Paul Janisch

BEE – the myth that remains a reality

This is a presentation that I gave today at Sakeliga. I don't think there is anything in this presentation that has not been seen before on the blog. It does highlight how BEE has lost its way, corporates pledging that they are committed to transformation are just hollow platitudes (as if they have ever been anything else). The lawmakers don't believe in it either – they see it as a moving target that will never be achieved – if it is achieved then, certainly the ANC, loses its legitimacy. Can you imagine the ANC or the EFF for that matter not being able to throw the racism allegation at everyone concerned. Whilst I'm talking about racism – I read Paper Tiger, the book that tells the world what a joke Oddball Survey is. I recommend that everyone should read the book.

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Julle moet vir my asb verskoon, my Afrikaans is eintlik baie goed, maar die Afrikaans wat ek kan praat is 'n mengsel van army Afrikaans en Poena is Koning Afrikaans. As jy nie die verskil ken nie kan jy my na die tyd vra vir 'n verduideliking. Piet het my toegelaat om in Engels to praat.

This is probably the 16^th year that I have been involved in the BEE industry. When I started I was 20 kilograms lighter, I had a head full of hair, none of it was grey, and fuel was about 1/20^th of what it costs now.

At the outset I thought that there was perhaps a chance that the process could right the wrongs of the past and bring the previously marginalised into the economy. By my reckoning the desired result would have been a robust economy that benefited all South Africans. I still believe that a skilled, self-sufficient population that does not depend on the state and its corrective measures (including social grants) is the tonic that this country, and continent, needs. Unfortunately neither black economic empowerment nor any of the other so called "empowerment related" legislation are going to solve this problem.

Let's look at a little history. The first BEE codes of good practice were published in 2007. They had their flaws, the greatest being that they were vague and the DTI chose not to provide any guidance when it came to implementation, a status quo that remains to this day.

Within a year or two you were guaranteed to find the local butcher in Worcester had some sort of a BEE scorecard to show her clients. This meant that the broader message was being filtered through the economy – from the major centres through to the outlying areas. The larger corporates regarded BEE performance as some sort of a competitive advantage, often using empty platitudes declaring their commitment to transformation whilst parading their ever improving BEE score.

The DTI gave these codes a mere 5 years to succeed. Under the misguided leadership of rob davies (or bolshie bob – always in lowercase, as he came to be known on my blog), they set about changing the very structure of the BEE codes by creating a regime that was both punitive and ridiculously hard to understand and even harder to implement. Using manufactured allegations that black businesses were being charged an arm and a leg for a BEE scorecard and that the codes had become too easy to implement, they thrust a series of misguided initiatives on a zuma punch drunk economy. Be assured that the DTI largely if not completely ignored the comments that pointed out the ridiculousness of their latest document. At the same time they chose to exempt black owned companies that turned over less than R50m from all of these initiatives. This was in spite of the fact that the BEE strategy document stated that BEE must be an inclusive process, no one should be exempt. The overt message was that building the economy was not a black problem – this burden must only be shouldered by business owners other than those designated groups.

It soon became very clear that the reason behind the revision was not so much to transform the economy, but to create a stumbling block for those companies who would not make a plan to become 51% black owned. In a sense the codes were designed to induce companies to part with 51% of their shares if they wished to do business with the state or large corporates. This costly stumbling block was designed to exclusively open the doors for smaller black owned businesses to win state contracts. The DTI then enlisted the help of treasury to ensure that black ownership would be the overriding criteria when awarding contracts under the Preferential Procurement Policy Framework Act. Please don't believe the myth that that legislation does not discriminate against companies that have no black ownership, it is IMPOSSIBLE for any company to get to a level 4 on any scorecard without ownership. But if you have 51% ownership and your turnover less than R50m it is a mere affidavit that pushes you right up to the top of the bidding pile, a level 2.

Emboldened by this bolshie bob (davies) then extended empowerment credentials to industries that might need a licence to operate. He was so excited by this prospect that he amended the BEE act to extend the ambit of issuing of licenses under section 10. As far back as 2013 he passed the Liquor Regulation Amendment Act which required a BEE certificate to be submitted along with an application for a liquor licence. He was so impressed with himself that in 2016 he proposed that unless you had a certain level you may not be allowed to participate in certain aspects of the liquor industry at all.

This is but one example. You can't mine without ownership, it's almost impossible to become a supplier to the mines without 26% black ownership. Forget about doing business with any of the state-owned entities.

The latest iteration of empowerment is now the punitive requirement of paying over 2.5% of your payroll to black students enrolled at higher education institutions. To put this in perspective, Eskom would need to spend about R700m on bursaries in exchange for 4 BEE points. This points the way for more ludicrous amendments to the codes to address other social or economic issues within the country – perhaps we will be given 3 points if we pay for electricity at three times the retail price. It wouldn't surprise me.

Where to from here. BEE is going nowhere even though it has long given up its mandate to transform the economy. It's now a political tool to whip the private sector by threatening them with fronting allegations, a crime so vague that it is unlikely that there will ever be a conviction for fronting. BEE as a concept is s so hot that none of the larger political parties risk doing away with it. Compliance will become more complex and onerous. But there are a lot of clever people out there that come up with a variety of clever schemes to get around the complexities. From the crowd of lawyers in Bloemfontein who can make you look black at a ridiculous fee without being black at all; to the Pretoria gang who can get you a huge number of points using compelling tax breaks. These programmes are not without their pitfalls, they need to stay one step ahead of the two dti guard dogs who derive their legitimacy from the simple narrative that South African businesses are fundamentally racist in nature. These are the hopelessly clueless BEE commissioner and the equally inept SANAS (SANASSES might be a better description). I have my doubts whether Patel is going to be any better than bolshie bob, he's cut from similar cloth – but his department might be getting a lot more governmental scrutiny than his predecessor got under zuma.

