Posts Tagged Verification
Published 1st March
Response to Business Report Article ABVA has sent an immediate response to the Editor of Business Report in regards to the inaccurate article running in Business Report Monday March 1st.
To the Editor:
ABVA would like the right of reply to the article in Business Report of Monday March 1st, BEE Verification Industry in Turmoil.” The article contains many factual errors and unsubstantiated claims and has a sensationalist tone not often found in the Business Report.
While ABVA Chairperson Andile Tlhoaele was quoted in the article, many other inaccurate claims were made in the article that ABVA did not have the opportunity to respond to.
The so-called BEE verification leaders quoted seem to only include a representative from Emex who makes wildly inaccurate claims about ABVA and a BEE consultant who has opposed the accreditation process from the beginning. It is also important to note that the agency that has resigned its membership from ABVA is one that, at the time of resignation as ABVA member, was in the process of a disciplinary procedure due to complaints from other ABVA members against them, for illegally copying the content of other agencies’ certificates and then distributing it in the market as their own.
The generalizations made about the verification industry based on these two very personal views are therefore shaky at best and should not have been the basis for such an inflammatory article.
In regards to the main and inaccurate claim that ABVA is manipulating the industry or interpreting codes, ABVA has had many meetings with the dti in this regard. As stated by the Dti and agreed by ABVA, ABVA does not set policy and never has or ever intends to pronounce on policy.
ABVA however, does have a role to ensure that a consistent application of the codes is practiced in the market place. This is why draft practice notes, pertaining to the legal interpretation of the Codes and related legislation, were issued for comment to members. These draft practice notes have nothing to do with policy, but are an attempt at bringing a level of consistency to the application and legal interpretation of BEE.
Government would not put themselves at legal risk by interpreting legislation. In January 2009, Dti withdrew the “Interpretive Guide” (published in 2007). This is the same document which your article also refers to. If anything, this action on the part of the Dti at the very least supports our contention that they do not see their role as the legal interpreters of the legislation.
It is important to note that ABVA has not issued a single practice note to thus far and that the document circulated to members contained draft practice notes for their comment. The draft practice notes currently represent the compilation of external and internal legal opinion on certain key interpretational matters. Policy issues are not addressed in the document. The circulation of these draft practice notes follows a mandate given to the ABVA board from ABVA members at the last AGM of ABVA in May 2009 and is not a unilateral action by the chairperson of ABVA.
It also required no amendment to ABVA’s constitution as is alleged by EMEX. ABVA’s technical committee has received several comments (even from non-members) following the circulation of the draft practice notes. All of these comments are currently being evaluated before circulation of any final practice notes. It is important to note that EMEX did not make use of the opportunity to comment on the draft practice notes or to express their dismay with the process while they were a member. Their actions rather seem to reflect those of a disgruntled ex-member for the disciplinary procedures instituted against it.
One can question why one particular BEE Verification Agency does not wish to apply a consistent approach to the implementation of the Codes, especially when any final practice note will be the result of legal opinion and an inclusive and consultative approach with members and non-members. ABVA strongly condemns actions that enable every Verification Agency to do as they please in the market place, leading to varying interpretations that allow for the giving away of points on the scorecard and diminishing the intentions of BEE. The vast majority of members responded very positively to the circulation of the draft practice notes.
The only amendment to the constitution of ABVA occurred at the May 2009 AGM of ABVA and related to the widening of ABVA’s membership base to include the corporate sector and BEE consultants. The very purpose of this move by ABVA was to obtain a more representative input into legal / interpretational matters. This change to the constitution had nothing to do with creating policy as claimed in the article and everything with being transparent and responsible following the mandate given to us by our members to issue practice notes to ensure consistency and standardization with interpretation.
