ABVA Breakfast

About two weeks ago I got a phone call from Kevin Lester telling me about an ABVA breakfast.  So I mustered up the courage to cough up R150 and I arrived at the breakfast yesterday.  It wasn't the best attended event but there were a bunch of BEE industry people that I knew or had heard of like Tony Balshaw, Norman Hjelm and the prince of Tshwane - Louis McLaren.

I arrived a little late and missed most of Theo's presentation.  But I caught enough to argue with him on that thorny issue of self-assessment.  I need to reiterate why this issue interests me so - and it has a lot to do with what I do as a consultant.  I help companies rate themselves.  And my clients are very happy with the service I provide them.  This rating is the culmination of the compliance consulting.  There are times when I bring in BEE-Matrix to confirm my assessment, but more often than not my clients are very happy with the certificates we produce.

It follows therefore that by ABVA decreeing that only verified certificates are acceptable it tends to mess with my business.  So I will go to extraordinary lengths to prove to the ABVAakies that they do not have the mandate to decree.

During my argument with Theo I got the distinct impression that ABVA's decision to reject non-independent verifications was taken from SANAS R47-01 document (there seems to be an updated one R47-02).  He argued that the word "verification" can only mean an independently assessed certificate and that this definition was found in R47.  A verification agency could therefore reject a certificate and then insist on the "sufficient evidence" that code 000, paragraph talks about.   Theo's presentation (page 17) states that one of the duties of a verification agency is to "check evidence to substantiate unverified BEE status etc."  You will notice on page 6 that one of the documents that ABVA bases its principles on is the Guidance Notes for Verification Agencies.  The same document that the DTI refuse to endorse.

I was sitting next  to Sibonelo Radebe of the FM and I said to him that it appears as if the  R47 document conflicts with codes.  What does a good blogger then do - he goes off and reads the necessary documents.  And I read both of the R47 documents, and was pleasantly surprised to see that they were only 20 odd pages long and that 02 is an update of 01.

And this is what I learned:

Verification

There is no definition of the words verify or verification.  The nearest word I can find is ‘evaluation’  which means to assess, verify and validate the BEE status of measured entities.

Score so far - Theo 0, Paul 1 (it is a points game isn't it).

Self-serving

This allegation has long been leveled at ABVA.  And it makes sense.  I mean I am serving my own interests by writing on this blog.  But if ABVA want to push their own agenda (and they are doing this and then some) then they should at least make sure that they have the facts and the mandate to do this.

Now take a look at this (from SANAS R47-02)

9.1.3 Principles for inspiring confidence include:
(a) Impartiality
....a BEE Verification Agency has to be able to demonstrate that its decisions are based on objective evidence and that its decisions have not been improperly influenced by other interests or by other parties.

Threats to impartiality include:
Self-interest threats – threats that arise from a person or enterprise acting in their own interest, for example financial self-interest

Let us "unpack" (doesn't that phrase irritate the hell out of you - it does me).  The point about corroborating evidence was kicked to death yesterday.  Theo couched it in a ball of "best interests of the client" when he said that the verification agency would have to charge the "measured entity" (Andile Tlhoaéle loved that phrase and even used it when he wasn't answering a question he was being asked) to verify that supplier.  Come on Theo - it is patently clear that you want to create more work for your constituents when you say that the verification agency will only accept a IVC (independent verification certificate, I'm sick of writing this out in full).

Score so far - Theo 0, Paul 2 (I'm the judge here and I'll award the points in a Mugabe-ist fashion if I choose)

Prescriptive nature of R47

9.1.1 The principles outlined in this document are fundamental and are not prescriptive requirements. This document does not give specific requirements for all the situations that can occur; however, these principles should be applied as guidance for decisions that may need to be made for unanticipated situations.

Need I say more - no more scoring of points.

And finally

The FSC has a little issue on its hands.  The code of ethics that R47 preaches in only applicable to the dti's codes of good practice (gazetted under section 9)

6. THE ROLE OF BEE VERIFICATION AGENCIES
6.1 Assess, verify and validate BEE information for decision-making BEE Verification Agencies should assess, verify and validate both disclosed and undisclosed BEE-related information on measured entities. The verification thereof should be based on the principles contained in the Broad-Based BEE Codes of Good Practice, as well as the relevant gazetted industry charters, published and accepted as a Sector Code of Good Practice on Broad-Based BEE (Section 9 of the Act).

They cannot refer to R47 when a verification agency behaves in an odd fashion and cannot lay a complaint in terms of section 20 of 47-02.

And absolutely finally

Brigitte please comment on the blog.  I would love this blog to become the centre of BEE debate.

Comments

[brigitte]

Hi Paul, great to meet with you at the breakfast. The saga of self-assessment vs. verified BEE Certificates continues to rage. However, I see here that you assist companies with self-assessments, in which case it is no longer a self-assessment but a consultant-assessment exercise. I do love my analogies so here goes: When learning to drive, one goes to a driving school who train and teach you the tricks of staying alive on the roads, when they feel that you are at a level of being competent, they book for the test at the licensing authorities so that you can get your official license (verified report of your capacity to drive). Now I see your role as one of the driving instructor for your clients where you assist them to stay on the BEE road and understand the road signs and rules of the scorecard to acheive a respectable score at the end, but you as the consultant/driving instructor have been working with the client and even though the driving instructor may feel that s/he knows the capacity of the driver and therefore would believe the learner is ready to hit the roads, at the end of the day an independent body needs to make that decision, not the learner driver themself or the consultant that helped them learn how to drive. That is why there is a Verification Industry.

I know you will probably tear that to pieces and I will enjoy your response. However, as mentioned at the ABVA breakfast, come and join us, with your knowledge and skills in the area of BEE, your debates on the ABVA website would be appreciated.

[Paul Janisch]

That is a very tempting offer. Thank you for your comments, Brigitte, they are really appreciated. I could take your analogy a little further along the line. As a consultant I am a person who does teach people to drive and once I have done that it is then up to them to ensure that they drive properly and obey the rules that taxis do not seem to concerned about.

My argument here strikes a little rough patch here because as a consultant I am not allowed to award a driving license. But then the regulations don't provide a verification agency with that right either. And I think that should be the point. Until there is some sort of a directive from the DTI as to whether a verification certificate is the only method of verification then both methods will be acceptable.

I will register on the ABVA site and join the forum. Thank you for the suggestion.