Paul Janisch

A bit more on the Yes4Youth programme

It doesn't seem that registration with the Yes4Youth programme is a requirement for compliance.  My reading of the information contained on their website , specifically this document tells me that it's another programme that corporates can get involved in.  It's not THE YES programme.  Its success is dependent on corporates paying a subscription and then contributing a percentage of NPAT to the programme. I would imagine that that NPAT contribution is used for enterprise and supplier development.

I have my reservations about this.  It just doesn't seem to have the will or desire to succeed.  We do however have a programme that we have launched.  The only thing we need to finalise is how the tax incentives are going to work.  In the absence of tax incentives I can't see the YES taking off at all.  We are all jaded now - I like what Cyril's doing with corruption but he needs to demonstrate a little more commitment to this.

I retract my statement in my last YES post (the definitive YES outline I must stress).  You don't need to register on the Yes4Youth website to get started.  Talk to us first.  

Beauty in the snow

Completely unrelated to the nature of this blog but I couldn't not post it

 

 

 

 

 

 

 

 

 

It reminds me of the cover of a Stephen Stills album from the early 70s

Youth Employment Service defined and sorted

My wife has correctly pointed out that my cynicism is not in anyone's best interests.  I'll see if I can temper it.

As you might or might not know - our man in Meintjies Street published the YES code recently. He was under a fair amount of pressure to get this done - and again I take heart that national issues took priority here.  The minister only published the YES, the other proposed amendments remain on ice.

As we have to come to expect (oops the cynicism creeps back) from the dti - it's big on lofty ideas but short on ANY detail.  The purpose of this blog post is to clear up the lack of information and tell you how to go about qualifying for it in a series of short steps.

1) What do you need to do to qualify

• You need to achieve the 40% sub-minimum under all three priority elements if you are a large enterprise.  QSEs need to achieve the 40% sub-minimum for ownership and one other priority element OR 
• You need to achieve an average of 50% of the points under the priority elements for large, QSEs must make 40%
• You need to maintain or improve your BEE level year on year

2) What are the targets

The attached spreadsheet attempts to help you with your targets.  The targets for large companies are the following - the higher of  

• 1.5% of the Y.E.S Measured Entity’s headcount in the preceding year; OR
• 1.5% of the Y.E.S Measured Entity’s average Net Profit After Tax (NPAT) from South African operations in the immediately preceding three years, converted to a headcount number by dividing that NPAT number by R55,000; OR
• a target as determined in Table 1 - Annexure A.

 QSEs follow the table in Annexure B

 3) Getting started

• You need to go to the Yes4Youth website and register.  I don't know what happens after you register but I'm sure you'll get an email from them.  I am willing to bet that the verification agencies will want proof of registration.
• You need to create NEW jobs for NEW people.  You can't put existing people in new jobs.  On this point - it is likely that there will be some sort of an employee tax incentive (ETI) offered.  The full ETI benefit can only be derived from new employment.
• If you can't create new jobs then you can place these people with other EMEs or QSEs.  The YES code does not appear to say that these EMEs or QSEs need to be black-owned
• The positions need to be sponsored for a minimum of 12 months.
• The code does not require the use of the EAP when it comes to the youth employed.  They must be between 18 and 35 and meet the definition of “Black People” as defined in the Broad-Based Black Economic Empowerment Act 53 of 2003 as amended by Act 46 of 2013

4) What do you get if you achieve the targets

Here's the incentive

B-BBEE RECOGNITION
Achieve Y.E.S Target and 2.5 % Absorption	Move 1 B-BBEE Recognition Level up on the Scorecard
Achieve 1.5 x Y.E.S Target and 5% Absorption	Move 1 B-BBEE Recognition Level up on the Scorecard + 3 Bonus Points to the overall Scorecard
Double Y.E.S Target and 5 % Absorption	Move 2 B-BBEE Recognition Levels up on the Scorecard

5) When can you derive the benefit?

