Revised BEE codes raise eyebrows

2012-10-03 07:58

Johannesburg - Revised black economic empowerment codes could prejudice some companies, corporate law firm Webber Wentzel said on Tuesday.

The revised broad-based black economic empowerment codes "contain a controversial amendment which could result in a reduction (in) companies' empowerment ratings," the firm said in a statement.

Webber Wentzel partner Safiyya Patel said the most sweeping amendment was the introduction of sub-minimum targets for "priority elements".

The draft codes were released on Tuesday.

Trade and Industry Minister Rob Davies said at the launch that the revised codes were introduced to "plug the gaps" in the Broad-Based Black Economic Empowerment Act and related legislation.

This included revising the codes' scorecard to include five elements instead of seven.

Some of the elements, such as ownership, enterprise and supplier development and skills development, were now classified as "priority elements".

These were elements which companies had to meet to satisfy black economic empowerment (BEE) criteria.

"If the amendments are processed in their current form, companies will be required to achieve a minimum compliance of 40% of the targets for the priority elements," said Patel.

"If they do not achieve the minimum compliance for any of the priority elements, their overall contributor status will be reduced by two levels if they are large entities or by one level if they are qualifying small enterprises."

This would have an adverse impact on companies, particularly large companies, that had overlooked black shareholding to focus on other elements of BEE, she said.

"For example, a large company that may have seven percent black ownership, but is a level three contributor, will be automatically reduced to a level five contributor because it does not meet the 10% minimum black ownership target," Patel said.

The public had 60 days to submit comments on the codes before they were finalised.

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  • christelle.s.badenhorst - 2012-10-03 08:09

    It is only really published now for the 60 day comments period, that's why it's called "draft". Not as referred that public HAD 60 days... they now only HAVE 60 days.

      mfrater - 2012-10-03 08:54

      SA going to the dogs, eventually the gov will force companies to be 100% black or bust. They have had 20 years of trying this method and CLEARLY it does not work! The very small pocket of blacks are getting richer at the expense of those white people who had the entrepreneurial skills to create the business! All the while the average black out their still starves. Do away with this ridiculous and racist law and rather focus your attention on EDUCATION! All jobs should be open and equal to ALL civilians of SA, if you qualify based on education and skill you should not be given any prejudice based on the colour of your skin! Enough is enough! Down with the racist ANC, down!

      joe.blogs.98837399 - 2012-10-03 08:57

      MWF. That is easy. Become a Plaintiff in our Class Action.

      mfrater - 2012-10-03 08:58

      SA is the only country in the world where EE/AA policies are in place for the 'majority' as a pose to the 'minority'! It is absolutely ridiculous and completely counter to any logical system. The robin hood method is not the answer, education and proper skills training is.

      lwelff - 2012-10-03 09:07

      where can i find the draft please? i would like to see the impact it will have on us

      JaredVN - 2012-10-03 09:19

      The problem with BEE and AA is that it is output-based. It wants to enforce racist quotas at the end of the process. This is doomed to fail, because BEE parasites add no business value, and are merely gravy train passengers. So too does AA destroy the self-confidence of AA appointees, because they must all bear the stigma of being appointed based on their skin colour. The only workable way is to look at inputs - better education and business skills for blacks, as MWF says above. So instead of plundering somebody else's wealth and being a BEE parasite, and instead of AA appointees being thrown in the deep end, let the well-educated and skilled blacks start their own businesses.

      gerda.vanrooyen.39 - 2012-10-03 09:38

      @MWF. AMEN!!! This is our country 2 & and will not be forced to go ANYWHERE!!!!

      wwrer.ww - 2012-10-03 09:54

      Some SA blacks are becoming like Nazis. The Nazis forced the Jews out of Nazi Germany in the 1930s. - 2012-10-03 11:16

      Hi Ho, Hi Ho, its off to shut down my business, retrench 20 black employees, and emigrate I go...

      dave.elmore.5 - 2012-10-03 12:49

      @Jared, great comment, but that wont happen will it, thats not the easy way out is it?

