My comments to the DTI regarding the bill

There are only seven days left in which to comment. My comments are below but I would like you to send me your comments and I'll post them up on a separate page. If you don't have any comments then why not send the DTI my comments, the more we object to this bill the better. Their email addresses are here.

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Thank you for inviting public comment on the BEE bill. Please consider my comments below.

May I preface my comments with the fact that I believe that the bill in its current form is deeply flawed and that it is unnecessary to go the lengths that the bill proposes to implement BEE. The bill appears to be working on the premise that BEE is not working and attempts to over-regulate those entities who find themselves in a position to implement the codes of good practice. More research needs to go into the actual implementation across the economy to determine the success or failure of broad-based black economic empowerment. The act should not have to regulate to same extent that it intends to.

Paragraph 6 – Composition of the BEE Council

The majority of companies that need to implement BEE are not owned by black people. There are numerous challenges that face these businesses that the current BEE Council has demonstrated little or no understanding of. If BEE is to be adequately implemented there must be a requirement for these businesses to be represented on the council and this should be more than one person. As it stands the composition of the BEE Council is not representative of the economy and cannot be expected to provide any assistance for those businesses.

The council appears to be made up of mostly political appointees – and as a result is unlikely to garner any respect within the business community.

Section 12 A - Transformation policy

This requirement will add more complexity to an already complex process. It allows organs of state to insist on compliance with a code of good practice that might be completely different to the generic codes of good practice. It would then become a requirement that a supplier to this organ of state might need to implement a variety of, possibly conflicting, programmes in their business so that they can be scored on it. Besides the cost implications of this section, it will result in complete confusion as to what is required to comply.

Section 21: "all spheres of government, public entities, and organs of state must report on their compliance with B-BBEE in their audited annual financial statements..."

This conflicts with the PFMA Section 89:

"Functions of Board.—(1) The Accounting Standards Board (ASB) must—

1. set standards of generally recognised accounting practice as required by section 216 (1) (a) of the Constitution, for the annual financial statements of—
   1. departments;
   2. public entities;
   3. constitutional institutions;
   4. municipalities and boards, commissions, companies, corporations, funds or other entities under the ownership control of a municipality; and
   5. Parliament and the provincial legislatures;

      (Id est words every entity that is legally bound by the PPPFA and BEE Act)

(b) prepare and publish directives and guidelines concerning the standards set in terms of paragraph (a);

(c) recommend to the Minister effective dates of implementation of these standards for the different categories of institutions to which these standards apply; and

(d) perform any other function incidental to advancing financial reporting in the public sector.

(2) In setting standards the Board must take into account all relevant factors, including—

1. best accounting practices, both locally and internationally; and
2. the capacity of the relevant institutions to comply with the standards.

(3) The Board may set different standards for different categories of institutions to which these standards apply.

(4) The standards set by the Board must promote transparency in and effective management of revenue, expenditure, assets and liabilities of the institutions to which these standards apply."

To the best of my knowledge the DTI may not amend the PFMA and as such that section is unlawful

Section 23 suggests that the BEE Act takes precedence over other legislation like the PPPFA/PFMA/MFMA etc. Whilst not a constitutional expert by any means, my reading of the constitution suggests that this is problematicl and will lock the bill in litigation for many years to come.

The DTI is now required to show some exceptional leadership in the implementation of BEE, something that I believe the DTI has not done up until now. By making the process and requirements so draconian the bill has the potential to cause the whole of BEE to fall down and has huge implications for the DTI's reputation.

I respectfully submit that this bill should be rejected in its entirety and that the DTI conducts proper research into what the challenges are that the economy faces and not to hide behind convenient justifications like fronting and racism. Once this process has been completed a new bill and possibly new codes of good practice could be drafted that will effect the changes that the government strives to achieve.

Comments

[Robin]

Our economy is almost 80% white owned and is the cause of most of the problems.. like unemployment, prejudice and discrimination. If you thought you can change white racist perception (white solipsism) you don't understand psychology and a vital ingredient in decision and judgement. BEE is the right mechanism for change. We exclude the poor and uneducated because they do not have the capacity to fulfil strategic BEE roles in business. White business will always look after their kind like black government. Corruption strengthens white perception of controlling the economy they stole

[Paul Janisch]

Strangely enough I agree with you (in part). BEE is a useful mechanism to correct the wrongs of the past. The issue is that the people who create the policy have no idea how to go about it and so they legislate to force an issue.

Your convenient racism comment is now tired. In fact so tired that I put it to you that it is your extreme racism that will not allow you to accept the fact that BEE is operating on three cylinders because of the ANC-led government.