What is it with these FMCG companies and their ridiculous BEE demands. This time it's Nestlé, unlike dapper Dave and Tiger Brands - I actually did do some work with Nestlé a few years ago - this makes for an interesting story that I should tell one day.
I get an email from a client in a small town in South Africa. "Nestlé are making the most ridiculous demands on EMEs," says small town client. "Surely not Nestlé," quoth I. "Afterall, I did some work with them." You see Nestlé want a BEE certificate from ALL their suppliers. I stress all because this includes EMEs. Check it out.
We were a little confused so we checked with Padney Moeng, Nestlé's Strategic Preferential Procurement Specialist who stated something along the lines of BEE certificates have more information than accountants certificates. Which is odd because the accountant's letter that my client sent them contained almost all this information (other than the value-adding supplier information).
This is just hard-arsed ridiculousness. I have never come across any company that insists on BEE certificates for EMEs ever - and this includes of disempoweredEx's clients.
A little bit more on the impracticality of this proposition. Here you have a company (Nestlé) that operates in many small areas of South Africa, this includes (to the best of my knowledge) a farming ED project in Harrismith. They obviously have many small suppliers in those areas - both black and white. How easy is it for these regional companies to get to an ABVA member? Pretty damn hard I would say. There are currently 57 ABVA members of which 33 are based in Gauteng. There are two in the Free State (Welkom and Bloem), 1 in Limpopo, 2 in Mpumalanga - are you getting what I am saying.
I know that PWC has branches in almost every town that has an AVBOB or Pep Stores - but who is to say that they are able to produce a BEE certificate better than any other regional accountant.
Now Padney and Derryn let us really look at the consequences of your policy.
- You are putting local accounting practices out of a revenue stream - so much for supporting regional companies.
- Having said that, code 000, paragraph 4.5 says "sufficient evidence of qualification as an Exempted Micro-Enterprise is an auditor's certificate or similar certificate issued by an accounting officer or verification agency." The bold text says that the accounting officer of a company who is most likely to be an employee in a small company is also allowed to make such a declaration. In these very tight (and going to get tighter) economic times the cost of a verification from an agency might not be feasible.
- You are making it harder for companies, especially those in the outlying areas to do business with you. In fact I would suggest you are making it damn-near impossible. How are you going to explain to a local black supplier who is totally dependent on your business that they now need to go and get a BEE certificate from an ABVA member - he's going to think you are nuts.
- This is a blog - but you must consider that someone might circulate it to a regional newspaper claiming that Nestlé makes it almost impossible to do business with them which is tantamount to not supporting local businesses - can you imagine the negative publicity?
What percentage of your total elligible procurement do EMEs constitute. I put it to you - very little. Why make it so difficult?
If there were enough regionally-based verification agencies to handle this deluded request I would probably still moan but I would concede that it is not unreasonable.
Theophilus, I thought I had taught you this stuff.
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