The code is silent here.  I don't like using logic when it comes to the dti but in the absence of any clarity - which will never be forthcoming from the dti or the BEE Commissioner, I'll revert to logic.

The promotion is based on the employment of people for 12 months.  When you see the term "absorption" it then seems that we are talking about a person being offered a permanent contract after 12 months.  

Absorption

We are used to this term under skills - which could mean an extension of paying for studies or offering a fixed term contract after the completion of studies/learnership.  The amendments talk of full time employment.  However the YES absorption must be different.  It can't be that you have to absorb 2.5% of the people on the YES programme. I think that the percentage absorption is linked to the total number of full time staff.  If you have 100 staff then you would absorb 5 of them and double the YES target and you go up two levels.

 6) What's missing

 A lot of official clarity - but I think this blog post will clear that up.  We need to know what the tax incentives are and the minimum wage requirements.

Already we have a plan to make use of the ETI to bring the costs of the programme right down and we have a company that is ready to start hiring on your behalf.  We're ready to begin.

 

A little more on the Swissport ACSA issue

Swissport's most recent BEE certificate (which expired in May) shows that they are a level 4 with 49% black ownership.  As I wrote yesterday, the ACSA tender stipulates that bidders commit to 51% black ownership at the first anniversary of the licence agreement, which must be maintained for the duration of the licence.

These are but some of the issues that many companies face when it comes to state procurement. I have noticed that a number of tenders have come out saying that if you aren't a certain level then don't bother.  Take a look here.  The bid document states

* Bids received from bidders who have a Level 4 to 8 B-BBEE contributor status and non-compliant contributor, will not be considered for evaluation and will be eliminated from further evaluation.

I don't know whether this is legal - I've lost touch with the PPPFA. But it begs the question - what is the point?  What's the point of going through the pain of "transformation" when all they want is Transformayshin.    

I think it's about time that the likes of BUSA and BLSA start asking questions about Transformayshin vs transformation.  Does the government want jobs.  If so then where does Transformayshin fit into this process - from my desk it is patently apparent that it doesn't fit it.

Failing that you get a rebellion.  A client of mine sent me this article.   Its three years old but she tells me that it carries an incredible amount of weight in the farming community. The author concludes with 

Politicians will keep on promoting their hare-brained schemes, and organised agriculture will keep on negotiating. But until such time as a reasonably detailed road map for future land reform and BEE is finalised, the prudent strategy for individual farmers is to ignore BEE and spend time and money on improving conditions for their own workers.

This was before malema started with his expropriation rubbish.  All the client wanted was affidavits from honey suppliers and they were refusing because of this article.  This is the kind of rebellion that carries an immense amount of weight. Can you imagine if the petroleum sector said - no, we're not doing it.  The government would withdraw their licences and the economy would grind to a halt.  

Unlikely to happen - but the more Cyril dithers the greater the possibility. 

 

 

Transformayshin (1) and racism - almost inseparable

Transformayshin (trænz fɔr maj ʃi jɪn) (n).  An act that purports to change the state of a situation but gets bogged down in political ideology and results in no change whatsoever (in spite of the private sector's best intentions).  

What a strange country South Africa is. We need racism (white racism) so that the free press (mostly white journalists) can report on something that is not the disaster that is the aNc government. Racists are naturally anti-transformation.  Anti-Transformayshin is more extreme - racists use objective criteria to object to crony capitalism and illegal activities that are the cornerstone of Transformayshin.  Transformayshin is different to transformation - the latter seeks a change in a state that should benefit a wide number of people.  Transformayshin is a term used when "counter-revolutionary forces" are opposed to a system that is at the same time illegal and arbitrary.  Think about (I know what you got up to this weekend) dud miyeni.  Our dud is one hell of a player.  She was on 702 once stating that she would never allow Transformayshin to be compromised (by the way - I have stopped listening to 702 completely and will continue not listening whilst they have that bigot youseewhatadoosiam mcmoron on their station).  You have to read this because it's really entertaining.

Miyeni says she's being targeted because she wants a lot more than four percent of SAA's R24 billion procurement spend to go to 50 percent black-owned companies.

