Anyone who has ever done any military service would be very familiar with this old adage. However this is not a military post, and so any references to cadres, cadre deployment or Zumorons are purely non-military. Complying with BEE under the BEE Act has always been voluntary. The current codes (gazette number 29617) have this to say about the application of the Codes
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;
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.
If you don't want to do business with any public entity or don't wish to seek to establish your own B-BBEE compliance the BEE codes are not for you.
Rob's new daft (sic) – gazette number 35754. Has amended this section with
3.1 The following entities are measurable under the Codes;
3.1.1 all organs of state and public entities
3.1.3 all measured entities that undertake any economic activity with all organs 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.
The voluntariness under 3.1.4 remains although I do not know what the difference between "economic activity" and "business" is. Could it mean that if you buy services from an organ of state etc like electricity then you have to produce a BEE scorecard? It's a Rob mystery.
Returning to the voluntary nature of BEE compliance. What Rob's new codes have not considered is that BEE's success is purely as a result of private sector adoption which was always voluntary. It's only very recently that the state has accepted BEE scorecards in their procurement (about 10 months by my reckoning) and the parastatals have been very inconsistent in their application of empowerment. And they are still inconsistent. With all the corruption cases coming out of the woodwork (love the pun) it's now very clear that empowerment credentials have very little bearing on winning tenders or the allocation of preference points.
BEE's success therefore hinges on the private sector's continuing adoption. And this is where Rob has missed the boat completely. What he has done is make compliance so ridiculously hard that within a short space of time (I would hazard a guess two years or so) the scores will be so pathetic that a level nine or lower score will become the norm. This is exacerbated by the fact that Rob, in his wisdom, has decided that only value-adding suppliers can qualify as suppliers under preferential procurement. Soon it will be a handful of EMEs complying with BEE who will put off soon enough because their BEE scorecard provides no advantage because nobody else can comply. And don't think that commerce will come to a crashing halt because BEE scorecards are not forthcoming. Government cannot legally deny you the right to supply them because you don't comply with their empowerment criteria. The private sector will behave the same way – if they need something and none of their suppliers are able to provide BEE scorecards they'll buy it anyway. And as the number of BEE compliant companies dwindle so will the preferential procurement score of large corporates diminish. And BEE will die a natural death.
How then do you resuscitate a policy that has died due to lack of interest? You don't. At that point you've lost the buy-in of the private sector and there is no way that you'll win them over ever again.
It's quite likely that neither Rob nor his useless advisors considered this eventuality. Perhaps those companies who have complied with BEE up until now regret volunteering to implement it – Rob's gazette is effectively the thanks they got for doing so.
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