Paul Janisch

Dear Cyril now that you are chief of that rogue organisation

Dear Cyril Ramaphosa (notice the uppercase - there are very few aNc [one third uppercase] politicians that I refer to in the uppercase)

We've not met before although I have met a few of the people at your foundation and I am really impressed with the work that it does.  My name is Paul Janisch and I manage this piece of digital real estate.  To the best of my knowledge it is the only blog that focuses on matters of black economic empowerment.  If it isn't the only one then it is most certainly the oldest one with over 1000 posts on this subject and a few others on my children.  I suppose you could say that it is a whining blog - moaning about rob davies (bolshie bob as I call him - again in lowercase), his semi-competent department, his unreasonable BEE codes and how he has been actively involved in destroying what economy we have with red tape.

I know that you have your work cut out for you.  Getting rid of that moron zuma is probably your biggest priority and if the press are anything to go by jessie, maboozer and uys are going to make this very difficult for you.  Once you've overcome that hurdle, which most South Africans think is a non-negotiable, then perhaps we can look at whatever is left of the economy and how BEE plays a role in it.

I see that Mike Brown has recommended that you look at evkom and other disastrous SOEs first - that'll take you to the elections in 2078.  But I am the eternal optimist and I am hoping that you will be able to spend a little bit of time considering my proposal whilst fighting the aNc, rating agencies, the opposition, the temptations of higher office, the guptas making overtures and toilet breaks.  Here is my list of things to consider.

Black economic empowerment is an economic reality

A little obvious but not something that the last president of the anc understood.  I'll go a step further - we cannot have such huge numbers of people with little hope of ever getting beyond their anc-endorsed misery (the lowercase refers to zuma-era anc, your aNc has an uppercase N, more letters will be used in uppercase as you prove yourself).

I would suggest that it is vital to the survival of this economy.  More empowered people means more jobs and more money to buy those things that foreigners want us to buy.

Don't put a communist in charge of the one department that is supposed to transform the economy

bolshie bob was a dyed-in-the-wool red.  He had no clue when it came to promoting trade and industry, he's not supposed to (not that zuma understood that, but my how zuma was good at managing his member - 28 children and counting and he's barely started).  How can a person who is fundamentally anti-capitalist be promoting capitalism. It boggles the mind - he was useless.  I initially thought that he was the most useless minister in zuma's cabinet but des and enawz showed us how low you can go.  Thank god for butterbeelee - she took incompetence to special levels making bob one of the most competent.  Alas these levels of competence delivered nothing.  When you get a moment and perhaps a bottle of whiskey (I prefer Black Bush myself) attempt to read what he calls the BEE codes of good practice.

My suggestion is that BEE should go to Treasury, this of course pre-supposes that abagig is moved to the ministry of churches and other religious reflection.  

Concentrate on the basics.  Get the basics right

The education system is broken.  It is churning out people with little hope of being able to read, let alone become employed.  Don't be like bob and think that if every corporate throws millions at the skills development of unemployable black people that the problem will resolve itself - they won't and it won't.  Accept that your party has made a mistake here and find ways of working with the private sector to resolve this problem - try to avoid the zuma-approved method of thanking corporates for their donations by reminding that they are white monopoly capitalists.

Find incentives for corporates to actively work with emerging businesses, both black and white, to move beyond the subsistence level.  bob seems to think that 15 points on a shitty scorecard is incentive enough - it's not.

Do something about these revised BEE codes

bob and his ilk got it wrong.  They aren't working. 

• Firstly  - they are ridiculously complex.  It's one thing to have complexity but another thing to have complexity that the department that is tasked to manage them cannot understand.
• Secondly - they are too expensive to implement.  No company is going to hand your foundation a cheque for 6% of payroll even though we all know that the beneficiaries are given the best possible opportunities through your initiatives.  They can't afford it because there is no economy to support it.
• Thirdly - the introduction of priority elements (negative marking) is the greatest disincentive for any company to implement your codes.  Surely (oops I'm starting to sound like Stephen Grootes) you would want companies to improve their score year on year not get worse.  I'm not sure how well you know the BEE codes but they succeed because of the procurement element. At the moment companies are doing OK under procurement because there are large number of old scorecards doing the rounds.  By this time next year scores will have dropped so dramatically that the largest corporates are going to drop a level. Once this happens the BEE programme as we know it will start to collapse - or perhaps that larger corporates will be forced to start encouraging fronting on a grand scale to retain their procurement score.  Most likely they will stop buying from legitimate (all gupta businesses are not legitimate) businesses and these businesses will have to layoff staff.  I suspect that this is what bob and co actually intended - not very good for an economy that is broken.
• Perhaps you could consider removing the priority elements and going back to the old recognition levels - you know where a level 8 was thirty points.

 People from SANAS need to understand a LOT about business

As it turns out, they know so little it's patently frustrating.  It's not SANAS that gets the brunt of this ignorance, it's the verification agencies (even the useless ones - more on this next month).  SANAS wants documents - we give them documents.  Where documents aren't available SANAS insists on independent verification that these documents are not available.  Sometimes this is doable - but often the conversation goes along these lines.

