BEE - a needed industry voice

 

An article by Brigitte Brun in Manufacturing hub.co.za http://www.manufacturinghub.co.za/business-industrial-relations/bee-verification-industry-regulation/

caught my attention. Anyone who is in anyway involved with the BEE verification industry would have to agree with Brigitte that consistency in legislation interpretation and audit practice is the biggest need amongst the accredited BEE Verification Agencies.  The need is becoming more pronounced with every Industry Charter that is Gazetted (The Transportation Sub charters alone add 21 new BEE scorecards!)  

The issue is one of money!  ABVA just doesn’t have the resources to undertake the role adequately. I suggest that all members agree to add a R30 – R50 ABVA charge to each audit fee. This money would fund a secretariat to research issues, communicate widely across the industry and to take up contentious subjects with the DTi and other bodies on behalf of its members. I believe that if ABVA had a couple of full time experienced individuals acting in the interests of the BEE industry body, it would able take the lead so badly needed, would be welcomed by the DTi and would provide a powerful voice for the industry. Under these circumstances, leaving ABVA would be a far more serious matter than it is presently.  Alasdair Yuill

 

 

 

                                      

BEE impact KZN

A recent survey by Grant Thornton quoted in Business Report http://www.busrep.co.za/index.php?from=rss_&fArticleId=5454189  stated that South African Privately Held Business (PHB) owners believe black economic empowerment (BEE) to be an important factor in winning new business. Interestingly from a regional point of view, the survey found that BEE is far less of an issue in KwaZulu Natal (53%) in terms of winning business, while the Eastern Cape (66%), Gauteng (65%) and Western Cape (61%) rank BEE as an imperative. I have found that the awareness of BEE in KZN is not as great as it is in Gauteng, but I am certain that the recently Gazetted Industry Charters – Maritime, Construction, Tourism & Forestry – each especially relevant to KZN, will rapidly change this situation. Another factor at work in KZN is that companies here are more integrated than their counterparts in Gauteng; the large Indian population being the obvious reason. KZN accounts for 16% of the country’s GDP and the rapid growth of the North Coast may well increase this percentage.   I am confidently predicting that the 53% number for KZN will increase in the months ahead. Alasdair Yuill

 

BEE Scorecards

I would like to start a debate amongst those who really understand the day to day dynamics of the Bee Scorecard. If we had one insane moment of power, how would we change the 7 Generic Element scores to really help the 25% unemployed?    

Here’s my 1^st shot; Ownership  5, Management control 10,  Employment equity 15, Skills development 25 (with sub minimums) , Preferential procurement 20, Enterprise development  20, Socio economic development  5.  I would introduce a stronger recognition of the employment and training of the previously unemployed and would introduce a way of measuring and rewarding mentoring programmes.  I would eliminate early payment of ED beneficiaries as it is a cop out!  

Alasdair

 

2012

If I had to ask someone what the significance of 2012 is I would probably get something back about the Mayan Calendar and the end of the world...

However if the same question was put to a BEE specialist they would add that it is the year from which the 2nd set of DTi BEE targets apply in respect of Employment Equity and Preferential Procurement.

The effect for preferential procurement may not be too great as every year the number of suppliers being able to provide BEE Certificates is increasing. However for employment equity the effect will be magnified as the sub-minimum targets are increased accordingly, having the possibility of eliminating the score entirely for any of the four measured categories where the score slips beneath the increased sub minimum requirement. This might not seem too important in the bigger scheme of things but for many companies it may well mean a drop back in their BEE Level if they have not been carefully managing their transformation plans and activities. By the way, the increased 2012 targets apply to QSEs as well!

For some companies in sectors where an Industry Charter applies, it may be another solid reason to evaluate the use of the Charter scorecard that will have a 5 year horizon commencing from the date the Charter was gazetted and probably more favorable targets anyway. But is this an option? There is a current discussion within the BEE industry regarding the right to choose to use an Industry Charter with many insisting that sector participants have no choice but to measure against their industry charter scorecard if more than 50% of revenue is derived from that industry sector.

Recently I was asked to re audit a company because their customer – a Government Dept – refused to accept their new DTi QSE scorecard, insisting that they send them a Construction Industry Certificate instead. This caused them to be rated as a Generic Entity under the Construction Charter rather than as a QSE under the DTi Codes. Needless to say, the affect on their BEE level was dire!

Mantis Networks has now amended its software to show current and 2012 scores to aid companies plan for this transition period and is developing its Charter equivalents at an increasing rate.