Paul Janisch

BusinessDay - JACOB DLAMINI: Manyi and his ilk bring SA nothing but shame

Manyi — who has yet to respond satisfactorily to claims by one of the Scandinavian governments that when he was director- general of labour he tried to moonlight for his own pocket by soliciting business from said Scandinavians — is what I have called in the past a "professional black". He is among those for whom blackness is a job description. He is not a black professional in the sense that one is a black engineer or a black accountant. He is, simply, a professional black. His profession is his blackness. He trades on his skin colour. He thrives on the high melanin content of his epidermis. That is why he insists on staying on as president of the Black Management Forum (BMF). He needs the forum like fish need water. He needs the forum to pursue his self- interested agenda as a professional black. He cannot survive otherwise

via www.businessday.co.za

And with no political background. What I don't understand is, if the BMF is almost completely ignored by business and hence irrelevant, what is it that Manyi brings to Zuma? All I can see is trouble

BEE hierarchy - ABVampire content

Perhaps this is not very clear, and as a responsible BEE consultant/expert/commentator (self-professed), it is my duty to explain this hierarchy.

Number 1 - BEE Act

The BEE Act reigns supreme.  All codes and notices etc derive their legitimacy from the act.  It would seem that the act comes from section 9 (2) - as read with section 36, and section 217 of the constitution.  9 (2) says

 (2) 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. 

Number 2 - the DTI

The DTI is responsible for drafting, proof reading, spell checking, arithmetic checking, approving and gazetting the codes/charters.  

Number 3 - SANAS (for now)

I say for now because Rob has sent out a notice that the Independent Regulatory Board for Auditors (IRBA) might become another SANAS.  But that's down the line, right now verification agencies are accredited and evaluated on a yearly basis by SANAS.  For simplicity's sake - these are the licence licensers.

Number 4 - verification agencies/ABVAledictators

These are the referees.  They award points based on information.  They have been given a licence to do this by SANAS.  This licence is not specifically a requirement but we've all learned that there's no point in arguing this pointless point.  Every year a VA has to beg SANAS to extend their licence to verify.  SANAS has the most ridiculous set of rules that they apply - and every VA is at their mercy, ask BEE Rating Solutions.

Number 5 - consultants and the clients

That's right - we are at the absolute bottom.  It doesn't get lower than this, our job is simply to interpret the codes and provide the necessary justification to the verification agencies so that a BEE score is awarded.  We are but players in this game - with a right to refer decisions to the referee for review (the verification agent).

A bit of history

The relationship between consultants and ABVA has not been a smooth one.   In the past ABVA exercised some sort of ius vitae necisque over the industry.  They were calling the shots, rejecting certificates, pronouncing when a certificate would be valid, calling more shots, assuming humongous fascististic tendencies and then calling even more shots.  Strangely enough it was Rob who came to their rescue by publishing notice 810 - which effectively stated that only accredited verification agencies could issue valid certificates (yes I know that it talks back to the act - but I wasn't going to be bothered debating this not schlepping off to the high court to get it turned over).  This wasn't without its ABVAricose vein hiccups but all was resolved when the period that non-accredited certificates would be valid until expired.

It's actually a relief now - I think things are very clear.  I consult and give  the information to a verification agency and try to persuade the agency to accept my arguments.  I no longer view either ABVA or verification agencies as dof or a threat and  have learned to play by their rules - because they are the ones who award the points.  It's me who could lose the client.

Here endeth the lesson.

 

very seriously in imparting this piece of 

TESEF is going to be discussed on Monday by the Namibian Politburo

Also on the agenda of the meeting, New Era is informed, are the contentious issues of the Transformational Economic and Social Empowerment Framework (TESEF), the yet-to-be-implemented initiative that could replace the Black Economic Empowerment (BEE) initiative in the future.

President Hifikepunye Pohamba last year aired concerns about BEE, which he described as discriminatory.
His remarks sparked wide condemnation from some quarters in the party and the general black business community. The issue is now set to enjoy another round of debate by the Politburo.

via www.newera.com.na

That would be Monday the 7th of March, 2011.