  • charlesdumbwin.dumbwin - 2012-10-03 08:18

    The racist ANC regime continues to squeeze the non-black life-blood out of the economy. Will they not stop until they have destroyed the whole economy with their racist apartheid legislation?

      mark.haupt.31 - 2012-10-03 08:29

      Think you've answered your own question, Charles.

      mfrater - 2012-10-03 09:07

      @kgolane, Simple: The gov has instituted legislation (BEE/BEEE/AA/EE) that forces certain races to be prejudiced against based on their skin colour, by law! In layman terms: the ANC has implemented Apartheid, the very thing it fought against. It has been tolerated by the minority group it excludes for the better part of 20 years. Only because it was felt that it should be tolerated for the sake of righting the wrongs of the past. However, it is now 20 years later and the law is now affecting the white youths who had no part in Apartheid, it is also benefiting the black youths who suffered nothing at the hands of Apartheid. This my friend is a recipe for civil up-rising, the very same sort of up-rising that your people did back in the day when it was happening to you.

      mfrater - 2012-10-03 17:14

      @luzuko, the very same stats you speak of show clearly that whites per capita are FAR more educated than the black counter parts. Did it ever dawn on you that THIS is why most the money is in the hands of whites even several decades after Apartheid and two decades into your government's rule? Get your brothers and sisters educated, teach them to catch their own fish instead of taking Peter's fish and sending him packing. Only to find the next day, when you're hungry again, you no longer have Peter or Paul to take fish from anymore!

  • victor.windsor - 2012-10-03 08:22

    You cannot help people who are not prepared to uplift themselves or pull their weight in the company "meaning doing some work" You cannot expect to just sit behind a desk and draw breath and draw a cheque every month.

      Klaus - 2012-10-03 09:06

      Yes you can, look at Zuma and his clan

      blowthis.ricepaddy - 2012-10-03 10:41

      @palu.jon. Go ask some miners or some truck drivers if they are part of the "Victory". The only victors are the comrades working for government or the black directors providing companies with a necessary BEE certificate.

  • bruce.williams.1044186 - 2012-10-03 08:32

    Classic case of "Take from the rich and give to the stupid" as the development will be run down to zero. This will cripple our economy and make Bob Mugabe jealous.

  • david.liddell - 2012-10-03 08:37

    So, if your company does not have at least 40% Black ownership, it doesn't matter what you do - the best you can achieve is a Level 3? (And more likely Level 5 or 6). Show me how this is any different to Zimbabwe's indiginisation programme, just by another route.

      cody.cross.1213 - 2012-10-03 08:48

      Not a different route just a different name.

  • Jake1984 - 2012-10-03 08:37

    If these new BEE codes go through our company will close within six to twelve months. These codes are unfair on the face of it and will give unskilled new companies that are black owned an unfair advantage. We currently employee 12 people of which two are white and the rest African. The owner has 30+ years in his trade and all his hard work over the last ten years will be for nothing. Thank you South Africa for potentially putting 30 (employees and their estimated dependants)people out on the street! Viva the rainbow nation! Viva!

      joanita.hilton - 2012-10-03 08:48

      Yes Jake. For some unknown reason, the dimwits writing or proposing these codes, dont consider job losses and economic decline. It's all about demand demand

  • hc12345 - 2012-10-03 08:37

    We all want jobs but do not want the work that comes with it.

  • dhvanwyk - 2012-10-03 08:45

    Despite our company being small and through a concerted effort and lots of money thrown after maintaining our BBBEE level 3,it was reduced to a level 4 because the goals move continuously. The clientele whom are gonvernment or parastatals now discriminate against us and we are considered in the same league now as newcomers to our industry and we are delivered to the whims and discrimination handed out by them. It was decided on a director's meeting to maintain what we have and seek other potential customers that rather make use of our expertise and knowledge rather than our involvement in Black political games. Farewell to our BBBEE status and any new employment opportunities for our Black employees and subcontractors. Farewell to corrupt governmental and parastatal agents and hello to those who still treasure value for money services, products and knowledge.

      butch.poulter - 2012-10-03 09:15

      My point exactly. When BEE rated companies need services/product they dont care whether you are compliant or not, as long as the job gets done.

