Paul Janisch

Intervention coming in mining sector - includes the Mining Charter annual assessment

The other areas identified as requiring immediate intervention were: the annual assessment of the mining charter; the socio-economic conditions of workers and the areas where mines operate; the identification of long-term policy measures to end uncertainty about sector regulations and tax.

via www.iol.co.za

And on this subject - I heard from a source that mining companies don't report on spend with multinationals at all.

By the way - when you read the whole article you'll notice that there is little urgency to these "action points".

Mining Charter and multinational suppliers – can anyone help me with this problem?

There is a little dilemma facing a client of mine who is a multinational and a supplier to Anglo. The BBSEE Charter has these targets for procurement

Description	Measure	Compliance Target by 2014
Procurement spent from BEE Entity	Capital Goods	40%
	Services	70%
	Consumable goods	50%
Multinational suppliers contribution to the social fund	Annual spend on procurement from multinational suppliers	0.5% of procurement value

The dilemma is this:

1. Does Anglo have a definition for multinationals?
2. The Charter is clear that multinationals who supply capital goods must contribute 0.5% of the procurement value to the social fund (which I assume would be Anglo's social fund). What happens with consumable or consumer goods that a multinational supplies? I can see a few possible options

 

• They are regarded as non-discretionary spend and therefore eliminated from the procurement calculation
• They are lumped in with capital goods and the multinational contributes that amount to the social fund as well.

And the real problem is that Anglo can't answer my questions and I've asked a few people in Anglo about this. What I have heard is that Anglo does not report on the multinational spend and they don't know what this social fund is – although my reading of the Mining Charter suggests that each mining house has their own social fund.

Harmony in their 2012 annual report have the following to say about both the social fund and multinational suppliers

with the definition of a multinational supplier now established, Harmony will negotiate participation with relevant suppliers and develop an appropriate system to track these commitments.

But they don't elaborate as to what this multinational is – so I suppose we can use any acceptable definition. A common feature in every definition is a company this is headquartered in one country with a subsidiary in at least one other country. The B-BBEE Codes of Good Practice define a multinational as a "Measured Entity with a business in the Republic of South Africa and elsewhere which maintains its international headquarters outside the Republic."

We know that the mining companies are putting more pressure on their suppliers to meet the definition of a BEE supplier – take a look at this Kumba letter from last September, but they do not make allowances for multinationals.

Is there anyone out there in the interland who can help me with this problem?

Zoomer transcends and BEE is the consequence

Transcend sent out an email today saying (and no I'm not putting up a hyperlink to this –they are my competition)

It is rumoured that the Revised BBBEE Codes will be gazetted as soon as July 2013, yes that's right, next month. Now the Dti could always delay this and only release them toward the end of the year, but this is what we have heard, Having said this we will be planning public sessions for you to understand the impact of the revised BBBEE Codes...

And then Zoomer told parliament today that

the government planned a shake-up of its "black economic empowerment" policies aimed at redressing the imbalances of white-minority apartheid rule.

Are the two linked in anyway? The shake-up of the laws does not specifically mean the codes. But you have to love the reference to "white minority apartheid rule". This is the rhetoric of the incorruptible and competent ANC government for the next election. If you had any doubt as to where the Black Business Council's allegiances lie then look no further than Zungrabber's comment in a Stephen Grootes article from a few weeks ago.

The real reason the Black Business Council (BBC) exists is because its members are "economic apartheid fighters", says general secretary Sandile Zungu.

But what makes this little group of disgruntled whiners so unique is that they seem to have realised that the private sector sees them for the players they are and so they are only focusing on state business.

My fuck Zoomer – what a fantastic legacy you have already started preparing for yourself. The racial polarising of the country is probably the least of your conquests but one that is going to take the longest to repair.

Canadian employment equity – their version of black is called visible minority

Courtesy of the Globe and Mail

In Canada, anyone who considers themself neither white nor aboriginal is classified by the government as a visible minority. It is an artificial concept that has become unnecessary and counterproductive.