Chris van Wyk on sector charters

This is an email I received from Chris van Wyk of AQRate, which I requested as a response to my post on sector charters.  It seems that he is writing in his AQRate capacity and not that of an ABVA Board member. You'll notice that he's coming from a procedural perspective where he argues that because the minister did not gazette the words "the TRANSPORT SUB-SECTOR CODES are binding on all stakeholders operating in the TRANSPORT Sector within which the Sub-Sector Codes apply" in the 9(5) gazetting this paragraph cannot have any legal effect.  His argument does not concur with Levenstein on the invalidity of the certificate in question.   Chris's comments are italicised below - I thought it prudent to include his disclaimer.

Herewith my response to SANAS:

I take note of the e-mail from Keith Levenstein. I am not aware of the circumstances that lead to the issuing of the certificate. I do however attach for your attention an opinion I did quite a while back on the applicability of the sector Codes. AQRate is accredited to conduct verifications on all sector codes and the matter is neither here nor there for us as we do not stand to lose business for lack of accreditation. The opinion that follows is merely my considered opinion on the entire matter as a legal professional.

The Codes clearly state that a sector code and the generic codes have equal status. Although the notice to the sector codes contains a paragraph to the effect that all business in the particular sector need to apply this sector code – this provision is not contained in the sector code itself but in a paragraph just above the Minister's signature on the Notice to the Code. It was not gazetted with the 9(5) notices to these sector codes and can therefore not be applicable.

Given the status of the Codes and its provision that a sector code and the generic codes have equal status – any attempt to give the sector code more status is in our view ultra vires.

AQRate advises all clients in such a sector to have the sector Codes verification done as opposed to Generic Codes verification. But in theory issuing a generic codes certificate to an entity in such a sector is not unlawful as is suggested by Keith Levenstein.

Even if my opinion, as highlighted above, were disregarded one cannot argue that because a particular business falls within a sector governed by a sector code, that it is unlawful for that business to have itself verified in terms of any other general Code of Good Practice or any other sector Codes for that matter, as long as the certificate in question clearly states the Code in terms of which the verification was done. At best the recipient of that certificate, be it a client of the measured entity or a tender board, is at liberty, as they are in any event, to reject the particular certificate and request a certificate be furnished to them in terms of the applicable sector code.

The entire BEE programme is voluntary and the fact that a particular company for example falls within the transport sector does not mean that it is obliged to have itself measured in terms of the transport sector or any sector for that matter. When it elects to have itself measured in terms of a Code other than the transport sector code, neither it or its verification agency will be acting unlawfully in conducting such a verification, as long as they clearly declare on the face of the certificate the Code in terms of which the verification was conducted. If they don't, the furnishing of such a certificate could be regarded as a deliberate attempt to mislead and misrepresent the measured entity's BEE status.

Off course, it is incumbent upon the verification agency in question to disclose its scope of accreditation to its client and also to advise appropriately. I don't know the facts around the particular case well enough to say whether the particular verification agency was at fault with this or not.

Kind Regards

Chris van Wyk

CEO

AQRate (Pty) Ltd / Tel: 021 914 9451 / www.aQrate.co.za

This e-mail and attachments relating thereto, is intended for the abovementioned recipient/s. If you have received this e-mail in error, kindly notify the sender and delete it immediately as it contains information relating to the official business of AQRate, which is confidential, legally privileged and proprietary to AQRate. AQRate does not own and/or endorse any other content. The views and opinions expressed in this e-mail are those of the sender unless clearly stated as being those of AQRate.

-----------------------------------------------------------------------------------------------------------------

I doubt whether I am only person who knows that Keith Levenstein's opinions tend to veer on the side of the sensational without a proper consideration for sense, fact or logic. The email he sent to SANAS and the verification agency shows a complete lack of understanding of a subject that he has professed himself to be an expert in. In fact the numerous postings on his website and newsletters (which for some or other reason I am now receiving) are sometimes so ridiculous that you cannot but laugh. The problem is these newsletters are being circulated and people read them.  

The real question here is – can a person who sends such damning emails be taken seriously by the authorities? I have my grave doubts that they do.

The race is on - does anyone really need to win?

Not to flog a dead horse - but this is how race was determined in the heady days of apartheid.  This was taken from Constitionally Speaking  - which everyone should subscribe to.

 The Population Registration Act 30 of 1950 required every South African to be classified in terms of race and these apartheid race categories included “african”, “white”, “coloured”, “other coloured” or “indian”.
The Act was amended often to try and make it more difficult to reclassify anyone as “white”, but the definitions used at one time included the following:
Although this Act was finally abolished in 1991,

• A white person is one who is in appearance obviously white — and not generally accepted as Coloured – or who is generally accepted as White – and is not obviously Non-White, provided that a person shall not be classified as a White person if one of his natural parents has been classified as a Coloured person or a Bantu…”
• “A Bantu is a person who is, or is generally accepted as, a member of any aboriginal race or tribe of Africa…”
• “A Coloured is a person who is not a White person or a Bantu…”

The Act was finally abolished in 1991.