  • tshepo.maganedisa - 2012-10-03 08:45

    and all the dumb ass readers who dont understand the reasoning behind will run to comment and expose themselves further, coming back to the article my fear out of this bill will be the lack of monitoring like other great bill we have.Whats the point of implementing all this great bill but dont have proper measures to monitor them *my fear*

      butch.poulter - 2012-10-03 09:13

      They cant even monitor the delivery of books to the schools to educate the future BEE employees. How the hell is this uneducated generation gonna run companies when they cant even do basic maths. Shouldnt this great government do something about the education crisis before forcing their racial laws upon currently profitable copanies. P.S nice suite

  • jason.evetts.5 - 2012-10-03 08:46

    for our grandparents mistake we as the youth of the country must now pay. people should remember that they just rent the planet from their children.

  • lex.holmes2 - 2012-10-03 08:46

    This is entrenched, legalized racism. Different rules for different races.

      press.enter.12 - 2012-10-03 09:51

      Large scale human rights abuses by the governing neo-racists against non-blacks in the "rainbow nation"

  • wwrer.ww - 2012-10-03 08:47

    This is now communism. You cannot force ownership into the hands of someone else. I feel the European Union, the US, Japan, Israel, Australia, New Zealand should now consider sanctions upon the racist ANC regime.

  • cody.cross.1213 - 2012-10-03 08:51

    (BEE) Black Entitlement & Enrichment?

  • mantothieve.missingman - 2012-10-03 08:52

    So what you want all companies to perform the same as govenrment which is 99% black ? We can all see they are doing an excellent job !

  • patrick.m.ellis.7 - 2012-10-03 08:54

    True story. A friend who refurbished mining equipment was repeatedly advised to comply with BEE or face non renewal of contracts. He refused stating he had built the company on his own and owed NOBODY anything. His contacts were not renewed, he closed his company and 27 black members of his staff are now all unemployed. Way to go ANC!

  • Duncan Colter - 2012-10-03 08:55

    BEE is proof of the governments failure. A racist policy aimed at discriminating whites. It will continue to fail because the minority work hard while the majority march and demand.

  • Abel Chake - 2012-10-03 08:56

    let see what impact it can make to the economy!and benefit it can make to them!

  • joe.blogs.98837399 - 2012-10-03 08:57

    Complaining is going to get us nowhere. Join our Class Action against the South African Government to end Affirmative Action and all Race Based Policies.

  • richard.zanner - 2012-10-03 08:58

    So the squeeze to get rid of the whites gets tighter. This is all it is. If BEE worked then maybe but it does not work. I am a professional person with my own one man business and employ 3 ladies one being black and 2 whites. I have no black partners or any partners for that matter and I chose not to have partners. Do I now have to go out there and find myself a black partner to be able to do some window dressing. Why can that same black guy, who wants to be my partner not just go out and do his own little business. Instead of leeching onto my business he then creates his own wealth and at the same time creates another business in our economy which we so desperately need. For this I do not suggest that black people should not find partnerships in companies but surely it should be driven by economic demand where one person has a skill to sell and someone else wants to buy it. Only this creates wealth within the economy which in turn helps also the poor. BEE is not an economic decision but was a political decision taken by the Government to try a quick fix. I was involved a a transaction where a white businessman had built a business from nothing over the span of his life. Eventually he was pushed into a corner though BEE and was forced to sell to his black partner who in turn was financed a substantial money through a Government empowerment fund on a loan basis at low interest rates. White guy retired in luxury, the company closed down in 6 months.

  • pieter.pretorius.106 - 2012-10-03 09:04

    BEE is blatant racism. Our constitution says you may not discriminate according to race, sex or marital status, but what is BEE other than discrimination. The one law contradicts the other. Only possible in a banana republic

      roberto.casarelo - 2012-10-03 09:40

      Viva BEE Racism is still very much alive.

      jeanpierre.heyns.1 - 2012-10-03 17:10

      Our constitution incorporates "fair" discrimination, as far as I know. Great being fairly discriminated against!

  • Jennifer - 2012-10-03 09:04

    If someone wants companies to be 'black' then build them yourself, stop destroying jobs with stupid rules~ Educate and stop throwing books away!

