The news that the DTI planned to bring verifications in house was sent to me yesterday. I immediately phoned Gerhardus Burger (who is no longer at IRBA) and we had a little chuckle. The problem I had yesterday was that I didn't know who actually said that they would can verification agencies. Lo and behold BDLive reported the following this morning
THE government will take control of the black economic empowerment (BEE) verification process to drive the creation of 100 "black industrialists" over the next three years.
Verification agencies will be downgraded to become "empowerment advisers" so that the private sector does not issue verification certificates to itself, the Department of Trade and Industry said on Thursday.
The department is aiming to address frustrations over the perceived slow pace of black economic empowerment (BEE), especially business ownership, and to correct empowerment policies seen to benefit "the few" and spur "rent-seeking".
The department would stimulate the creation of "black billionaires and millionaires" across all sectors of the economy, Deputy Trade and Industry Minister Mzwandile Masina told the first Black Industrialists’ Stakeholder Engagement forum at the Industrial Development Corporation’s (IDC’s) offices in Sandton on Thursday.
The department’s director-general Lionel October told the forum that BEE verification had become a "fly-by-night" business. The department was establishing a Broad-based BEE Commission to speed up empowerment processes in line with "instructions received from the executive".
Mr Masina, former national convener of the African National Congress Youth League, said BEE verification agencies undermined the government’s development goals.
It would seem that both Lionel and Masina said it. That's one for the books. If you read the whole article then you'll see that this is just political posturing - my experience of Lionel is that he probably believes what he says, but this Masina-vent is talking not as a minister but as an ANC propagandist, and if you consider that he comes from the youth league then sense, logic and forethought are completely irrelevant. Viz
Mr Masina criticised the Treasury for being out of step with the process of empowerment. "National Treasury is not in the space of transformation but in the space of the public purse — this needs to change. We will continue to pursue National Treasury and the government to make sure transformation takes place," he said.
Black industrialists had to do business with the rest of Africa, and take part in the entire productive value chain, Mr Masina said. "We want set asides for black people — we see it in a lot of countries, why not South Africa?"
Here is the deputy minister criticising Treasury who control the PPPFA. We assume that Nene is not going to budge on the PPPFA just as Pravin didn't, the DTI would know this. So now they are purporting to be champions of elite black industrialists. I think he was talking to an audience that wanted to hear what he had to say. Good DTI bad Treasury
Let us assume that they actually go ahead and do this, forcing about 300 verification agencies to become "empowerment advisers" and not "fly by night" operators (with a substantial reduction in jobs). They would need to justify this in terms of section 22 of our Constitution (that the government rarely consults when it legislates).
Every citizen has the right to choose their trade, occupation or profession freely. The practice of a trade, occupation or profession may be regulated by law.
What Masina is actually doing is arbitrarily denying a few thousand people the right to work in a profession/occupation they have chosen. I am almost sure that you cannot terminate this with the stroke of a pen. I am even more convinced that if they do then there will be a legal challenge.
The second part of my scenario suggests that they succeed under section 22 and go ahead with the DeTrImental Verification Agency. This is what we know we can expect.
- Sheer incompetence. I'd love to say that it's beyond anything you can imagine, but the DTI continuously plumbs depths of incompetence so we can definitely imagine it
- Under staffing (coupled with incompetence)
- Yearlong backlogs. Maybe that's too short. Think CIPC which is adequately staffed
- More incompetence
- Longer backlogs
- Very few certificates being issued
- Rampant corruption
- Even more incompetence
- Incompetent corruption
- More backlogs
Eventually business is going to have to continue without BEE certificates because they just can't be issued.
I don't think we should take Masina's comments seriously. It would however be nice if he could speak as minister and not as an ANC cadre, but that is wishful thinking.
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