Davies: Empowerment act must be amended

2012-10-29 09:30

Johannesburg - Amendments are needed to Broad-Based Black Economic Empowerment (BBBEE) legislation to ensure that South Africa's economy is more inclusive, Trade and Industry Minister Rob Davies said on Monday.

"We cannot run an effective economy that draws its leadership and entrepreneurial capacity only from a small minority of the population," he said in Johannesburg at a breakfast briefing hosted by the New Age newspaper.

The proposed amendments to the BBBEE Act would define the practice of fronting, including "complex fronting", and introduce a commissioner with the power to impose penalties.

Complex fronting involved companies drawing up complicated contracts which deprived black managers of the appropriate authority for their positions.

Davies said the codes by which compliance was assessed also needed to be revised to encourage symbiosis between large and small companies.

"(President Jacob Zuma) has said: 'Where are the black industrialists?' and of course we have one or two, but what we are looking at is to create many more real players in the productive economy."

The categories of the scorecard used to measure BBBEE compliance would be reduced from seven to five, under the proposed amendments.

The categories of employment equity and management control would be merged into a single category, as would preferential procurement and enterprise development.

Davies said the amendments also sought to introduce sub-minimum requirements for the priority elements of ownership, skills development and the enterprise and supply development categories,

"If you don't score sub-minimum and you are a large business, we will reduce your overall score by two places," he said.

Qualifying small enterprises would be downgraded by one place for failure to meet the 40% requirements.

"We cannot any longer regard people as significant contributors to BEE if you are not involved in the broad categories of BEE..."

The proposed bill, which was in the public consultation phase, would also do away with the necessity for small, black-owned companies to have their status verified by agencies.

At present, small companies had to pay a verification agency for a certificate as proof of their BEE rating, but Davies said this placed an "inordinate and unnecessary burden" on these enterprises.

As such, a 100% black-owned, small enterprise would automatically be regarded as level one.

"Essentially, I think the slogan might be that we want to turn BEE essentially from supporting passive shareholding to something that supports a much more active and productive empowerment of black people across the economy," Davies said.

He warned that the proposed legislative changes would not be a "magic wand", and that other initiatives were needed to support BBBEE.

Some companies held a "tick box mentality", and were more interested in being seen to be compliant than actively seeking the long term economic benefits to society presented by BBBEE, Davies said.

  • SarelJBotha - 2012-10-29 10:00

    Rob, you and your outdated commie ideas should just bugger of and let the free market system take its course. We need freedom to run our businesses successfully or fail on our own terms. You take no risk, nor does government, so why should you have any say?

  • herman.booysen2 - 2012-10-29 10:02

    Hahaha ! Ag please everyone fighting for political survival again.

  • zimzon.zimzon - 2012-10-29 10:03

    BBBEE have been extremely successfull: 20 years ago most employees were white in many instances. Today, if you walk into airports, post office, restaurants, police stations, government buildings including municipalities, shops, etc. you hardly see any white employees. 20 Years ago you did not see black employees doing these jobs; how come this guy say that broad based black economic empowerment is not working?

      stuart.lidstone.1 - 2012-10-29 10:23

      BBEEE is working in providing jobs for the "blacks", but the jobs being offered, particularly within the municipal arena are often being awarded to the person with the right connection and not ability and this is leading to us becomming a banana republic. No sane citizen would care if the position was awarded fairly but for over 20 years - as the Nats started the process with educational institutions and study placements - it has not been and we are watching nepotism, ineptitude and corruption daily!

  • luke.dekoker - 2012-10-29 10:19

    zuma said 'Where are the black industrialists?' and of course we have one or two, but what we are looking at is to create many more real players in the productive economy." One or Two, my foot, your family (100+??) and CancER crooks already have their fingers in every large company, mines, big Mac, etc. Davies, if you want an effective economy with entrepreneurial capacity leadership you must scrap the RACIST anc laws (BEE, BBBEE, AA, etc) and let the "free enterprise" system work whereby Qualified, Educated, Hardworking and Corrupt Free people are employed to render high quality service.

      ryan.a.smith.3958 - 2012-10-29 11:58

      AND they must stop handicapping the economy with their other policies and behaviours that discourage growth and investment. AND they must fix education that they are singlehandedly destroying at present. thats the minimum they should do

  • john.morreira.9 - 2012-10-29 10:19

    BBBEE;AA and the whole alphabet soup of these crazy "initiatives" cannot work,simply because experience;ability and merit are discounted by corporate entities, in order to be seen as being PC.