And seeing that race is now VERY relevant we can only hope that level headed people like Trevor Manuel are able to keep our heads down and focus on the ultimate goal - and that has to be empowerment of the people.  This is an excerpt from Trevor's letter to jungle jim

As a consequence of your behaviour, people like me  ‐ in the ANC and in government, are being asked to explain what was in the mind of the drafters of the amendments to the Employment Equity Act. We were present at the point of the debate of the first Employment Equity Bill; we expressed a complete comfort with the assignment of 'designated groups' to include “black people” which means "Africans, Coloureds and Indians." because it served as a representation of our constitutionality and as the fruits of our struggle. When in your capacity as Chairperson of the Employment Equity Commission you made strange utterances that sought to carve away at the basic premise of the Employment Equity Act, we should have been more vigilant. The just and constitutionally obligated provisions for redress are not and can never be an excuse to perpetuate racism.  

The race is on - does anyone really need to win?

Not to flog a dead horse - but this is how race was determined in the heady days of apartheid.  This was taken from Constitionally Speaking  - which everyone should subscribe to.

 The Population Registration Act 30 of 1950 required every South African to be classified in terms of race and these apartheid race categories included “african”, “white”, “coloured”, “other coloured” or “indian”.
The Act was amended often to try and make it more difficult to reclassify anyone as “white”, but the definitions used at one time included the following:
Although this Act was finally abolished in 1991,

• A white person is one who is in appearance obviously white — and not generally accepted as Coloured – or who is generally accepted as White – and is not obviously Non-White, provided that a person shall not be classified as a White person if one of his natural parents has been classified as a Coloured person or a Bantu…”
• “A Bantu is a person who is, or is generally accepted as, a member of any aboriginal race or tribe of Africa…”
• “A Coloured is a person who is not a White person or a Bantu…”

The Act was finally abolished in 1991.

And seeing that race is now VERY relevant we can only hope that level headed people like Trevor Manuel are able to keep our heads down and focus on the ultimate goal - and that has to be empowerment of the people.  This is an excerpt from Trevor's letter to jungle jim

As a consequence of your behaviour, people like me  ‐ in the ANC and in government, are being asked to explain what was in the mind of the drafters of the amendments to the Employment Equity Act. We were present at the point of the debate of the first Employment Equity Bill; we expressed a complete comfort with the assignment of 'designated groups' to include “black people” which means "Africans, Coloureds and Indians." because it served as a representation of our constitutionality and as the fruits of our struggle. When in your capacity as Chairperson of the Employment Equity Commission you made strange utterances that sought to carve away at the basic premise of the Employment Equity Act, we should have been more vigilant. The just and constitutionally obligated provisions for redress are not and can never be an excuse to perpetuate racism.  

PPPFA regulations approved yesterday - Statement on the Cabinet meeting held on 02 March 2011

Cabinet approved that the revised Preferential Procurement Regulations, after legal refinement, be promulgated in terms of section 5(1) of the Preferential Procurement Policy Framework Act (PPPFA) as soon as possible and on a date to be determined by the Minister of Finance. The contents of the revised regulations will be discussed with the Parliamentary Standing Committee on Finance and Appropriations as well as the National Economic, Development and Labour Council (NEDLAC).

via www.buanews.gov.za

When does a sector charter apply?

What do you do when you receive an email written by a man of great stature and genius.  So intimidating is his knowledge that I feel humbled to have been sent this email by a concerned third party.  I have edited it a bit to protect the innocent.

From: Keith Levenstein 

Subject:  invalid BEE certificate

I have spoken to some of the other staff at your company about this invalid certificate.

COMPANY A is a transport company, and should have been assessed using the transport sector and associated sub-sector codes.

I am extremely concerned that verification agencies continue to issue certificates based on the codes that they have accreditation for, without due regard for the sector code that the client falls into.   There is absolutely no discretion on the part of the measured entity, nor on the verification agency to use the wrong codes just because you have not yet received an extension of scope. You should have informed the measured entity of your inability to perform the requested verification.