Ultimately, the dividing line is arbitrary. For example, Arabic people from North Africa and the Middle East are counted as "white" in the U.S. Census. Yet anyone who ticks the Arab box on Canada's National Household Survey is counted as a visible minority – unless they tick both the white box and the Arab box. Then they're white. Indeed, there is something almost racist about the assumption that whites are the standard against which anyone else is noticeably, visibly different. That may be why the United Nations Council on the Elimination of Racial Discrimination has asked Canada to reflect upon its use of the term visible minority.

The Canadian government's official line is that the term is needed to support programs that promote equal opportunity. Visible minorities are one of four groups covered by the federal Employment Equity Act. (The others are women, people with disabilities, and aboriginal Canadians). The Act requires employers to remove barriers to employment facing members those four groups, and to "correct the conditions of disadvantage in employment."

While promoting equity is a good thing, the Employment Equity Act does so with too broad a brush. It lumps all visible minority groups together, instead of focusing on those who really are actually struggling in the labour market. As Justice Rosalie Abella wrote 30 years ago, when she chaired the Royal Commission on Equality in Employment:

"To combine all non-whites together as visible minorities for the purpose of devising systems to improve their equitable participation, without making distinctions to assist those groups in particular need, may deflect attention from where the problems are greatest."

Can you imagine if we had an EE Act that addressed employment issues on the basis of skills' deficit and not the Manyi-ite "economically active population". Imagine if it included all who were poor and without hope. Dream on mate, the ANC government lacks the will, competence, creativity and maturity to dream up anything as equitable as that.

Tolling is good for the economy - SANRAL propaganda

Tolling pays. That is the simple truth – it makes transport easier, boosts economic growth and individual businesses. And makes travelling more pleasant for private citizens.

via www.moneyweb.co.za

But wait, there's more to this. Don't you just dig "Most important is that for each rand of cost, initial capital works, on-going maintenance and costs, society benefits by R8.40."

What Vusi Mona does not mention that the toll roads will stretch an already cash-strapped middle class even further than is vaguely reasonable. This stretching will have a direct benefit on the working classes because prices will need to go up to accommodate this and it's possible that those people that are employed by the middle class in their homes etc will no longer be affordable.

No Vusi - this propaganda is not convincing. In fact it made me pay OUTA a little more than I planned to.

Zulu group accuses South African Indians of racism

DURBAN: A Zulupressure group has called forSouth African Indians to be excluded from transformation processes, citing "overt racism" towards black South Africans from the time that  Mahatma Gandhi was in the country.

But both the provincial government and the Indian community have dismissed the suggestions.

Mazibuye African Forum, claiming to advocate socio-economic justice for indigenous Africans in South Africa, particularly in KwaZulu-Natal province, was reacting to a decision by the provincial government to erect a statue in Durban to commemorate the arrival of the first Indians in 1860 as indentured labourers for sugar cane farms.

"We have and are still calling for the Indians to be completely excluded from Black Economic Empowerment, Affirmative Action as well as Employment Equity unconditionally, with immediate effect and reiterate that their classification with Africans as a previously disadvantaged group is not only counter-productive but counter-revolutionary as well," Mazibuye chairman Zweli Sangweni said in a statement.

"Indians have been overtly racist towards Africans from the time they were brought in South Africa by the British Imperial Government," Sangweni said.

via timesofindia.indiatimes.com

This wasn't picked up by the local press.  Only in the province where Zuma is induna.

We can happily ignore this press release, but if you are a Facebookworm then you can look at their bullshit schpiel

BBC contemplates marching to Treasury – good idea because you aren’t going to get parking near their offices

BDLive carried this story this morning (and no I haven't subscribed and won't do so until they change their viewing rates). The Black Business Council (BBC) has long been upset with the PPPFA. With such ZumaLuminaries like Zungrabber on their board they are able to namedrop very effectively and force a meeting with Treasury to voice their concerns. They plan to march to Treasury in Pretoria "to express our serious issue with the Preferential Procurement Policy Framework Act (PPPFA) and the negative role of the National Treasury towards BEE". They want the PPPFA repealed altogether so that set asides can be used to allocate spend to certain types of black business. Something that Malusi Gigaba has insisted that he will allow. But the best thing here is that they are threatening to go to the Constitutional Court for the final word. However I don't think that Zungrabber and his lot will be willing to shell out cash for this case. I suspect they are going to browbeat and namedrop until Pravin relents. Let's say that they do go to the Constitutional Court and I was the advocate representing Treasury (I'm sure I could fake a university degree and forge my acceptance to the bar to do this), this is the argument I would use.

