Posts Tagged Ownership
The Department of Trade and Industry has for the very first time defended its policies on B-BBEE by lashing out at Solidarity. This is of course very good news from an empowerment perspective because the DTI has now shown clear support for this policy and an intention to implement it correctly. A lot of credit can be given to the DTI for taking this very important step.
The Department of Trade and Industry (the dti), has noted media reports
regarding the findings of trade union Solidarity research that Black
Economic Empowerment (BEE) has led to a remarkable increase in black
ownership on the Johannesburg Stock Exchange (JSE), as well as ownership
of insurance policies.
the dti is particularly concerned about these reports, as they do not
address the issue of direct ownership which is critical when measuring,
the level of transformation.
Department’s BEE Chief Director Ms Nomonde Mesatywa, says it appears
that the survey focuses on measuring indirect ownership through pension
funds, medical schemes and insurance polices, etc.
According to her, unlike the finding of Solidarity, government has
conceded a maximum of 40% in terms of measuring indirect ownership.
“In relation to the Solidarity findings of 23.8% it is still far
below the 40% mark in terms of the Mandated Investments Exclusion
Principle, where 15% of direct ownership (unencumbered) is still
required. The actual direct ownership in the JSE listed companies is
still encumbered; therefore it is premature to suggest that the
implementation of BEE has contributed more to the development and
promotion of a black middleclass than is recognized” she said.
Mesatywa added that BBBEE is about more than just ownership of the JSE
and that other elements need to be considered.
“We need to consider the other elements like employment equity,
skills development, Enterprise Development, Procurement etc as well. The
effective implementation of B-BBEE must be measured holistically by
utilizing the Balance Scorecard of Codes of Good Practice, thus a
research on one element can not presuppose that there has been
sufficient empowered and that the lives of black people across the
spectrum has significantly improved”
Last month at the inauguration of BBBEE Advisory, Deputy President
Kgalema Motlanthe, said that the pace of transformation has been
painfully slow. This statement has been amplified by the recent study
commissioned by Business Unity SA which revealed equality in the upper
echelons of corporate SA has not yet been achieved, as Blacks and women
continue to be under-represented in all directorships and top executive
leadership positions of the JSE-listed companies.
The department is in a process of doing a follow-up on the BBBEE
baseline study that was done for 2007/8 in measure the impact of BBBEE
three years post the gazetting of the Codes of Good Practice.
It makes no sense from the way it sounds but it does exist, there are blacks that are literally regarded as non-blacks in Broad-Based Black Economic Empowerment. A black person as defined in the Codes of Good Practice includes Africans, Coloureds, Indians and Chinese. Such a person should be a South African citizen by birth or descent, by naturalization before the 27th April 1994 or if the person became a citizen after 27th April 1994, but who because of the Apartheid Policy in place at the time, would have been entitled to acquire citizenship by naturalization prior to that date.
This is particularly important to note when calculating points for Ownership, Management Control, Employment Equity, Skills Development, Enterprise Development and Socio-Economic Development. Therefore in calculating BEE points, a measured entity may not claim points for a black person who does not qualify under the definition given in the first paragraph.
To put this in perspective, a measured entity that donates food, blankets or provides health care support in some way to black people who are foreigners in a refugee camp can not claim such an initiative to score Socio-Economic Development points. It also goes to an enterprise that is 100% black foreign owned, it couldn’t be used as an Enterprise Development beneficiary from a BEE viewpoint and it applies to Employment Equity as well as Skills Development.
This is an important aspect of BEE to take note of. Not all black people are black.