The certificate is therefore invalid, and continued deliberate and public usage of that certificate by the measured entity will constitute deliberate misrepresentation of their BEE position. 

Please ensure that you immediately withdraw that certificate by informing the measured entity and ensuring that they withdraw the certificate from their web site, and they inform all their clients who rely on that certificate. You should inform all verification agencies that if they come across this certificate it is invalid and cannot be used in the procurement calculation.

How can I, a mere mortal comment on this short piece of brilliance.  If Mr Levenstein says this then we can be sure that he understands the law and is totally correct in making such a pronouncement - my goodness, this man is more than a genius, why he's a concerned citizen/good samaritan too.

So with this knowledge weighing heavily on me I will attempt to show that perhaps Mr Levenstein is just a tad misguided and a total  ignoramus (as I have suggested on this blog before).

What exactly is the status of charters and when is a company compelled to follow them?

We have to look at the primary legislation here which is the B-BBEE Act.  The Act actually clearly states when a code of good practice (as gazetted under section 9 (1)) must be considered.  This is contained in section 10 of the Act.

10. Every organ of state and public entity must take into account and, as far as is reasonably possible, apply any relevant code of good practice issued in terms of this Act in—

(a) determining qualification criteria for the issuing of licences, concessions or other authorisations in terms of any law;

(b) developing and implementing a preferential procurement policy;

(c) determining qualification criteria for the sale of state-owned enterprises; and

(d) developing criteria for entering into partnerships with the private sector.

The two highlighted "entities" (for want of a better word) are defined in section 1 of the Act viz.

"organ of state" means—

(a) a national or provincial department as defined in the Public Finance Management Act, 1999 (Act No. 1 of 1999);

(b) a municipality as contemplated in the Constitution;

(c) Parliament;

(d) a provincial legislature; and

(e) a constitutional institution listed in Schedule 1 to the Public Finance Management Act, 1999 (Act No. 1 of 1999);

"public entity" means a public entity listed in Schedule 2 or 3 to the Public Finance Management Act, 1999 (Act No. 1 of 1999);

Seeing that the Act is silent about other entities that don't fall under this definition they MUST be excluded from section 10.

Now let's move onto the DTI"s generic codes.  They've taken this one step further in code 000, statement 000, paragraph 3 

3.1 The following entities are measurable under the Codes;

3.1.1 all public entities listed in schedule 2 or schedule 3 (Parts A and C) of the Public Finance Management Act;

3.1.2 any public entity listed in schedule 3 (Parts B and D) which are trading entities which undertake any business with any organ of state, public entity or any other Enterprise;and

3.1.3 any enterprise that undertakes any business with any organ of state or public entity:

3.1.4 any other enterprise that undertakes any business, whether director indirect, with any entity that is subject to measurement under paragraph 3.1.1 to 3.1.3 and which is seeking to establish its own B-BBEE compliance.

A cursory reading of this would show that 3.1.4 makes it voluntary for those entities not doing business with an organ of state or any public entity.  The voluntariness of BEE is not going to be discussed, it is now common cause that it is particularly difficult to do business without a BEE certificate.

Legally then, if you are not doing business with those two entities then you can produce a BEE scorecard using any code (although I would recommend you use the DTI's generic codes as your default one) and a company should have no reason to reject it.

BUT HOLD ON - WHY DOES THE TRANSPORT SECTOR CODE SAY....

...the TRANSPORT SUB-SECTOR CODES are binding on all stakeholders operating in the TRANSPORT Sector within which the Sub-Sector Codes apply.

This is because it applies to section 10 of the Act.

WHAT THEN TO DO?

It doesn't take a great deal of forethought or insight to come to this conclusion so I think Mr Levenstein was talking a little but out of turn.  So out of turn that I can't but not ask the question "who the hell does he think he is, and what legal right does he have to send such devoid-of-fact emails?"

My recommendation to the verification agency concerned is that they send him a very stern letter of a legal nature requesting him to retract this email and issue a public apology.  I would even consider some other form of legal action because this email has certainly placed a question mark on that verification agency's integrity.    

As far as the client is concerned - this email has also placed a fair amount of doubt about their own commitment to BEE.  There would have to be commercial considerations to this.

I would NOT retract the verification certificate as Mr Levenstein was insistent that they do, and if Mr Levenstein is aggrieved or affronted he too may make use of a competent legal practitioner and perhaps a court date.