  • Klaus - 2012-10-03 09:05

    Last time I did Business with those Thieves it took them 18 month to pay -

      roberto.casarelo - 2012-10-03 09:39

      Al least you you paid we are not given a chance with white business for years.So get business from a white racist next time

  • - 2012-10-03 09:25

    The only way a dissatisfied, yes, mainly white, populous can hope to effect any sort of change is to apply pressure to the corporates by boycotts etc. A realisation of an over-extended and racially based economic policy that creates more division, in a country that is aware of black ANC governments dishonest and deceptive use of race in order to manipulate public opinion, could only occur through action that fiscally negatively impacts business. In essence, the government does not care about "whiteys" opinion, they are documented as not being interested in unity, however, the knock-on effect of financial cut-backs on kick-backs will affect legislation. After 18 years of a failed policy, that was supposed to exist for 5, (and it failed because the ANC government failed to deliver the education levels needed to level the employment playing field) it needs to be stated that the population now entering in to the employment marketplace were born in to a free South Africa. There is no purpose or reason to continue with black economic empowerment for anything other the political purpose. The fact the DA is not prepared to take a stand or even make a statement regarding this shows how toothless, ineffectual and fearful they are. For a country as fractured as this to progress will take a leader and a political party with courage to look at the sins of the past and move on, forward, together and not live in a cycle doomed to repeat them.

  • barry.millward - 2012-10-03 09:31

    Sounds to me like the White Man must build a Company from scratch and then hand 40% over of it over to a Black Man for nothing. What planet is the ANC on!!! Why can the Black Man not get of his backside and invest his own time and funds into his own Business and create jobs for his people. As this would then give him the choice of either employing Black or White People. I bet you he would Employ the Whites as they want to work. In the UK, they love White South Africans as they know they are hard workers and I think this is the same in every Country they have adopted as home. Although it never feels like home and it will never be. But thanks to what the ANC and it's Counter Parts are doing it is not Financially viable to come back home even if we wanted to. The only problem is that the whole world feels sorry for the Black People and it does not matter where you are in the World they will always play on there Colour and get away with it.

  • vmeiring1 - 2012-10-03 09:33

    BEE should be seen as a disgrace and a slap in the face to black people. It clearly indicates "we are just not good enough to get jobs on our own... Doesn't matter how u see it, our BEE managers are way behind those who deserved their positions. Banana republic!!!!! That's why this country has gone from a 1st world to beyond a 3rd world.

  • - 2012-10-03 09:36

    This government is dead set against recovering the economy, it is making it daily more and more difficult to operate a successful business. They are working against job creation, and in the process hurting the same people they want to benefit. Let business create jobs and do what they do best instead of wasting all the time with this crap

  • winifred.watson.9 - 2012-10-03 09:38

    Its time for white people to create more family run business and to start supporting each other and stop doing business with these Companies that support this type of nonsense. Bring back the corner grocer etc. In any case this dictator government is going to lose a lot of investors etc because of their inteference in business. Why dont they rather concentrate in fixing up all their broken down infrastructures and cleaning up their own house. The main reason why this country is like it is because they are scared to let the pale faces in but our money is very good for them. They are even too scared to let us help. The main reason, they dont want us picking up on their corrupt system

  • barneydebarn.andrews - 2012-10-03 09:43

    I see many of you criticizing something you do not completely understand neither do you give workable solutions. I'm not saying that govt's BEE Strategy to increase the spread of wealth amongst blk ppl and get more blk ppl involve in the formal and 1st tier economy is the only solution. However the fallacy that the most qualified person should get the job will also not address the problem that 3% of our population which is the minority group controls 97% of the economy. Blk ppl are still the poorest and still can’t afford the best education let alone a decent meal, do some research via the FIFA 1 Goal Initiative and get to understand the impact or the relationship between malnutrition and education. But I agree fully that skills and supplier development is key, in SA and in America - SMME employs well over 50% of both countries EAP, and sadly majority SMME are also exploiting (under paying and not training) their employees, so how do we make sure that workers are properly paid and trained, BEE addresses this issue for me and maybe before we criticize BEE maybe study the codes 1st than make valuable input. But YES! Govt should not sit back and leave it to the pvt sector to fix our problems and forget the important part they have to play by ensuring a good Education, Health, Trade etc systems and strategies that would create more healthy environments to ensure our socio-economic wellbeing

  • shaun.coles - 2012-10-03 09:50

    How does somebody who is self-employed reach these criteria. I work on my own.. Do I have to employ somebody and give him half the business, just so I can stay in business. No wonder South Africa is on the same path as every other african country.

