I got a phone call from an irate person the other day about self-rating. She was pissed off that my client had submitted a self-rating certificate and that she would probably have to accept it. You see she had been told by her verification agency that only certificates produced by a verification agency would be accepted. She was doubly pissed off when my client sent her an article I had written for Gauteng Business last year (by the way that influential publication has closed down - a huge loss to its readers, I hope that Ryk and Hendri find themselves on a publication where they can generate the same impact). Her response to this article was "I am telling you EmpowerDex is going to reject that self-rating." Whether they will reject it has yet to be seen.
This is not the first time I have come across this. I play fair with my clients, I have never suggested that a rating certificate, whether done by a verification agency or otherwise should be summarily rejected. And I expect a similar level of tolerance from a verification agency whether they are accredited or not.
Because this whole mess has surfaced again I am going to go through this concept of verification. I'll expand on my last post that dealt with this - How do you rate?.
Let us go back to the codes, specifically Code 000, statement 000 paragraph 10 - Framework for the Accreditation of Verification Agencies. Specifically
10.1 Verification of BEE compliance is encouraged (my emphasis) and to this end, the dti will from time to time issue clear guidelines on the verification process.
This is the only section that deals with verification itself and it uses the word ENCOURAGED. I defy anyone to prove to me that that word indicates any form of prescribed action. In other words - where does it say that the services of a verification agency has to be used?
But this is not enough - and seeing that the person who called me cited EmpowerDex I am going to quote from their founder's very influential book - broad-based BEE - The Complete Guide (co-written with Kyle Harris).
The codes do not take a position on the frequency of verification, which is in line with the decision not to take a position on the necessity for verifying ratings (page 68)
Jack and Harris then put a text box on page 69.
Section 2.6 of Code 000 needs consideration. The codes do not require entities to have a verified BEE score. Section 2.6 provides that an entity not providing evidence or documentation for a BEE initiative may not recognise points for that initiative. ... (t)he Code appears to imply that entities purchasing from suppliers that do not have a verified BEE score must review the supplier's supporting evidence for the BEE score before placing reliance on that score.
Very proper and antiquated English, I say. I disagree with Kyle and Vuyo here. Paragraph 2.6 says "Any representation made by an Entity about its B-BBEE compliance must be supported by suitable evidence or documentation. An Entity that does not provide evidence or documentation supporting any initiative, must not receive any recognition for that initiative." The paragraph says that all points must be supported by evidence, a self-assessment has to follow these rules as well.
And now to deal with my irate caller's specific issue about EmpowerDex potentially rejecting a self-rating certificate.
The Codes place the onus on the procurement officer of each entity. They encourage procurement officers to purchase from entities that can provide a BEE status level supported by a verification certificate. (The rest of the paragraph is some waffle about verification agencies and how procurement agencies should only accept their certificates) - page 80.
Note the use of the words procurement and officer (in that order). The book clearly states that the procurement officer must accept or reject a certificate, not the verification agency. If the agency advises the procurement officer that they will only accept a certain type of certificate then that is technically consulting and a verification agency must verify not consult and vice versa. Let's take a look at the CODE OF CONDUCT, DISCIPLINARY CODE & DISCIPLINARY COMMITTEES.
Section 1.3 (General Principles) is relevant here
Members shall at all times –
1.3.2 act as independent service providers when performing their duties as verification agencies;
1.3.3 ensure that no conflict of interest is created between their activities as verification agencies and any consulting services they may directly or indirectly also provide
1.3.17 a BEE Verification Agency shall not provide BEE verification to an enterprise that has received BEE consulting from that Verification Agency or from any related party. A minimum of two (2) years needs to elapse following the end of such a BEE Consultancy.
The Jack and Harris book is a very detailed piece of work and should be read by everyone in the business. Pages 77 - 81 cover verification. But it is very pro-EmpowerDex and hence will push the verification agency agenda heavily. It should be noted that Jack and Harris recognise that EmpowerDex has decided to encourage (that word again) independent verification alone, and that this is not what the codes or the dti prescribe.
What about Theo?
Theo Lombard is the chairman of ABVA. And it is his responsibility to ensure that the association runs properly and adheres to a certain standard. In this regard Theo, you are failing DISMALLY. If your members (as alleged) are advising their clients that only verified (as verified by a verification agency) scorecards are acceptable then they are not disseminating the correct information. We are left with two conclusions here
- You have no control over your members
- Your body has no clue about the codes and is serving its own interests and not that of the industry or broad-based black economic empowerment
The ball's in your court Theo - fix this up or resign.