This is going to be a long post because it goes through as many of the typos and inconsistencies that I can find in the BEE codes. The ultimate responsibility for this shambles lies with Rob Davies. But he's far too busy mein kampfing Das Kapitaal or the Communist Manifesto and dying his socks red to have bothered to notice that yet again he has signed another piece of rubbish. We therefore have to shift responsibility onto Nomonde Mesatywa who is the BEE chief director at the DTI. These codes are her responsibility so I'm sure all these howlers won't come as a huge surprise to her. If you, the reader, have any more to add please put them in the comments. I was speculating with my good mate Jaap Marais as to whether the DTI had outsourced the drafting of the codes to a third party – if this is the case then we have our suspicions as to who it may be. I do know that a week before they came out the crack BEE team at the DTI hastily tried to prepare a final document for publication. Their work competes with Pedro Carolino's 1883 phrasebook, the only difference being that they started writing it in English.
Here goes – ordered chronologically but with cross-referencing to the various codes and definitions. Page references refer to the actual pages in the document as published by Rob.
Page 3- codes come into operation within 12 months from date of this publication. I think this date is the 11th of October, 2013. Rob did sign the thing on the 2nd of October.
Statement 000
Page 5
1.3 – Indicate the qualifying thresholds for Measured Entity to qualify……….Could an article be missing here? Perhaps there is only one company in South Africa that can comply with these codes and the codes are written for that company.
Page 7
3.3.3.1 ………as per paragraph 3.4.2 above. Firstly if you are on paragraph 3.3 then 3.4 can only ever be below. Secondly if you are going to refer to 3.4.2 then make sure that you put it IN the document. 3.4.2 does not exist, but paragraphs 3.4.3.1.1.1 and 3.4.3.1.1.2 are included immediately after 3.3.3.1. Then to make indexing even more interesting the next paragraph is 3.4. Might I enquire Nomonde, where exactly are 3.4.1 and 3.4.2. And let's not even begin to consider where 3.4.3 is.
Page 9
4.5 and 5.3.3 - ……….. is only required to obtain an sworn affidavit….Where can I get one, I swear I need an one.
5 – please read this carefully ELIGIBILITY AS A QUALIFIFYING SMALL ENTERPRISES. If only they'd configured their spell checker to check UPPERCASE WORDS.
Page 11
7.5 –………..sector specific initiatives that promote access to the economy for Black people. More on this below (very below).
8.1 – you'll see under the Management Control that the total number of points for that element is 15. Ummmm – the code is actually out of 19 and there are no bonus points.
Page 12 – for this cock-up take a look here.
Ownership (I need to state that I've never been interested in ownership so I haven't read it as well as most would)
Page 16 – 2.3 refers to Annexe C. Annexe C is all about ESOPs. This same mistake is made in the definitions on page 101 where they define Net Value. I know that they do actually reference it correctly in Statement 000 (3.3.1.1) and again in paragraph 3.2 under Statement 100, but it really is about the principle
3.7 – and visa versa. Isn't that the thing we South Africans need to go and visit great aunt Toddy in Cambridge. It's that process where they put your balls in a vice and then squeeze you and decide whether you are worthy to visit. Something they only started doing quite recently because home affairs failed to instil any confidence in the UK's immigration department.
Management Control
Page 42
2.2.1 – black executive management measured as a percentage of all executive directors. Now there is a fair measurement. Just in case you think this is a typo, it's not. The same measurement is used for black female executive management under 2.2.2. But I still think it's a typo
Page 43
2.1 – wait a second. Wasn't paragraph 2.1 used to measure black directors in the table?
Page 46 – EAP formula (Formula A)
The formula is very clear – you use the EAP stats to calculate the percentage compliance that goes into formula B. There are two little major issues with this formula
- It doesn't work – and I'll let you figure out why
- It makes no allowance for black females
Zurrisssssssssssssssssssssssssssssssssssssssss.
Page 48
B is the total number of employees with disability……….. Is there only one disability that counts?
Skills Development
Page 50
2.1.3 – Number of black people absorbed by the Measured and Industry Entity. What's an Industry Entity – it's not in the definitions. Anyone wish to hazard a guess, Nomonde do you perhaps know?
Page 51(brackets are my explanations)
- – The compliance targets for 2.1.1.1 (skills development expenditure), 2.1.1.2 (learning programmes), 2.1.2.1 (apprenticeships), 2.1.2.2 (black unemployed people) and 2.1.3 (bonus points) are based on the overall demographic representation………..More on this a little later.
Pages 52 and 53
5.4 – Legitimate training costs such as accommodation, catering and travel…………….cannot exceed more than 15% of the total value of Skills Development Expenditure. Used to be that getting there was half the fun, it seems that it's now only 15% of the fun
5.8 – Training outside the country in line with the Learning Programme Matrix………… is measurable if it meets the SAQA requirement for recognition. I wonder if international training meets the exacting standards that SAQA sets. I somehow think not.
