Rob Davies has been doing some reading and is now talking about empowerment (after a year's silence). The good news is that he is most concerned important things like ownership – which the mining sector is most concerned about. Rob is worried about things like enterprise development and skills development. It shouldn't be such a surprise – he's just launched the IPAP which is very dependent on both. I had to laugh at a quote from Engineering News Online
Speaking at a media conference in Pretoria, Davies said that even though most share transactions included a BEE component, 75% of companies in the private sector were still not fully compliant. Davies told Engineering News Online that this was mainly owing to companies using BEE scorecards as "tick-boxes", and not as a "dynamic tool" to empower and train people from ground level upwards.
Why the hell is he so surprised by this? When you look at the scorecard all you see is something that says you need to shell out a bunch of cash for points. After all the codes are all about quantity and not quality. When you tell a company that they have to spend money on the following each year, they are never going to "embrace it".
An empowerment shopping list
Description | Annual contribution | Once off |
Sale of shares (likely financed by the company) | √ | |
Black independent non-executive directors' fees | √ | |
Skills development spend on black people (3%) | √ | |
Procurement analysis (id est begging for scorecards) | √ | |
Enterprise development (3% of NPAT) | √ | |
Enterprise development (1% of NPAT) | √ | |
Verification | √ |
In order to get what he wants, Rob reckons he's going to use Section 10 of the BEE Act
"Government will be looking at article 10, where we, as organs of the State, will assist with the broader implementation of BEE codes. We may consider forming partnerships with companies within the private sector to promote further enterprise and skills development in accordance with the codes."
Does this mean that the DTI is going to start making it a requirement to get a licence to conduct any form of business activity? I sincerely hope not.
Give us tax breaks
Rob, it is the private sector that has made the biggest strides in empowerment. They've been doing it for years and they are starting to get good at it. The government and especially the parastatals have been dismal at it – take a look at the mess with the Captain Barnard case and ESKOM's procurement policies. Stop using the stick – it's hard enough doing business in this country as it is. Give us tax breaks, especially for effective skills development, enterprise development and SED projects.
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