The fact that the economy still operates is a testament to the determination of people like yourselves who have taken all these challenges on the chin and survived.

Also remember that there are always solutions. Every time another stick is put in the wheel someone (inevitably from Bloem) comes up with a solution.

James and the giant eight

Blink and you discover that your little boy has been on this planet for eight years. How on earth did that happen, it was perhaps yesterday that I was walking him to nursery school – that yesterday was two years ago. Our little boy has been in big school for two years and finishing off his grade one year. Grade one requires a school uniform and school shoes and writing and reading and all that stuff. And he is doing all that stuff.

It was an interesting process dressing him up in his school uniform and getting him to school at 7:30, vs the 8 o clock start that he had for his first four years at school (I do need to stress that this is done mostly by his mother and Thuli). It's not been too much of stretch because his brother has to be at school at a similar time. It's now school bags and bubble bags, readers and languages.

There is a loyalty to his friends that sets James apart from others. His big mates are Arno, Max and Fred, they were all in the same class last year but now have been moved into separate classes. This has not prevented James from meeting them on the playground most days and playing with them. They are his core group of friends and they have regular sleepovers at his house (chaos) and he often goes to their houses for sleepovers (other peoples' chaos).

Our youngest has adapted well to school life. He has no issues wearing the uniform and respects his teachers. A very rule bound boy, James probably enjoys the structure and the discipline that schools tend to insist upon. It's early in his school career, there is no structured sport other than athletics and swimming. Athletics hasn't quite captured his imagination but swimming has and with a gala coming up in the next week, I expect to see a competitive boy in the pool. He won't be coming into sport as a novice when it formally starts in the next year or so, he has received intense and expert coaching from his football-mad older brother. If you want to play with your older brother then you had better play soccer and so James plays soccer and there is a steady improvement in his game, he's enjoying it too.

James is the creative one in our house, there are LEGO sculptures and paper animals everywhere. There is enough LEGO to build a mansion in the Karoo. I haven't suggested this to James because he might actually build it. His reading is good enough now to consult architecture manuals for the build. It's been wonderful watching him learn to read, everything that can be read is read, he read's road signs, notice boards – anything with words on it. We're still reading him a chapter out of any of the Walliams books every night, but I expect that he will become more self sufficient in the next few months and take himself off to bed with a book. He's also quite proficient with languages, he listens to what he learns at school and what he picks up at home and is happy to throw in the occasional sentence.

James is still our little boy. He's a sensitive child who is still susceptible to monsters after watching shows on TV. He's still the worst bedmate I have ever come across, which results in one of us leaving the bed (which is as big as Texas) when he runs through to join us. He's a little brother that needs to find his space with a sport obsessed older brother. And because he hasn't started formal sport yet he finds himself dragged to watch his older brother on multiple sports fields. He was spared from watching his brother performing at his Suarez (soiree) though. He has found his own interests. He's taken up the violin, mostly because his best mates are also playing the instrument. He's stuck at it and has performed at his first concert, which he delivered with aplomb.  He should practice more but he's young and still finding what works and doesn't work for him, I expect he'll go through a multitude of instruments before the end of primary school.

Happy eighth birthday JimJam. These have been very rewarding years for me, I revel in your enthusiasm and wild theories and stories that might be slightly (if not completely) devoid of truth, told with a deadpan face. I love how you are actually able to entertain yourself. I love your artwork, I love your imagination and I love you forever. You are the finest youngest son any parent could wish for. Next year is grade 2 and more adventures.

The picture is one of James' artworks.  It's a llama, not a drama llama like his brother was in his school play.

And so we come to the music.

03 - Bernoldus Niemand - Marie Ferrari

James' designated musician is James Phillips, who just becomes more relevant as the new government reverts back to the methods that their oppressors taught them. This track is taken off the "Wie is Bernoldus Niemand" album. I probably have said this before and will say for the rest of time. This album is the most significant album ever released by a South African artist. This is not to decry the significant contributions made by artists like Johnny Clegg or National Wake. Its significance lies in the fact that it was the precursor to the Voelvry movement that played a core role in the dismantling of apartheid. When the likes of Johannes Kerkorrel and Andre Letoit (as he was known then) went on their tour of the country they dragged James Phillips along – the album was already five years old by then. It was that tour that forced the apartheid government to take notice of the once compliant Afrikaans youth who were now happily writing songs that spoke out against the apartheid system. What was more alarming to the apartheid state was the fact that the white youth were listening to this music and attending the concerts. Apartheid fell soon after that.

The track is about a young lady called Marie Ferrari who aspires to marry well and live in Waterkloof with all the trappings of wealth. She ends up falling for a skollie with a volksie. A wonderful song and a great lesson for everyone. I have put the link up there where you can buy the track, and I would encourage you to buy the whole album. But seeing that this post is supposed to be there forever, I've chosen to put up the song for download. I do want my children to listen to my dubious music for many years to come.

12 - CAN - Mushroom

CAN – Mushroom. The first time I heard this song I was transfixed. This was real music to my ears. CAN belonged to a musical movement known as Krautrock. The movement arose when young German musicians were looking for an identity that they could call German. They justifiably detested Schlager (which is what Kurt Darren has modelled his insipid career on) and related to the English hardrock of the time – Purple and Sabbath were two examples. But they wanted something German so they created this. What I love the most about this track is that you have four German musicians and a Japanese singer singing in English. How on earth can this not be great. I heard James singing this song to himself and I swelled with pride. I did ask Chris Daffy of LMRadio to play it but he declined – so I'm putting it up for you poor people who thought German music was Beethoven, Mozart and Howard Carpendale.

For those who wish to know more about Krautrock, the video below is a great place to start.