Oh there is descent – but what to do

Bolshie Bob can thank his lucky stars that his job allows him to grow such a great beard. Such fashionable facial hair permits our minister of trade and industry to hide his red face when either he or his minions publish something or utter something that is just not defensible. I would imagine his skin burns hot under those bristles, and all the time too.

My broader question is how does Rob save face when it comes to most of his programmes/policies/delusions? How do we let him down gently so that he doesn't look like a patsy who ran riot (like Mbeki did – but he wasn't that much of a patsy) at Zoomer's pleasure. I have no interest in the black industrialist programme. My only wish is that it works and that it doesn't become yet another policy that results in "state capture" – the new cool word. But I do have a great interest in Rob's revised codes.

Are they with us for good. I hope not, they really seem to be a cause of a great deal of annoyance and irritation. Clever companies will put off measuring themselves against these codes for the next 8 months or so (you can if you measure a period that ended before 30 April 2015 – if you don't understand how then ask me and I'll tell you). I have heard that the new BEE Commissioner (a Ms Zodwa Ntuli) is now keen to get the new codes out there and implemented and see REAL BROAD-BASED TRANSFORMATION. Well Zodwa I have some interesting news for you, the revised codes will have the opposite effect. When scores drop so will your BEE programme and with it your job. You can check fronting until the bovines return from their lowing in the pasture, but if you have a policy that has been rejected by the greater business community then it is kaput. To quote Beatle bassist Paul McCartney, "you can't reheat a soufflé". And this BEE soufflé is being propped up with ice-cream sticks at the moment (tenderpreneur supplied of course).

What should Rob then do?

The first should do now (now that horse has properly bolted) is build a trust relationship with those who actually have to implement these new codes. He could have done so two years ago but he is dogmatically blind and that was the old new South Africa, where King Zoomer ran the country (into the ground but we knew that then anyway). He could have listened to business instead of barging on. So Zodwa if you want your revised codes to work then please listen to my pleas.

1. Empowering supplier. What is this? It's a ridiculous requirement that will never be taken seriously. Remove it, why would you want to prejudice those companies from implementing your revised scorecard by disqualifying them as empowering suppliers in the first place? This is a critical point of failure. Remove it
2. Discounting via priority elements. Why have you taken the extreme stick approach? Your revised scorecard is hard enough to implement and when a company has made the best effort to get onto the scorecard and then you boot them off it? The consequences of this is that companies will probably stop making ED/SD and especially SED contributions. Regarding the latter, those five points for SED do determine the level that a company will get to. They will make the contribution because of that. Your revised level grades are too large for one, and secondly a company might get demoted to a level 9 because of the priority elements. Get rid of the priority elements. If SED contributions stop you will have more than just service delivery riots on your hands, there'll be hunger riots too.
3. Raising the bar of entry. Why 40 points on a scorecard that makes getting 30 points hard? And then the levels go up in 15 point increments up until a level 4 (which hovers between a level 3 and 2 under the old codes). With such large gaps companies are not going to improve a level each year, it may take years. If you look at the banking sector how they got to a level 2 in 5 years this is doable. Why would companies want to improve their points and still not reach a higher level? There's no incentive. Go back to the old levels
4. And now onto the scorecard itself
   1. Ownership – leave it as it is
   2. Management (incorporating employment equity). The EAP targets (economically active population) are so draconian that they aren't even worth considering. It took me an afternoon to figure out what a client's EE score would look like. What you have done, Bolshie Bob, is effectively marginalise Coloureds and Indians. Indians can contribute less than a point (much less actually) for senior to junior management. Why would you want to hire them in the first place? They are in effect white, and Coloureds are not much different. Get rid of the EAP
   3. Skills Development. 6% of payroll to be spent on the training of effectively African people. In a country that desperately needs to be productive, when are these people going to be at work? And that's only if you are willing to cough up 6% of payroll. This is ridiculous. Got back to 3% or payroll and provide facilities for companies to develop internal training programmes that deliver results for the company as well as the employee. That's how most people learn. The skills development code is all about unit standards and the like. It's not sustainable in its current guise
   4. ED/SD and procurement. Leave the procurement targets as they are in the revised codes but loosen the measurement requirements for procurement. How can you expect a company to go its municipality and get a breakdown of their bill with the BEE rating of each supplier to that municipality. They have no control over who gets awarded the tender. This is just one of the ridiculous requirements. You will have never seen fronting like you will see now if this is kept as a priority element. The targets for black and black women owned companies are stiff but give it time and they will be achieved. And then supplier development. Too limited. Why not on both sides of the supply chain. As it is an ED beneficiary just needs to get on the supplier list and you are good to go. Sell one pencil and they are on and a supplier. If you don't look at this then you will find that every small business is suddenly 51% black owned and you won't be able to police it. Think OUTA here.
   5. SED – no changes

I don't think it's equitable and fair that you have decided to exclude black owned businesses from contributing to BEE because they turnover less than R50m. The strategy document speaks of inclusivity. We are in a deep hole here, Zoomer has put us here along with his friends and a little help from a depressed world economic climate. Every company that is not an EME must contribute.

I know that you don't care, but section 217 of the constitution is going to hit you very hard. Just wait until state procurement becomes unaffordable because black owned companies are knowingly fronting for white ones. As Leon Louw once said to me, every cent the government spends on empowerment is taken from some budget that should benefit the people. If you want to build the country then start listening to those companies that are trying to get by whilst having to negotiate your red tape.

Related articles

Who stands to benefit from the revised BEE codes

BEE code change shocks industry

Section 9 of the BEE Act and the proposed QSE Codes (inter alia)