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IN THE motor industry, where government has criticised the slow pace of transformation, Renault's South African subsidiary has recently earned a level 4 rating for black economic empowerment (BEE) compliance.
This means that it can claim 100% compliance – the best in the motor industry.
The enthusiasm with which the company speaks about BEE today, compared with the never-ending litany of complaints from many local South African companies, makes one wonder whether it is time for South Africans to change their thinking on the issue.
Marc Gantzer, Renault's financial director in South Africa, said BEE was initially a "very strange" concept for the company when it decided to re-establish itself in South Africa in 2001.
Today it regards the country's BEE legislation as an aid to its business model, rather than an obstacle.
In France it is completely illegal to keep any statistics related to race, whereas in South Africa one has to tick the race box on every official form – as to whether white, black, coloured or Indian. Renault found this rather a shock when it arrived in 2001.
But Renault has a strong policy of acquiring a local identity in every country where it operates, says Gantzer. The company wants to be part of the market and the community. Today it considers the BEE scorecard a useful route map to its objective.
The scorecard measures BEE according to a company's performance in seven areas: socio-economic development, small business development, preferential procurement, skills development, equal opportunities for employment, management control and ownership.
As far as socio-economic development is concerned, Renault was probably fortunate to have a French partner in the non-governmental organisation (NGO) Valued Citizen's Initiative.
This NGO was started in 2000 by a French citizen, Carole Podgotti-Ngono. It trains teachers and education workers to foster national pride among learners in township schools.
This is an outstanding organisation, says Gantzer. It may sound abstract, but is actually very down to earth and achieves enormous success. Over the past 10 years it has impacted the lives of 425 000 children. This year alone 32 000 learners in 120 schools are involved in its programmes.
The average matric pass rates for township schools participating in this programme has risen from about 60% to 85%.
Renault has been the organisation's main sponsor since the company re-entered the local automobile market in 2001.
To help develop small businesses, Renault awards companies in black ownership preferential procurement, especially black-owned vehicle-rental companies. Last year, when the motor industry was under heavy pressure to cut costs, the company outsourced its internal cleaning to a small company that the employees themselves had founded.
To help them, Renault contracted them to clean its buildings. It put a lot of effort into ensuring that they could create a viable enterprise and allow their company to grow, says Gantzer.
Preferential procurement carries the heaviest weighting in terms of the scorecard. Molly Prakash, Renault's general manager for support services, who supervises procurement, says this does not mean that purchases may be made only from black-owned companies.
A young white entrepreneur with a turnover of less than R5m a year immediately becomes a level-4 supplier because it is a small business enterprise from which the company is buying.
Homing in on local talent
The idea is to help the economy grow and Renault therefore tries to encourage new enterprises through preferential purchasing, says Prakash.
Renault helps suppliers without BEE accreditation to obtain it. The company has several one-man-business suppliers. One can't disqualify a one-man business, but one can help it to achieve BEE compliance, she remarks.
Gantzer says the legislative BEE scorecard has been cleverly devised in this respect.
Three out of 20 points on which preferential procurement is measured are awarded for purchasing from small businesses. For these enterprises the scorecard is much simpler, he explains.
Renault's fleet management is handled by a one-man business such as this, which was initially full of fear, but was assisted in obtaining BEE compliance without significant expense.
Opportunities for skills development are limited because Renault imports most of its products. It follows a programme in which it employs young graduates for six months. If things go well they stay for another six months, after which they become preferred candidates for permanent positions.
It therefore takes a while before they can reach the top positions in the company – but so far it has worked well, says Gantzer.
As far as fair hiring practice (affirmative action) is concerned, progress is slower. But he says that the company prefers to take things slowly and make sure they are done correctly.
Of the eight top positions in the company one is occupied by a previously disadvantaged South African, and only three are French citizens.
Two years ago seven of the top positions were still occupied by French nationals.
At the end of this year there will be only two who are French. The company is adopting this strategy because there is only one way to become a fully-fledged South African company and attract the best talent – by showing South Africans that the company's top positions are open to them, says Gantzer.