The BDLive article refers to section 217, a section of the constitution that I have blogged about often. Section 217 is where we find the need for the PPPFA, specifically section 217 (3)

National legislation must prescribe a framework within which the (allocation of preference points) may be implemented.

But – section 217(1) says this

217. (1) When an organ of state in the national, provincial or local sphere of government, or any other institution identified in national legislation, contracts for goods or services, it must do so in accordance with a system which is fair, equitable, transparent, competitive and cost-effective.

It identifies five principles of procurement that every company should implement; namely fair, equitable, transparent, competitive and cost-effective. Treasury argues that these five principles provide enough protection for those who claim they are marginalised. They further argue that the PPPFA provides preference points that take those same principles into account. Set-asides would compromise the fairness, competitive and cost-effective principles.

The BBC on the other hand are going to depend entirely on a piece of section 9 (2) of the Constitution

Equality includes the full and equal enjoyment of all rights and freedoms. To promote the achievement of equality, legislative and other measures designed to protect or advance persons, or categories of persons, disadvantaged by unfair discrimination may be taken.

They will argue that certain people are still unfairly disadvantaged and that the PPPFA does not go far enough. People like me would counter that by suggesting that the promotion of a class of person in state procurement favours them unfairly over other citizens. After all section 9 (3) says

(3) The state may not unfairly discriminate directly or indirectly against anyone on one or more grounds, including race, gender, sex, pregnancy, marital status, ethnic or social origin, colour, sexual orientation, age, disability, religion, conscience, belief, culture, language and birth.

But the BBC won't take that lying down. They'll say that section 36 (limitation of rights) allows the limitation of certain rights. This is where my constitutional knowledge becomes scratchy. I would imagine that the rights of certain people (read white or foreigners) could be limited "in terms of law of general application to the extent that the limitation is reasonable and justifiable in an open and democratic society".

Ultimately the final argument is going to revolve around section 9(5)

Discrimination on one or more of the grounds listed in subsection (3) is unfair unless it is established that the discrimination is fair.

We'll argue that the discrimination proposed by the BBC is unfair and they'll argue it's fair. It is therefore vital that this issue does go to the Constitutional Court. But as I mentioned earlier in this post, I somehow doubt that it will get to the highest court in the land, the BBC and Malusi will no doubt namedrop and bamboozle Treasury into agreeing to this because the ANC needs to deliver something to the very pissed off black middle class. There will be consequences however.

1. The state will pay an unnecessary premium for goods supplied by black suppliers. This concern has been voiced by Treasury many times over the last ten years.
2. The taxpayer is going to have to foot the bill for this which is going to result in Treasury allocating funds for things like healthcare, security, basic services etc. to state procurement.
3. Those black suppliers who are now doing very well thank you very much from the state will never be competitive in the private sector that will be loath to pay a premium from companies that have little more to offer than the colour of their skin.
4. It will further divide the economy into black suppliers who look after the state and white suppliers (i.e. not black) who look after the private sector (and probably supply the black companies to sell to the state).
5. And the ANC will then claim that the private sector is white and racist and the reason why black South Africans are so poor.

All of this is probably of little concern to the BBC or ANC. Both live for the present and have little concern for the future. And the future does not look too rosy at all.

Water affairs issues water licences not DAFF

Thanks for correcting this Andrew.  Andrew wrote in the comments

Water use licensing is undertaken by DWA. The current demise of DWA is not unlike that of DAFF though....but it is a different minister....

It seems that I am a little too hasty to blame incompetent ministers on everything, Tina gets a reprieve.  I've made changes to the original post.  

The link to apply for water rights is here.

I was also a little too hasty to post the complete AgriBEE scorecard. Here it is 

 

AgriBEE – why would you bother?