      mikel.kiparski - 2012-10-03 16:57

      get your wife to careful,what you wish for..THEY DONT LIKE PAYING...GET PAYMENT IN ADVANCE

  • kindness.sweet - 2012-10-03 09:56

    People are complaining about BEE, EE and AA, why didnt they complain about the Land act that was passed in 1913??? The Apartheid and the racist people that make our country to be what it is today? if it wasnt for the Botha, van der merve, pitorius, du toit, ossthuizen, boomgart etc. Our country wouldnt have to undergo such policies. Its a payback time. Be happy that you have a choice to buy land where ever you want, and you can vote. we couldnt back in the, Bravo to this policies, they need to be monitored 100%. no fronting this time around ne?

      Duncan Colter - 2012-10-03 10:30

      And all you prove is that you are no better. Only in power

      The-Azanian - 2012-10-03 12:32

      Amen kindness...

  • henk.vanrensburg.31 - 2012-10-03 10:02

    Bunch of racists!

  • farouk.baulackey.9 - 2012-10-03 11:11

    I am trying to piece together how this system SA has in place works. On the one hand we have this Employment Equity act, which states that all employees are equal and should be treated in the exact same way. While on the other hand there is this Broad Based Black Economic Empowerment Act which states that preference should be given to companies that meet these acts requirements. What I don't understand is how both these laws are in effect at the same time. Clearly there is a contradiction in the way these two laws coincide.

  • luks.vee - 2012-10-03 11:27

    For as long as the media demonises government programs,the apathy by the public, as may be inferred from the majority of comments, shall indeed be the order of the day. Most people from 'historicaly previleged 'races,find transformation process a bitter pill to swallow. We need to pull together to make SA a successful nation.

      christiaan.vanvuuren.9 - 2012-10-03 12:44

      I do agree with the fact that all should lull together however I do not agree that BEE is the way. Sure it will help most people in the short term but if the government does not step up ito service deliveries like education then this will remain a short term quick fix. As good as that is for the present generation previously disadvantaged races, it does nothing for the generations after. And SA would experience faster and sustainable growth if their priority was set on the long term.

  • xmkungeki - 2012-10-03 11:57

    I don't understand the gripe here..those priority elements are more developmental...esp Enterprise nd supplier dev, and Skills dev..previously disadvantaged must be trained to participate in the mainstream and black small business must be fully suported....let me read the draft, who knows I may become a beneficiary!

  • The-Azanian - 2012-10-03 12:25

    This is how BBBEE was supposed to have been like in the first place instead of creating black billionares only.

  • heidi.pierce.12 - 2012-10-03 13:11

    If you are really concerned about uplifting black people, there are a thousand things you can do. You can create a state manufacturing company. You can tax all companies more and use it to create skills training institutions. You can provide tax benefits to companies who have developed black company leaders, or uplifted schools, etc, etc. But it is not about upliftment, is it? Frankly from our side it look as if you could not care less about uplifting poor black people. It is pure and simple about revenge. For this reason you do not care if you kill the goose that lays the golden eggs.

  • antoinetteapache.rossouw - 2012-10-03 13:29

    Strange that BEE is there to benefit the majority in SA. Should it not be the other way around? "Black Evil Empowerment" should be a more apt name. The country is on a rollercoaster downhill. The present government is in denial about their leadership. Only when all is lost will they yet again point the finger to the whiteman!

  • kindness.sweet - 2012-10-03 14:12

    I dont understand why people get emotional about BEE, as we should be the one complaining that the process is too damn slow...This fronting is killing this initiative, and this should re-engineered quickly. our people are losing patience. This is long overdue, black companies dont have to stress at all about this, only those who want to exploit blacks should get their ducks in a row. Forward ever, Asijiki!!!

  • quartus.vanzyl - 2012-10-03 16:48

    Time is ripe for international economic sanctions against this racist country like during apartheid. What is good for the goose is good for the gander.

  • mikel.kiparski - 2012-10-03 16:49

    THE WORLD LOVES AA,BEE,half of south african TAX payers have left the country,the other half are ready to retire.

  • sefako.mokgalaka - 2012-10-03 17:15

    Any reason for deleting my comments News24?

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