- Sake24.com
This means that it can claim 100% compliance – the best in the motor industry.
The enthusiasm with which the company speaks about BEE today, compared with the never-ending litany of complaints from many local South African companies, makes one wonder whether it is time for South Africans to change their thinking on the issue.
Marc Gantzer, Renault's financial director in South Africa, said BEE was initially a "very strange" concept for the company when it decided to re-establish itself in South Africa in 2001.
Today it regards the country's BEE legislation as an aid to its business model, rather than an obstacle.
In France it is completely illegal to keep any statistics related to race, whereas in South Africa one has to tick the race box on every official form – as to whether white, black, coloured or Indian. Renault found this rather a shock when it arrived in 2001.
But Renault has a strong policy of acquiring a local identity in every country where it operates, says Gantzer. The company wants to be part of the market and the community. Today it considers the BEE scorecard a useful route map to its objective.
The scorecard measures BEE according to a company's performance in seven areas: socio-economic development, small business development, preferential procurement, skills development, equal opportunities for employment, management control and ownership.
As far as socio-economic development is concerned, Renault was probably fortunate to have a French partner in the non-governmental organisation (NGO) Valued Citizen's Initiative.
This NGO was started in 2000 by a French citizen, Carole Podgotti-Ngono. It trains teachers and education workers to foster national pride among learners in township schools.
This is an outstanding organisation, says Gantzer. It may sound abstract, but is actually very down to earth and achieves enormous success. Over the past 10 years it has impacted the lives of 425 000 children. This year alone 32 000 learners in 120 schools are involved in its programmes.
The average matric pass rates for township schools participating in this programme has risen from about 60% to 85%.
Renault has been the organisation's main sponsor since the company re-entered the local automobile market in 2001.
To help develop small businesses, Renault awards companies in black ownership preferential procurement, especially black-owned vehicle-rental companies. Last year, when the motor industry was under heavy pressure to cut costs, the company outsourced its internal cleaning to a small company that the employees themselves had founded.
To help them, Renault contracted them to clean its buildings. It put a lot of effort into ensuring that they could create a viable enterprise and allow their company to grow, says Gantzer.
Preferential procurement carries the heaviest weighting in terms of the scorecard. Molly Prakash, Renault's general manager for support services, who supervises procurement, says this does not mean that purchases may be made only from black-owned companies.
A young white entrepreneur with a turnover of less than R5m a year immediately becomes a level-4 supplier because it is a small business enterprise from which the company is buying.
Homing in on local talent
The idea is to help the economy grow and Renault therefore tries to encourage new enterprises through preferential purchasing, says Prakash.
Renault helps suppliers without BEE accreditation to obtain it. The company has several one-man-business suppliers. One can't disqualify a one-man business, but one can help it to achieve BEE compliance, she remarks.
Gantzer says the legislative BEE scorecard has been cleverly devised in this respect.
Three out of 20 points on which preferential procurement is measured are awarded for purchasing from small businesses. For these enterprises the scorecard is much simpler, he explains.
Renault's fleet management is handled by a one-man business such as this, which was initially full of fear, but was assisted in obtaining BEE compliance without significant expense.
Opportunities for skills development are limited because Renault imports most of its products. It follows a programme in which it employs young graduates for six months. If things go well they stay for another six months, after which they become preferred candidates for permanent positions.
It therefore takes a while before they can reach the top positions in the company – but so far it has worked well, says Gantzer.
As far as fair hiring practice (affirmative action) is concerned, progress is slower. But he says that the company prefers to take things slowly and make sure they are done correctly.
Of the eight top positions in the company one is occupied by a previously disadvantaged South African, and only three are French citizens.
Two years ago seven of the top positions were still occupied by French nationals.
At the end of this year there will be only two who are French. The company is adopting this strategy because there is only one way to become a fully-fledged South African company and attract the best talent – by showing South Africans that the company's top positions are open to them, says Gantzer.
- Sake24.com