A farmers' union has asked me to present a course on the AgriBEE Code. In conducting my research I could not fathom why any entity involved in agricultural would want to pay any attention to the AgriBEE scorecard. It's rather like paying your TV licence because it's the right thing to do but otherwise there is no other perceived benefit. The real issue with agricultural land is that of land restitution and the AgriBEE Code attempts to offer some sort of incentive to agricultural land owners to become part of this process. The only incentive offered being BEE points under the ownership scorecard. Government has committed to a number of initiatives to facilitate ownership under the code – all of which are stated land reform outcomes and land reform is still awaiting the finalisation of the Land Reform Green Paper. Most of the ownership aspect of the AgriBEE code does depend on the finalisation of the land reform legislative process.

• Contribute to increasing access and acquisition of agricultural land by Black People, through its existing programmes;
• Proactively acquire suitable agricultural land that comes onto the market for land redistribution
• Use above mentioned land and agricultural land that reverts to the state through foreclosure of indebted farmers, for redistribution, including through long lease arrangements (e.g. 99 year lease)
• Promote sustainable management and use of natural resources
• Finalise the land restitution process (it must be noted that the draft said this was to be done by 2008 – the code leaves this deadline open)
• Encourage the development of a land lease and land rental market
• Promote the consolidation and tenure on traditional community land in terms of relevant acts that support communal land
• Secure the ownership, access and tenure rights of Black Designated Groups through the registration of old order rights or new order rights into freehold ownership.

Returning to my earlier argument that, other than land redistribution there is little reason to implement a BEE scorecard within an agricultural environment. Implementation of BEE cannot be enforced without a procurement process driving it. It is because of the preferential procurement element that all BEE scorecards exist. The principle is simple – a large corporate asks its suppliers for a BEE scorecard because this has an impact in their own preferential procurement scorecard; the supplier asks its suppliers and so you get further down the chain. BEE has succeeded because of this process and this is without any assistance from the government. Agricultural produce, like all consumer goods should in theory fit in with this model. The retail sector is not the fastest adopter of BEE because there is less pressure on them to comply. The average customer is not concerned about the BEE status of their favourite retail store (although I think Jimmy Manyi might be), they purchase for a variety of reasons that are unrelated to BEE status. It is very likely that agricultural products are going to follow the same process. Pick 'n Pay is not going to quibble about the BEE status of a carrot supplier, they are going to buy because the stock is available and the price is right. Similarly, Tiger Brands is not going to prioritise baked bean suppliers on the basis of BEE status because it might possibly impact on the quality and price of the product which will result in me not buying a tin of Koo baked beans. The code does make a pathetic attempt at creating preferential procurement urgency by claiming that government will

• Align their procurement practices with AgriBEE when procuring goods and services from the agricultural Sector
• Provide Black People and QSEs preferred supplier status in the procurement of goods and services;
• Identify, prioritise and target Black entrepreneurs and Enterprises which contribute to broad-based BEE when awarding tenders and contracts to entities in the private sector; and
• Utilise all legislative and other measures available to it, including preferential procurement, to influence the attainment of broad-based BEE objectives

Of the four drivers only 1 and 4 carry any weight. In fact number 4 is a repeat of number 1. Numbers 2 and 3 lack the constitutional and legislative muscle to enforce. As it stands at the moment government is not permitted to prioritise classes of suppliers for their procurement. The success of the uptake of AgriBEE will therefore depend entirely on government as a consumer in this model. I suspect that this is not enough to sway farmers to implement any form of BEE in their organisations.

However – we are not out of the woods completely. A trend is starting to emerge within government legislative circles where BEE scorecards are going to be required when certain licences are allocated. This has been threatened in the allocation of liquor licences. There is nothing stopping the Department of Water Affairs from insisting on BEE compliance in the allocation of water licences.  In the absence of such a driver it is likely that uptake of AgriBEE is going to be very slow.

A minister who has to be sent back and it's not Rob

The culture of the state’s major departments — and agriculture, forestry and fisheries — is certainly, like that of major corporations, determined by its minister or chairman. In this case it is Tina Joemat-Pettersson, who is in the running for acclamation as the worst minister in the Zuma cabinet. She has outrageously abused expense allowances, inexplicably involved herself in a violent unprotected strike by Cape farm labourers, egging them on to do worse, and generally failed to provide proper guidance to civil servants or develop plans to safeguard South Africa’s food security.

via www.bdlive.co.za

Courtesy of David Gleason. Hey Rob, there is a minister who is threatening your position as the worst minister in South Africa. Surely you're not going to stand for this?