Both of these requirements send an overwhelming message that you need to spend huge amounts on training within the boundaries of South Africa on black people. Can you imagine how this is going to be received by multinationals who send many of their people overseas for training. It's just stupid. Both are stupid. And the stupidest thing is that this barely scratches the barrel when it comes to these codes and stupidity.
Page 57
Under Category G training, learning achievement. What you should achieve is "complete understand of job or work". Do you think that the drafters of these codes derived their skills from informal on-the-job training? If so then it makes sense that category G should never count more than 15% of skills development spend.
Page 58
Formula 1 – the EAP formula is for 2.1.1.1 and 2.1.2 which is explained above. But wait a second, 2.2 above tells us that the EAP formula must be used for learning programmes and the bonus points. Formula 2 clears up a little bit of the mystery. B can be used to calculate the bonus points. As to what the other things that B represents are. Well that's a major mystery.
B is the percentage of spend in the measurement category that are black people. Reinforced with this … measurement category that are black disabled people. Now I really need help Nomonde. How do I make the percentage of spend into that are black people? Spend is not black people – spend is normally ON black people. This DTI-approved on-the-job drafting training is really not working.
And then we are still left with no formula for 2.1.1.2. Let's move onto the next element.
Enterprise and Supplier Development
Page 62
2.2 – This is Supplier Development
2.2 - This is Enterprise Development
Are you seeing the issue here? There is no 2.3. And 2.3 is very important because they refer to it in 3.2.1, 3.6, 4.1.3 and 5.10 (not conclusive).
Page 64 – Empowering Supplier
3.3 paragraph C. At least 25% transformation of raw material/beneficiation………….I can't be sure if there is something wrong with this sentence and perhaps if you are in the transformation of raw material/beneficiation business this makes sense. My question is WHAT? 25% of WHAT? Or transformation of 25% into WHAT? This is not apparent to me at all.
Page 65
3.6 – Procurement of goods and services and any other activities that fall under 2.1 will not qualify for scoring under 2.2 and 2.3 (which doesn't exist) and vice versa. This doesn't make sense. My reading of this says that if you buy from a supplier who is a beneficiary then this buying can't count under supplier development. What then about discounts (9.1.11) or prompt payment (9.1.20)? And I can't figure out the vice versa at all.
3.7 – Beneficiaries of supplier and enterprise development are EMEs or QSEs which are at least 51% black owned or black women owned. This is confirmed on page 97 under the Enterprise Development Contributions definition. But if you go to page 102 "Qualifying Enterprise and Supplier Development Contributions" you are told that these are "contributions targeting EMEs and QSEs which are at least 51% black owned or at least 30% black women owned".
Page 66
4.7 – Measured Entities receive recognition for any ED or Supplier Development contributions that are quantifiable as a monetary value using a Standard Valuation Method. Now go off to page 105 which defines Standard Valuation as a "standard valuation method for an asset, an economic interest, or any other instrument or right relevant to measurement under statement 100……". I think this little addition is as a result of an overzealous drafter who wanted to impress his/her boss. They did it twice (see paragraph 3.1.1 on page 84). Their boss (could be Nomonde) never read the final draft and now will only be impressed because I pointed it out. (As it turns out - this Standard Valuation Method thing in this context was in the 2007 codes. Another opportunity to fix up a mistake in the last codes has past us by).
4.1.2 – "are encouraged to develop and implemented"
Page 68
5.9 – "Trade Commision's: any commission……..". It's difficult to explain exactly what is meant here but it could be "Of a trade commission".
Page 70 (this is courtesy of Gerhardus)
Paragraph 6.5.3 "The exclusion of imports under 6.5.2 are subject to them having…….." Who is THEM exactly? Is this the manufacturer of the imported product, or is it the importer?
Socio-economic development
There was a major outcry when Rob presented his revised SED code. So he withdrew it. But he didn't withdraw all of it. You may recall at the beginning of this post I told you about paragraph 7.5 of Statement 000 (page 11). Go to page 85 paragraph 3.2.1 "in favour of beneficiaries …..with the specific objective of facilitating income generating activities"….Page 104 (like page 11) tells us that "the objective of SED contributions is the promotion of sustainable access for the beneficiaries to the economy". Isn't this an amendment? Amendments need to be submitted for comment - take a look at section 9(5) of the BEE Act (as amended).
Beyond a joke. A joke at our expense. I bet the dti are pissing themselves laughing because once again they've completely stumped us
These are but a few of the howlers and inconsistencies. Nomonde please accept this piece of useful career advice. Don't mention that you were responsible for the drafting, ignoring of comments and ultimate gazetting of these codes on your CV. Prospective employers might not look favourably on this accolade.
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