Verification Agency (VA) - we need a shareholders' agreement.

Paul Janisch (PJ) - they don't have one

VA - then we'll need an auditor's letter confirming that there is no shareholders' agreement.

PJ - you do know that a shareholders' agreement is not a requirement under the Companies Act

VA - we need an auditor's letter

PJ - (bemused) you do know that a shareholders' agreement is a legal document.  It's got nothing to with an auditor

VA - (frustrated) give us the auditor's letter or SANAS will take away our fucking licence

PJ - but this is like telling a person that they need a driver's licence to ride a bicycle.

VA - SANAS will take away our fucking licence. Give us our fucking letter

 So I gave them this , and also note it wasn't them that used the fucks.

I hope you can see how ludicrous this is Cyril.  The verification process now takes about six weeks.  It's laborious and unpleasant for all parties involved.  And this is entirely because of SANAS.  

The BEE Commissioner should worry less about fronting and do her job

Which is to provide guidance.   These codes are so difficult to understand and implement that if the Commission just did 5% of her job properly then it would make the implementation of these codes a little more apparent.

 __________________________________________________________________________

I probably have a lot more to write but you have more on your plate than this.  We are expecting that when you become president of the country that you will appoint people to your cabinet that are able to read more than bank notes and proof of payment notifications.  Perhaps someone from your faction will read this.  I'd be more than happy to come and talk to you about it - just not in Cape Town.

All the best - Mr Cyril Ramaphosa.  By the way, my father Peter sends his regards, he tells me he met you a few times.

As we sit poised hoping that zuma and ilk no longer occupy their office next year

To put the blame zuma solely for the mess that is South Africa is too simplistic, but we can blame him for pretty much 99% of the mess.  He is a despicable specimen.  Such a strange man, one who firmly believes that he is well within his rights to pilfer and plunder and his cronies are just as entitled, or to quote Ivor Chipkin (loosely) "they view this plunder as a noble thing".  This is a bed that the anc made for ALL OF US TO LIE IN.  

Here we are waiting until Sunday to see if zuma's ex cracks the nod or the lesser of two evils, Cyril, makes the cut.  There have been a few articles in the Daily Maverick this morning on this weekend.  Grootes, one journalist who I think has credibility across the political spectrum even though he's white, wrote a story this morning on the potential chaos that could erupt if zuma's ex becomes president.

A victory by Dlamini Zuma could also serve as a signal for many in the middle classes to engage in politics. Here, as in many other countries, middle-class people tend not to march. White South Africans, who generally don’t have a culture of marching, have tended to stay away from getting their feet dirty; some see attending a book launch as a supreme form of political protest. That could change. This middle-class group of people may not have the numbers to change the results of elections, but they do have significant resources, and may be exercised enough to use them.

But the problems that a Dlamini Zuma-led ANC may face in middle-class society may be nothing compared to what will happen in Parliament. The opposition parties would not be able to contain their joy upon her victory. Every opportunity in Parliament will be used. Malema will be uncontrollable, the DA will be more disruptive, and it will be, as they say, “lit”.

However, the real problems would be in the ANC’s caucus. At the moment the body that includes people who voted against Jacob Zuma is hanging together, just. Possibly the only reason Zuma stayed in office was because ANC MPs were told that they could remove him at the ANC’s conference without splitting the party. With that option no longer open, there would be no reason for them to stick to party discipline. Many tactics can be used. Instead of outright public betrayal, ANC MPs can simply be “sick” when legislation has to be passed, denying the party a quorum. Confidence votes would be excruciating for the party’s managers, and of course the opposition would call them every week. The most powerful person in the country would suddenly be the Speaker, Baleka Mbete, who could decide whether a vote should be in secret or not. And even if she kept that vote open, you may find ANC MPs angry enough to vote against Zuma, or Dlamini Zuma, whatever the working relationship the pair might opt for.

Either way, the situation would certainly be almost impossible to manage.

In the far out areas, it is entirely possible that some communities, who already question the legitimacy of the ANC and government, will do this more intensely. This means more symbols of the state could be in danger. For these communities, these include clinics, police stations and schools. Zuma already tends to avoid these protest situations; a Dlamini Zuma-led ANC would surely find them even harder to manage.

If there's one thing about Grootes' writing that is now starting to grate, it's his overuse of the word "surely". Other than that I read his opinions religiously.

There there was an opinion by Bonang Mohale, who's the CEO of Business Leadership SA, speaking about how business must participate in national renewal. 

Business is society at work and to denigrate business is to denigrate a large part of the population. That is why a key pillar of our strategy is to promote the value of business as a national asset – not as an article of faith, but because it is business that will deliver the growth and transformation, without which the country has no future worth thinking of.

 In short, we need a growing economy that creates jobs, fuels transformation and poverty reduction and hastens the transition to a more normalised society.

