Davies hammers industry, commerce on BEE participation

Currently, the department of trade and industry (DTI) has in place a 60-day period for comment on the revised broad-based black economic-empowerment (B-BBEE) codes of good practice, i.e. until 5 December 2012. He has also tabled a new Bill on B-BEE in Parliament immediatelt before the Christmas recess.

With this in mind, Minister Davies said in a conference recently that BEE remained a vital cog in the development of South Africa, stating, “It is not just a social or political imperative . . . but an economic imperative as well”, he said.

Davies said it was the belief of his ministry that South Africa “could not expect to grow if business leadership remained in the hands of the small minority.”

The current generic scorecard in the new proposals for comment is reduced from seven to five essential elements with a total of 105 points assigned to these five elements.   All companies, except exempted micro enterprises, have to comply with all the elements of the scorecard as revised.

The introduction of sub-minimum targets for the priority elements is contained in the proposals with the proviso that if such minimum compliance is not achieved, large companies will have their status reduced by two levels and smaller companies by one level.

Davies said that issues surrounding fronting have been amended and added that DTI was investigating possibility of appointing a commission or body to investigate abuses and added, “We are also looking into penalties attached to those kinds of practices.”

This was something that was considered as last resort when BEE charters were first envisaged.

Despite having announced in a separate statement that DTI had been in meetings with vehicle manufacturers and that a target of 1.2m vehicles made in South Africa per year was the objective, he drew attention to the fact that the manufacturing sector as a whole was not “transformed”, by which it must be assumed he meant it had no B-BEEE charter.

However, he saw great development in the automotive industry as far as small business was concerned. “We need to look at how we can make localisation a tool and once that happens, we need to look at how we can get black-owned companies much more active in this space,” Davies noted.

DTI recently announced “an incubation support programme for small businesses to encourage private sector partnerships with government, whereby large companies assisted SMMEs, and even medium-sized undertakings, with skills and technology transfer.

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