On the issue of acceptance of member’s certificates, ABVA never recommended that only its member’s certificates should be accepted in the market place, but has always referred to the legal interpretation of all the legislation which governs BEE implementation, the Codes of Good Practice, the SANAS R47 and the Verification Methodology. The legal position embodied in these documents show that only agencies that have made application to SANAS before the 1st February 2010 could be regarded as a “verification agency” for purposes of the minister’s notices issued during the course of 2009. This was ABVA’s position whether or not a particular verification agency was a member of it or not.
The article also makes mention of a complaint against ABVA to the Competition Commission yet fails to mention that this complaint was dismissed. BEE consultants such as Levenstein have been opposed to the accreditation of BEE verification agencies from the outset, however this accreditation process is the ONLY way to ensure a credible and consistent industry.
The article’s claim that the verification industry is in turmoil could not be further from the truth. Thanks to the assistance of organisations such as ABVA, there are now accredited agencies and a host of agencies who will soon be accredited that can take BEE verification to the next level.
ABVA is proud of its achievements working with government and business so as to ensure credible and consistent application of the BEE codes.
Email sent 1st March in reply.
I would sincerely suggest you check your facts BEFORE you issue them to the press.
I’m attaching(http://www.econobee.co.za/downloads/general-bee-documents/competition-commission-ruling/download.html), for the umpteenth time to ABVA, the response from the Competition Commission – which Business Report also has in its possession. The relevant exact wording is as follows:
“The Competition Commission will not refer this complaint to the Competition Tribunal”.
It goes further to give it reasons for the non-referral – please read page 2 and page 3 carefully including:
“ABVA has undertaken to raise awareness among its members regarding the concerns raised in the complaint to ensure that if the practice exists among its member it is not condoned.”
This was an undertaking that ABVA gave to the Competition commission ON CONDITION that they would not refer the matter to the Tribunal. We both know that ABVA never followed up on that undertaking, but I was satisfied with the decision taken by the Competition Commission, on the basis that they had obtained a legal undertaking from ABVA and they clearly defined what certificate is acceptable or not. (see point 1 at the bottom of page 2).
It is therefore absolutely untrue to say that the “complaint was dismissed”. It was thoroughly investigated and not referred because the Competition Commission was given an undertaking by ABVA.
ABVA has in the past recommended that certificates only be accepted if produced by a member of ABVA that has applied to SANAS for accreditation. This is patently incorrect, which is why the dti are pretty irritated with ABVA for continuing to make the rules.
At no stage have I personally attacked any person, so do take offense to your untrue assertion that “I have been opposed to the accreditation process from the outset”. I have been opposed to any person or organization choosing not to follow the B-BBEE Codes of Good Practice. I have always and continue to support the process as defined by the government, the dti, and the minister. I was the first person to inform my clients and readers of my newsletter that they would eventually have to use an accredited agency because the minister decided so.
Your untrue and potentially defamatory statement and and my response will appear in my newsletter tomorrow unless you retract them before my newsletter is published. I have more than 100 000 readers.
There are other issues with your response on which I don’t have time to comment, but I do think you will incur the further wrath of the dti by stating “that they do not see their role as the legal interpreters of the legislation.” I would actually rather not see ABVA, me, the dti and SANAS fighting each other as it does not further the good cause of transformation.
Econoserv SA cc/EconoBEE
Email received 2nd March
Hi Kevin (sic),
The condition was never communicated to ABVA.
Email sent 2nd March
Theo Lombard was the chairman of ABVA at the time. He was contacted by the Competition Commission over my comment. The board must have given that commitment. Someone at ABVA must have received the final determination from the Competition Commission. In any event ignorance of the law is no excuse, and the Competition Commission’s decisions are legally binding.
Bear in mind that:
* The decision was communicated to the PR company that ABVA hired when they issued a press article on the subject in 2007.
* It must have been available to the board when they determined that “the complaint was dismissed”. How could the board react to the ruling if they never received it?
* It has been on our website since the day we received it.
* I sent it to Wade van Rooyen recently.
* How did you personally reach that conclusion yesterday without reading the document?
