years of investment it took to see this realisation.
This square mile in Africa houses prominent institutions that were implicated in the currency-rigging scandal, major multinational corporations that are milking the economy, not just in South Africa but on the continent, as well as the most influential members of society.
Sandton is also home to an institution facilitating billions in the global flow of capital, the JSE Securities Exchange.
Johannesburg(miningweekly.com) – The Foreign Corrupt Practices Act (FCPA) Unit of the US Securities Exchange Commission (SEC) will not recommend to the SEC that enforcement action be taken against dual-listed Gold Fields in relation to a 2010 black economic-empowerment (BEE) transaction associated with the granting of a mining licence for its South Deep operation.
Gold Fields reported on Monday that it had been informed of this decision by the FCPA Unit, following the conclusion of its investigation. The JSE- and NYSE-listed miner had confirmed in September 2013 that the SEC was investigating the BEE transaction. This had followed news reports alleging that the company had bribed an African National Congress (ANC) official to get a licence for South Deep.
Transnet Acting CEO Siyabonga Gama tells Tim Modise that Black Economic Empowerment is an imperative for the growth and future of South Africa’s economy. He says the R30 billion loan from China is going to be used to build locomotives that will generate 55 000 new jobs. He says Transnet paid “school fees’ of more than R 6 bn when building the Oil Pipeline to Gauteng. – Tim Modise.
You signed a deal with the Chinese Bank recently for R30bn and it is said to be one of the biggest amounts ever to be raised by a State Owned Enterprise, in South Africa. How did you pull that one off?
We began with a MOU with the China Development Bank, where in fact they agreed that over time they would extend credit facilities amounting to US$5bn. The set billion is actually half of what we could potentially borrow from the China Development Bank, so we have taken US$2.5bn, which is equal to R30bn. The draw down itself, we’ve only really taken $1.5bn, which is R18bn, which is what we need at the moment.
This is really part of the support from the China Development Bank, for us to build the Chinese OEM Locomotives that will be built in Pretoria and Durban.
Mining magnate Patrice Motsepe says that black economic empowerment in South Africa is still important as it will help to spread the country's wealth about.
Motsepe was speaking at the World Economic Forum Africa conference in Cape Town on Thursday. He told delegates that South Africa needed regulatory certainly when it came to the new broad-based black economic empowerment laws."At the heart of BEE was the need to get blacks to be stakeholders in economy," he said in a Fin24 report. "Broad based BEE is important because we have to bring in new people so you don’t have the same faces."
Johannesburg - The amended B-BBEE Codes of Good Practice will become effective on May 1 2015 and introduce the concept of empowering suppliers.
Companies, therefore, need to get to grips with this concept as well as the technicalities involved to properly prepare for the assessment of a business’ empowering supplier status.
“A major concern in the verification industry is that companies do not know the importance of acquiring this status or the vital significance of it,” cautioned Jenni Lawrence, managing director: verification services at Grant Thornton Johannesburg.
There is a critical difference between the "value-adding supplier" concept and the "empowering supplier" requirement, which now replaces it in the amended codes.
South Africa’s proposed new Black Empowerment codes (BBBEE) have become very personal for EconoBEE’s founder Keith Levenstein as his own company faces the dilemma confronting 83% of Qualifying Enterprises (turnover R10m to R50m): Sell/give control of your company to Black Owners or get downgraded to a level 8 (bottom of the pile) rating. In this interview he admits to not knowing what to do. Nor do his clients. Whatever transpires, these proposals make the ANC Government’s intention very clear. It is throwing legislative might behind forcing racial transformation of South African business ownership. A very blunt tool that is sure to have unintended consequences the bureaucrats have not even thought about.
Johannesburg - The signing of the memorandum of understanding (MoU) between the Department of Trade and Industry (dti) and South African Airways (SAA) on Monday is a “bold and decisive move", according to Xolani Qubeka, secretary general of the Black Business Council.
The MoU, which was signed by Deputy Minister of Trade and Industry Mzwandile Masina and SAA chairperson Dudu Myeni, concerns procurement opportunities to be made available for black industrialists at SAA.