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will BEE codes help broader sa
1 February 2007
A briefing of MPs on the Department of Trade and Industry's black economic empowerment codes turned into a debate about whether they were balanced — and whether a danger did not lie in focusing on the enrichment of the few.
Dti's chief director, Polo Radebe, noted on Wednesday afternoon that measures of black economic empowerment in small enterprises would apply to business turnovers of between R5-million and R35-million a year.
They would need only to select four of seven scoring elements of the bigger companies.
The seven elements for the bigger companies included ownership — where 20 points would apply out of 100 points on a "generic scorecard" — management control (10 points), employment equity (15 points), skills development (15 points), preferential procurement (20 points), enterprise development (15 points) and socio-economic development (five points).
The BEE codes will have a significant impact on business seeking state contracts. In terms of the Black Economic Empowerment Act of 2003 every organ of state and public entity must take into account a preferential procurement policy.
The National Assembly's trade and industry committee was briefed by Radebe on the codes of good practice for broad-based black economic empowerment.
ANC MP and trade and industry committee member, Professor Ben Turok, said the aim of empowerment was "to change the economy", spread wealth and ensure that "the balance is right".
But he wondered whether if he filled the shoes of a small black businessman, that businessman would be happy with the emphasis on advancement of elites. "The emphasis is overwhelmingly in the direction of enrichment... of elite creation," said Turok.
Democratic Alliance MP and committee member, Pierre Rabie, referred specifically to the agriculture sector and asked where the incentives would apply to employ labour.
He told I-Net Bridge afterwards that a brick maker, for example, might find it less onerous to employ five instead of 12 workers if he became mechanised. He nevertheless, would remain compliant with BEE requirements although he was not necessarily seeking to sell his products to government or engage in government contracts. "Where are the incentives?" he said.
Radebe said she did not believe the bias was in favour of elites. She pointed out that 45 points — ownership, management control and employment equity — out of 100 points on the BEE scorecard could be argued to favour elites. But the other 65 points focused on the workers and those who were unlikely to have a shareholding in a company.
DA MP Les Labuschagne asked how people in his Gauteng constituency, which included a large white squatter settlement, would benefit from the BEE codes.
Committee chairperson and ANC MP, Ben Martins, said the committee needed to address "all economic citizens in this country". He said: "We will discuss the issue of poverty across race, colour, class and creed."
Donwald Pressly, I-Net Bridge, www.business.iafrica.com
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