* I therefore repeat – your public statement yesterday rebuking the Business Report for inaccurate reporting is in itself incorrect.
Furthermore ABVA has an obligation even today to uphold its commitment given to the Competition Commission in 2007.
Business Report has been unfairly attacked by you. They did not make factual and unsubstantiated claims as per the above. I suggest an apology to them is in order.
Econoserv SA cc/EconoBEE
We spoke recently about QSE certificates that may be invalid after 1st August because no verification agency has been given an accreditation to renders services for code 800.
This resulted in a call from Christinah Leballo from SANAS who informed us that agencies do indeed have accreditation to render code 800 verification. She explained that SANAS did not want to complicate the certificate by adding in the words “Code 800 QSE”. Personally I don’t think that three extra words on a certificate is going to ruin the aesthetics of the certificate. (Look at an example). She did however state that if we considered it confusing that certificates do not have Code 800 QSE on it, they will address it by adding those words onto the certificate. We don’t consider it confusing at all. As far as we are concerned, if an agency does not have accreditation rights to render a specific service, they are not allowed to do so. SANAS is an accredited ISO accreditation agency. Their role is to accredit organisations to do specific tasks, e.g blood transfusion services, medical laboratories, calibration laboratories. The purpose of ISO is to ensure that procedures, methodologies and standards and complied with and followed and of course to remove confusion.
She also confirmed that no agency has been given accreditation to verify on any of the gazetted sector codes. This clearly means that any entity in the tourism, construction or forestry industry will not be able to produce a valid certificate and any certificate they do produce will NOT be able to be used to earn procurement points.
There is almost no chance that the dti will be able to produce an interpretive guide and verification manual for each of the sector codes by 1st August, and SANAS will not be able to accredit any agency by then. We would be surprised to see this happen before the end of the year.
The only alternative is for the minister to issue a notice allowing all entities in those industries to use the codes of good practice, or alternately granting an extension to companies in those industries from having to produce a valid scorecard.
We wrote recently that some verification agencies have been accredited and some not yet. We wondered if this will cause a rift amongst those verification agencies who are accredited and those who are not.
Well, ABVA have issued a letter to their members confirming that they will hang their members out to dry if they do not get accredited, or at least get a pre-assessment letter by 30 June 2009.
The letter from ABVA states that the dti has reached a position which will be communicated to the marketplace shortly.
This letter has already caused a stir in the marketplace.
Our position has always been to follow the codes – to date accreditation has been encouraged, but is not mandatory. As at today the BEE codes and verification guidelines still allow for both self-rating and independent rating.
We await with interest the dti’s response and whether it will corroborate the ABVA statement.
On occasion I will receive an email from other consultancies/verification agencies or a question from my clients saying what is happening with self assessment. The last one I received said they thought that since accreditation is finalised self assessment would be phased out in time.
Importantly they are not saying it is not allowed, they are speculating that in time it will be phased out in favour of accreditation. I believe that the market will move in the other direction and see accreditation as an unnecessary issue. A business would rather choose his auditor with whom he has already built up a good relationship and has an audit standard qualification.
The DTI and businesses in general have proven time and time again that self assessment is the most effective form of producing a BEE scorecard. Unfortunately it is no surprise that verification agencies and those associated with them want to see self assessment “phased out” because it takes away from their task as consultants or reduces the need for verification. The same example stands with the charters because it will make BEE more complex which in turn will result in more business.
Finally, I am a firm believer in the free market – let businesses decide what they want. Government (The DTI) is here to facilitate the transaction but it is businesses job to implement BEE. Although BEE is a social act it is very much driven by the forces of the market, this can easily be proven by looking at the Preferential Procurement Element – you need a scorecard because you want business. Procurement is the only real form of push that businesses have to implement BEE and it works, for the same reason that self assessment is an important part of Black Economic Empowerment.
Self assessment is needed, as is a high level of credibility to ensure accuracy.
Let businesses decide how much they want to spend on verification and give them to tools to make their own decisions.