Posts Tagged codes of good practice
Every company in South Africa has procurement spend. When the codes of good practice talk of procurement they include even the milk for the staff members’ tea, the paper for printing, the office fan, to mention but a few instances. More often companies tend to ignore the smaller amounts spend from their procurement calculation. This has led to some companies claiming that they are net importers and so they will not get any points under the Preferential Procurement element of the scorecard. The fact that imports are eligible exclusions from the scorecard calculation makes it sometimes even easier to score more points. Even more pleasant for a company that imports the majority of their procurement is the fact that the small amount of local procurement is likely going to be from small suppliers. The small suppliers are likely going to be EMEs (businesses with annual turnover below R5 million) or QSEs (businesses with annual turnover between R5 million and R35 million). For procuring from these businesses an entity’s spend gets an enhancement because such procurement counts under two indicators. More still, it makes the calculation of Preferential Procurement points easier to follow and also easy to get scorecards from the fewer suppliers.
ISO (International Standards Organisation) gives this description:
“Why standards matter
Standards make an enormous and positive contribution to most aspects of our lives.
Standards ensure desirable characteristics of products and services such as quality, environmental friendliness, safety, reliability, efficiency and interchangeability – and at an economical cost.
When products and services meet our expectations, we tend to take this for granted and be unaware of the role of standards. However, when standards are absent, we soon notice. We soon care when products turn out to be of poor quality, do not fit, are incompatible with equipment that we already have, are unreliable or dangerous.
When products, systems, machinery and devices work well and safely, it is often because they meet standards. And the organization responsible for many thousands of the standards which benefit the world is ISO.
When standards are absent, we soon notice.”
The relevance? We are still seeing various SANAS (on behalf of ISO) accredited verification agencies that give vastly differing opinions on various aspects of the codes. As a result you cannot be assured that your scorecard will be consistently calculated by different agencies, or even by different analysts from the same agency.
We heard today of an agency that allows a measured entity to choose the inception date of enterprise development spend. The codes are clear, the inception date is the commencement date of statement 700, i.e. date of the publication of the codes (9th February 2007, or up to 5 years before, but definitely not after!).
It means some companies have had to spend twice as much this year to make up for last year’s shortfall, but if they had chosen this particular agency, could have saved their money. Since ED is 3% of net profit after tax, this “saving” could be millions of rands for large companies. On the other hand, any company that chose to use this agency and allow their interpretation stands the chance of their scorecard being declared invalid.
Some standard indeed! It’s about time SANAS, or ISO did something about it.
I always get amused/annoyed when I read in the media of XYZ (Pty) Ltd, a BEE company. What exactly does a “BEE company” mean?
I take it literally to mean that the company is BEE compliant, i.e. maybe it is level 4 or 3, or even 2.
Of course this is nonsense, a “BEE” company in the eyes of the media is simply one that is black owned.
There is a definition in the codes “BEE controlled company”. This is a company that has more than 50% voting rights in the hands of black people.
A “BEE owned company” on the other hand is one that has more than 50% economic interest in the hands of black people.
In the interests of accuracy I’d like to see the press refer to these companies by their true categorisations.
Reports are that the ICT charter has missed its deadline again. I continue to wonder why industries continue to have charters. So far no charter has been finalised – some are quite far down the line, but none has maded it to the final gazetting stage.
The transport charter is a huge document – they have created sub-charters for every industry within the tranport industry – even including forwarding and clearing!
All it has done is delayed the process, and given some good business to consultants and lawyers. We ourselves have been involved in the legal charter – but we told them their charter will never be gazetted if they are going to change the definitions. In the end they published it as a “social charter”, hoping to get law firms to adopt it, but realising that the codes of good practise should be used instead.
Now, 2 years later theICT charter is still not ready, and unlikely to ever be finished – sounds a bit like the IT industry – they never seem to finish any program they start! Yes, a bit harsh, since I was in the IT industry for many years before starting EconoServ in 2000.