"Things were quite smooth, but all of a sudden, because we're focusing on transformation I'm attacked left right and centre. I'm probably paying a price for being black, or being a woman - I don't know."

Miyeni says she can take the pain.

"When you lead you have to take the heat, that's what I am doing and I am doing it for South Africa."

Don't you love the less than subtle racism jab.  Transformayshin cannot operate without an allegation of racism. 

As it turns out dud had very little interest in transformation - she wanted to divert the public's attention from the zuma-endorsed Transformayshin policy of looting a lot of money from SAA (and the economy).  If you are inclined then read this Lily Gosam story to understand how myopic dud's transformation agenda was - it was more Transformayshin than anything else.  

That's in the name of looting.  Then you get Transformayshin which is used as a tool against those who complain about policy uncertainty and unfairness.  Once again we return to the air industry.  A spat has developed between Swissport and the Airports Company of South Africa.  The desperate Swissport has gone to court to ask for clarity over whether ACSA can now insist that baggage handlers be 51% black owned.  

An international spat is brewing over the country’s black economic empowerment laws as Swiss-owned baggage handler Swissport takes on the state-owned Airports Company South Africa (Acsa) over black shareholding requirements for a ground-handling tender.

Swissport CEO Peter Kohl, in an affidavit filed with the South Gauteng High Court last month, requested that the court review, correct or set aside Acsa’s invitation for contractor proposals for licences to provide ground-handling services at the company’s airports, which include OR Tambo and Cape Town international airports.

Kohl said a black ownership clause in the invitation was one of the main issues Swissport had with the procurement process. The clause stipulates that bidders commit to 51% black ownership at the first anniversary of the licence agreement, which must be maintained for the duration of the licence.

He said Swissport’s parent company would prefer not to increase the company’s broad-based black economic empowerment (B-BBEE) ownership to 51%, as per the invitation’s requirement, because the requirement had been unlawfully imposed.

Swissport operates in SA with 51% majority holding, with the balance of the shares held by empowerment partner Clidet. While it waits for the outcome of the court process, Swissport has submitted a bid according to the black ownership clause.

“Acsa has presented Swissport with little choice: if Swissport refrains from bidding or if Swissport submits a noncompliant bid then its business operations in SA will come to an end,” Kohl said.

The mere fact that Swissport went to court has raised the hackles of the Transformayshinists.  "This is transformation we are talking about," the Transformayshinists scream.  Airports Company South Africa (Acsa) chief executive officer (CEO) Bongani Maseko told PowerFM that the company has to be seen to be playing a role in the transformation process.

He says Swissport does not seem to be part of the South African agenda as a trading partner of more 20 years who is not willing to walk the transformation journey with Acsa. He concluded by saying that Acas’s trading partners must respect the company’s transformation imperatives.

The issue that the recipients of state arbitrariness struggle with is not transformation per se.  It's the policy uncertainty.  And this is a feature of this government.  They use platitudes like - we've given you 24 years to transform, or as these journalists so wrote

All suppliers have had perhaps as many as 24 years to come to terms with what real transformation means

But have you given 24 years of policies that actually spell out what transformation means.  You've been very clear about Transformayshin.  But no one knows what transformation means.  This simple headline above means that 51% black ownership is REAL transformation.  Really?  What about performance against a code or a charter? But we have a history here.  Does anyone recall jungle jim's response to Reuel Khoza six years ago when Khoza (a black man) had the gall to tell the zuma government that Nedbank had no faith in them.  

Transformayshin is the enemy of transformation.  It is a narrow agenda that would rather kill an economy than look at objective measures to ensure that the economy and people benefit.  It thrives on policy uncertainty and lives for crony capitalism.  Anti-Transformayshinists could well be the saviour of economic and social transformation in this country.

However this sentiment comes from an anti-Transformayshinist - who by his race and gender must also be anti-transformation.

