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EMPOWERMENT: Government Fails BEE


Recent Western Cape Business News

It is no secret that B-BBEE has not reaped the results that its developers had anticipated upon the legislative inception of the B-BBEE Codes. According to Keith Levenstein, CEO of EconoBEE, Government’s failure to even make an effort to comply with the B-BBEE codes is a major contributor to this sad state of affairs. EconoBEE has recently undertaken a short desktop survey by asking various stakeholders and public entities for their own BEE scorecards, and the results are simply deplorable.

Many of BEE’s top role players are non-compliant and do not have a scorecard to speak of. SANAS, the accreditation body of verification agencies, refers to a self-rating conducted internally in 2008. The Department of Labour and its associated entities, including the UIF, Compensation Commissioner and CCMA, have no scorecard. The National Empowerment Fund, the dti company that assists with financing of BEE ownership deals, as well as Cipro, Proudly SA, and the BEE Council, responsible for advising the President on BEE issues, have all failed to even attempt a scorecard.

When EconoBEE approached Thabo Masombuka, Head of the Secretariat for the BEE Council and a Director at the BEE unit at dti, he stated; “... the Council is... an advisory institution set up to advise government on the progress and matters related to B-BBEE and therefore does not have ownership, management and does not engage in any other activity that is measurable in terms of all other elements of the BEE scorecard. To expect the Council to have a B-BBEE scorecard clearly flies in the face of logic.”

Levenstein states that whilst it is true that some of a company’s spend with these entities are exempt in terms of their preferential procurement calculation, this does not imply that these entities do not need a scorecard, in the very least, to set a good example: “What is most disconcerting is that most seem to be completely unaware that a B-BBEE scorecard would be good for them, and in terms of the Codes, they do need one. One of the missions of the BEE Council is to monitor BEE compliance of government and enterprises. They have no interest in producing their own scorecard.”

Levenstein continued his argument to say; “It is trite to state that these public enterprises cannot get a scorecard because they do not have ownership – the specialized scorecard takes this into account and allows all enterprises without ownership to earn all the points from the remaining six elements.”

The survey revealed that some public enterprises do have scorecards: Eskom has a level 2, whilst the energy regulatory body, NERSA does not and continues to use ownership and HDI status as its sole criterion for tender processes. SABC has earned a level 4, but again the communications regulatory authority ICASA has not undertaken the scorecard calculation process.  Telkom is level 4 and SAA is a weak level 8, but has at least gone through the effort to calculate their score.

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