  • FUNKMASTERFLEX.AKA.BAIN - 2012-10-29 10:21

    ag you cant put a good person down,all competent people of all races should just do business together make sure you pay the least tax possible and forget the waste of air politicians.That is how you survive in SA and yes it might mean competent entrepreneurial people of all races only doing business with similar people, but why should we drop to the low levels of a government that just window dresses.Does not mean we wont survive but you should not feel any guilt when you see the gov policies gone wrong as it would not be your fault but solely the gov

  • trevor.bush.9655 - 2012-10-29 10:23

    I'm siting in HongKong airport and laughing my ass of at people like Davies...YOU and your cronies are the reason I work abroad, I left out of choice because I saw no future in SA with people like you and the ANC "taking the lead". You don't provide solutions, you just promote racism, economic apartheid and boost the brain drainyear in year out with all these bull policies that after 18years HAVE NOT your own admission. I have so much work I cannot keep up, they can't get enough of skilled South Africans and they don't care what the colour of your skin picture Mr Davies my left hand and think, which finger am I showing you and the ANC...LMAO...

  • richard.zanner - 2012-10-29 10:37

    Why can these people not simply go out there and create their own wealth. Surely after 20 years enough opportunities have been created for people to make something for themselves instead of all the time wanting to rather climb into ready made beds. Surely it is understood that unless this happens this economy can never grow and will eventually collapse (sorry it is already collapsing). You cannot empower one person by dis empowering another. It is short sighted, stupid and not sustainable.

  • tiresias.watiresias - 2012-10-29 10:39

    Insanity is doing the same thing over and over, and expecting different results. BEE did not solve the problem, so now they are going to try harder doing the same thing.

  • yvonne.c.martin.71 - 2012-10-29 10:45

    @Zimzon Is that why all our Government buildings are in such a poor state?

      mikel.kiparski - 2012-10-29 12:19

      paint peeling from the walls/NO MONEY 4 PAINT/only 4 wages./POTHOLES,,no money 4 tar /ONLY 4 WAGES

  • tshiamo.stevens - 2012-10-29 11:00

    You are not coddled to be a successful entreprenuer; you have to work your ass off. As a black owner of a small start up I have been running my small concern for two years - no capital, no BEE favours from an ANC uncle or relative, through sacrificing my meagre resources i have just broken even close to the end of the year! I now know the value of a rand, prudent management of resources. Ask any entreprenuer what they go through every day? Stop BEE and comprimising standards. We are the only country in the world where small tax payers sustain the majority!

  • romano.theunissen - 2012-10-29 11:28

    18 years of freedom is nothing compared to the 110 years of oppression. People always talk about "black people" getting over apartheid and getting even. There is no yard stick to measure atrocities and human rights violations. You can’t say that Bosnia was worse than Rwanda. And you will never tell a Jewish person to get over the Holocaust. 18 years in nothing. Especially when so many black people are still experiencing the hardships left by apartheid and so many white people still experiencing the advantages gained during apartheid. People often forget that throughout apartheid and before it, black people were not allowed to be employed in certain industries no matter their qualification. BEE may have many problems with implementation, but the policy at its core is correct. May it be unfair that white people today have to suffer because of it? Yes, but it is necessary in order to bring society level. Good on you Mr Davies, one step closer to a realistic and fair BEE policy.

      davemanza - 2012-10-31 06:30

      @romano.theunissen. You have it completely wrong. Firstly, the Jews HAVE gotten over the holocaust (economically if not historically). They certainly don't use it as an excuse for their lack of prosperity. That is why they rank among the most prosperous ethnics groups in the world, despite the hardships their ancestors faced. The Jews use the holocaust as an inspiration to form communities all over the world, not as an anchor that weighs them down. Secondly, you claim that whites still enjoy the advantages gained from apartheid but what you fail to realize is that by reversing those self same principles you cannot hope to achieve mirrored results for black people and the reason for that is that black people form the majority, not the minority. BEE and its vile cousins would only work for a minority and even then it has proved a failure worldwide. It's continued existence is causing economic failure in SA as it seeks to enrich individuals, not the economy as a whole. The only way for black people's standard of living to improve is on the back of TOTAL economic success, including that of Blacks, Whites, Indians, Jews etc.

  • denny.cray - 2012-10-29 11:49

    Black industrialists cannot be created by passing a law! You may as well pass a law allowing white males to grow their own wings so they can fly.

  • john.cryink - 2012-10-29 12:12

    When is davies being replaced AA BEE Equity?

  • doug.isherwood.9 - 2012-10-29 12:40

    If this country really wants to move forward then it needs to use ALL its working citizens without any form of discrimination. Until this changes this country will continue to go backwards against the rest of the world.

  • peter.jefferies.90 - 2012-10-29 13:36

    Shut up Davies, stop trying to brown nose the ANC for your own benefit!!!

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