 

This could be the most significant article written this year - trunceformaysheeyin be damned

The Daily Maverick is becoming the most valuable source of fine journalism in this country.  There is nothing that comes close to it.  By the way they are looking for financial support, if you are so inclined you can read more about this here.

Back to the Maverick.  Dirk de Vos wrote a fantastic article over the weekend.  I'm not a Marxist fan nor that familiar with his theories, but I do know that that inept commie bolshie bob is a massive officianado.  de Vos sets up his argument thus

In general, socialists continue to favour top-down direct interventions by the state preferably supported by “evidence based” research. When decision-making follows a process of identifying a problem with the objective of solving it by reviewing evidence and evaluating options, what we mostly get instead is some predetermined solution with evidence selected to favour the pre-selected solution. That type of policy making process is faulty because we cannot know the full ambit of what the problem is all about or that a whole number of factors will change once the policy is known. Goodhart’s Law shows the dynamics at play: Individuals who are aware of a system of rewards and punishments will optimise their actions within this system to achieve their own best outcome.

In other words policy makers come up with a solution to a problem without spending much time figuring out whether they actually know how to solve that problem. de Vos turns his attention to black economic empowerment and its raison d'etre

A good example of a failing policy is Broad-Based Black Empowerment (BEE) legislation and its regulations. The problem of lack of participation of black people in the formal economy and racial inequality is the problem to solve.

And in one sentence he sums up the fuck up that is best described as bob's folly

What we get is a a complex scheme of BEE regulation and arcane rules.

 He could stop there, the points is made, but he's far too an analytical journalist.

The only interesting thing about BEE regulation is about they reveal about what the drafters of the rules think private firms work. Well, they don’t work in the way the BEE codes suggest they do. They work in all sorts of different ways. Still, the BEE regulations provide a system of rewards and punishments. They are also thoroughly gamed: they get manipulated by a range of actors from failing white-owned companies, specialist BEE advisers (I'm one you know - in the business of making white people look black) , funders, crony capitalists and those with a talent for manipulating state procurement budgets.

I think he must have been reading this blog.   All this bullshit about voting rights and board meetings and the like - these are done by large companies.  Since when does the average smallish to large business actually sit down and conduct a board meeting?   bolshie bob obviously knows the answer.  I once heard that idiot being interviewed on the radio and telling all those who care to hear his deluded voice that he will insist that CEOs start getting involved in the operations of small black businesses.  Huh? - what would a CEO or even a high end employee be able to tell a small business about running their business.  It was Anglo, in their submission of comments on the revised codes who asked the very pertinent question.  What do we know about running a supplier's business? We are miners - we mine shit and then send it off.  But we could start working on companies upstream - we could advise them on the best ways to manage the raw materials we produce.  No! says bolshie bob.  It's all about suppliers. What fucking drivel.  Back to de Vos

Sadly, the response to the unsatisfactory outcome is to swap out some of the original rules, sub-rules and sub-sub rules with a whole raft of new rules that are equally misguided and arguably worse because they are combined with additional rules addressing issues of enforcement.

And so we bring in the awesome awdoz and SANAS.  SANAS is so concerned about process and paperwork that if has failed to take into account that all companies are doing is producing documentation to support stuff.  The actual benefit that is being derived is not measured.  de Vos absolutely hits it here.

Black empowerment won’t be advanced by better enforcement of BEE regulations. The whole scheme of BEE is wrong-headed.

And he correctly concludes with

Of course, the original problem, namely the exclusion of the black majority and inequality has not gone away and, in some respects, the original problem has got worse.

I can only hope that Cyril is reading this.  I have lamented often on this blog as to why have they made the codes so difficult to understand and even harder to measure.  I think I know one of the underlying reasons and this has to do with lobby groups like the broke black business council - who are now returning to BUSA (apparently Cyril wants business to speak with one voice).  I suspect that these lobby groups are attempting to use apartheid-style policy making where you make a certain class of people adhere to "arcane" rules and exempt others - thereby making it easier for that exempt class to gain access to the lucrative government business (a broke government I need to stress).  It's all in the name of trunceformaysheeyin.