Archive for May, 2010
PRESIDENT ZUMA CONVENES THIRD MEETING OF BEE ADVISORY COUNCIL
Posted by Gavin in Uncategorized on May 23rd, 2010
This no doubt adds a bit of controversy in that one major flaw with BEE is fronting. To some extent it goes without saying the issues being described are purely based on the outdated discredited Narrow Based system because it is less likely to have a company “front” on the Broad Based BEE scorecard and almost impossible for that to occur for Ownership because the company would earn no points.
In essence we have to sort out a problem – fronting. Their solution is regulation. The regulation is based on the Broad Based BEE scorecard and the fronting occurs on the narrow based scorecard. Which means it is more difficult to create an “ethical” scorecard and quite easy to front!
The EconoBEE Solution: The Broad Based BEE scorecard is brilliant – so use it. Instead of announcing a problem like fronting change the PPPFA which is causing this problem to properly integrate the BBBEE act.
Simply in my opinion, fronting is as a consequence of outdated government policies and all effort should be placed on correcting the cause and not treating the symptom.
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MEDIA RELEASE
PRESIDENT ZUMA CONVENES THIRD MEETING OF BEE ADVISORY COUNCIL
The Black Economic Empowerment Advisory Council held its third meeting at the Union Buildings in Pretoria today (20 May 2010).
The Council, which was established in December 2009 in terms of the Broad-Based Black Economic Empowerment Act, is chaired by President Jacob Zuma. It held its inaugural meeting on 4 February 2010.
In his opening remarks, President Zuma said much progress had been made in advancing black economic empowerment, but not enough. He said the Council would need to advise government on how to ensure it happens faster and benefits broader society.
President Zuma said the Council would need to answer the question: “In the South African context, where many people were excluded for centuries, how do we level the playing field?”
“This Council needs to look at what needs to happen in the economy,” he said.
Minister of Trade and Industry Rob Davies said that many elements of the BBBEE Framework had been put in place, including sector charters, codes of good practice, and verification processes: “We find ourselves at a moment when we need to assess the impact of that work.”
“There is a great deal of work that needs to be done to make empowerment a contributor to development and economic growth,” he said.
One of the challenges that the Council would need to advise on was the abuse of the empowerment process through practices like fronting. It would also need to look at the alignment of government’s preferential procurement policy with black economic empowerment. The Council also identified weaknesses in verification and accreditation procedures.
Members of the Council emphasised the need to ensure that economic empowerment was indeed broad-based, and said that this consideration should be at the centre of the interventions that the Council would propose to government.
The meeting adopted the Council’s Constitution which outlines, among other things, the powers, functions and administration of the Council.
The meeting established four sub-committees to address a number of key issues that are central to the work of the Council. These are:
1. Ownership and structuring of BBBEE deals
2. Enterprise Development, Access to Finance and Procurement
3. Human Resource Development
4. Legislation, Charters, Compliance and Enforcement
In the course of developing recommendations to the council, the sub-committees may co-opt experts and commission research as required.
The sub-committees will report to the next meeting of the Council, which is due to be held in September 2010.
Issued by:
The Presidency
Union Buildings
Pretoria
20 May 2010
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Update – SANAS B-BBEE Scorecard
Posted by Keith in Accreditation, General on May 4th, 2010
Christinah of SANAS called me to discuss my request for their scorecard. She said they used to have a scorecard, self assessed, but when the minister issued his notice that self assessment would not be valid after August 2009, they discontinued self assessment as they were not sure how to proceed. The feel they are in a difficult position because of a conflict of interest with the verification agencies and would not want to favour one agency over another. She promised to raise the issue again with her CEO, and see how they can find a way to produce a BEE scorecard.
NONSENSE:
SANAS are the organisation responsible for accrediting agencies. If they don’t know how to get their own scorecard, they don’t deserve to be the accreditation system for BEE. Christinah kept referring to the BEE unit (presumably of the dti) who they look for to guidance. Strange, when we talk to the BEE unit, they refer us to SANAS.
In any event, there can be no conflict of interest with SANAS choosing an accredited agency: They will have to put out a tender looking for an agency. They will indicate in the tender the exact requirements and the method of rating and then choosing an agency. e.g. lowest price, BEE credentials, proximity to their offices. The tenders will be opened in a transparent manner, and the tender awarded fairly. If they have a complaint or appeal against the agency doing the work, they can do this without involving the personnel of the BEE accreditation division at SANAS. The R-47 document clearly explains to verification agencies how to avoid conflicts of interest. Since SANAS use the R-47 they surely know how to avoid conflicts of interest.
More relevant is the BEE division is a very small part of SANAS. SANAS also does work with Calibration Laboratories, Legal Metrology, Certification Bodies, Medical Laboratories,Inspection Bodies, Blood Transfusion Services, Proficiency Testing, Pharmaceutical, Testing Laboratories, Veterinary. Verification agencies have managed to appoint their competitors to do their verification for them, so there is no excuse for SANAS not to produce its own scorecard.
Where is Government’s commitment to B-BBEE?
Posted by Keith in BBBEE Knowledge, General on May 3rd, 2010
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
and
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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