As we have also made clear, business cannot do this work alone. We need a supportive government and a supportive policy backdrop – something sorely lacking in recent years. That is why we are so focused on the critical ANC conference that takes place in the coming days.

The leadership decisions taken there will be a critical determinant in the future trajectory of the country, in determining whether business is allowed to deliver its potential, or whether we are going to see a continuation of recent years where a combination of policy incompetence and corruption have helped derail the economy.

Whoever that leader is, business stands ready to roll up its sleeves and participate, at short notice, in an urgent programme of national renewal. That willingness and ability is in no way diminished by events at MultiChoice and Steinhoff.

Businesses make mistakes and make bad judgements. It is part of the corporate condition. As appropriate, they must be held accountable. But we must not throw out the baby with the bathwater. You cannot be pro-poor and anti-business. The schadenfreude at business’s discomfort over these episodes raises questions about whether these people seriously want to address the country’s pressing social challenges.

I have worked with a large number of companies, many small, some massive.  They all want to get on with business.  I have yet to meet a single corporate that doesn't understand the importance of transformation in the economy.  Every time this excuse for a government changes the rules they attempt to adapt.  But the government now needs to walk across to them and talk to them.  The trust deficit is skewed towards government's forked tongue.  

Here's to a Cyril victory on Sunday and a massive cleanup of everything zuma immediately thereafter. I don't expect this weekend to be pretty.

Whilst you wait for this rather poignant moment you could while away 24 minutes watching this very significant interview with Chuck D and Tom Morello - everything anti-trump is good in my book.

Monday's post will no doubt be expletive laden - out of relief or sheer anger.

 

 

The Construction Code - el revisedo

Here it is. Took a while to find it, the dti haven't put it or the revised FSC up on their page yet.

The horse driver who thought he could - BEE Commission content

The committees (Parliament’s Standing Committee on Finance and the Portfolio on Trade and Industry) recommend that the industry be compelled to provide the necessary information about their transformation and BEE compliance to the FSC Council, the newly-established BEE Commission and any other relevant state structure.

In cracking the whip, the committee has also recommended sanctions be imposed for non-compliance to BEE under the Financial Sector Charter and the BEE Generic Codes. Transformation and BEE compliance is a choice for companies and widely viewed as the right thing to do and there are no punitive measures for non-compliance.

The BEE Commission is expected to develop a system of fines for non-compliance and present a policy on this by June 2018.

As per Moneyweb

As if doing business in this country wasn't hard enough.  I find this type of article just ridiculous and disturbing.  This is not to detract from the journalist (Ray Mahlaka).  Ray is a great journalist, one whose articles carry a lot of weight.  If I'm reading Ray correctly, the completely incompetent dti (read anc government) is proposing a fines' system for non-compliance of the BEE codes, specifically the FSC. It's too early to know what "non-compliance" is.  But I think we can guess.  This is not a bunch of legislators who understand much about an economy, non-compliance will in all likelihood be not meeting subminima under the codes.  I can't imagine that they are so devoid of grounding that they may impose fines for not meeting a certain level - but then again I can.

I hope the dear reader can see what's going on here.  This committee is going to find a way to make sure that the BEE codes are now mandatory. Id est

In cracking the whip, the committee has also recommended sanctions be imposed for non-compliance to BEE under the Financial Sector Charter and the BEE Generic Codes. Transformation and BEE compliance is a choice for companies and widely viewed as the right thing to do and there are no punitive measures for non-compliance.

The BEE Commission is expected to develop a system of fines for non-compliance and present a policy on this by June 2018.

Once again the awesome awdoz is involved.  Not having ever met her, and I have my doubts as to whether I ever will, I can only speculate that this is what she wants.  And I am willing to bet my prize piece of South African suspended soil that she is going to push it through and South African corporates will do nothing about it.

There are constitutional issues at play here.  A rudimentary reading of the codes shows that the following are subject to these unworkable wonders of contemporary lawmaking

 The following Entities are measurable under the Codes:

3.1.1 all Organs of State and Public Entities;

3.1.2 all Measured Entities that undertake any economic activity with all Organs of State and Public Entities;

3.1.3 any other Measured Entity that undertakes any economic activity, whether direct or indirect, with any other Measured Entity that is subject to measurement under paragraph 3.1.1 to 3.1.2 and which is seeking to establish its own B-BBEE compliance.

 This is where the "right thing to do" is applicable.  It's only 3.1.1 entities that are subject to the drivel that is the codes, not that they pay too much attention to it - the guptas get the business with the shittiest BEE performance.  What awdoz is going to do, mkhwebane-style, is make the codes mandatory

She can't - but if we don't stop it she will.  She might not get away with it legally, she might just post ugly posts on her website about how corporates are going to be investigated and in that way get it through.

Corporate South Africa, I know you won't say I didn't warn you.  But I'm warning you, this is coming and once it does you'll look like a bunch of anti-transformation wmc patsies.  And then it will be too late.