Paul Janisch

A BEE regulator for us - maybe, is there a vacant position

The dti is getting proactive, well at least they are proactively saying that they are going to be proactive.  A regulator is going to be introduced to "curtail some forms of fronting".   And this is at the behest of ABVA.  Now that I have paraphrased this article I'm going to cut to the chase.

Chris van Wyk, ABVA's chairman, says that the codes are too vague and as a result "fronting" might occur.  Then Sidwell Medupe states that this is wrong and throws in a PW Botha-ism

 “The dti would like to state categorically that the above-mentioned statement is factually incorrect. In fact our minister has previously alluded to the fact that the verification industry is partly responsible for this scourge.”

The point is made, even though it makes light of Chris' original statement.  But what is the dti going to do about it?  They are responsible for all aspects of BEE.  They provide us with the Act, the Codes, the Charters and............................SILENCE.  That's right, when it comes to the crunch the dti remains silent.  This ridiculous mess with Keith Levenstein and charters is but one example.  Where was the dti when the industry needed them?  Out to lunch I think.  

It's no real surprise that the dti has only ever focused on fronting, labeling it a scourge and vile practice and other euphemisms, because fronting is safe.  You don't have to even understand fronting as well as Levenstein to talk about it.  But we in the know regard the dti's silence on the vagueness of their codes (Chris van Wyk reckons there are about 102 mistakes - he can't have read the codes beyond page 40 then) as a problem.  Consequently we cannot be surprised that the BEE industry (if I may call it that) has had to resort to self-regulation.  In fact the last place you want to go for clarity or advice is the dti.  ABVA must be congratulated for actually managing the industry as well as it has over the last few years, excluding those years when they were completely ABVAcant.

The time has come for the dti to take control, drop the fronting front and show some real leadership.  My sources tell me that Nomonde is doing a great job fighting all sorts of political battles to get stuff done.  Our patience is wearing thin, tell us where we can help (without mentioning fronting) and we'll get involved.

And now a little ditty for the dti (for those who don't know, Sid Vicious played bass about as well as the dti understands BEE, it's not him playing on the track)

 

 

What SANAS has to say (or what they said last year)

From: Phinda Ndabula [mailto:PhindaN@sanas.co.za] Sent: 09 December 2010 01:07

Subject: Sector Codes

Dear All

We have been receiving a lot of complaints about Verification Agencies who are not issuing relevant Sector Codes scorecards even though companies obviously fall within a particular sector. If greater than 50% of one’s revenue is derived from a specific sector or their primary business activity falls within one of the specified activities, the company is obliged to be measured against the respective scorecard.

Can we please work together in making sure that we maintain integrity of this industry by complying with legislation.
Regards, 

Phinda NdabulaB-BBEE Field ManagerSANAS

So does this mean that the EcoKNobs were right.  Perhaps.  Still this email is very ultra vires - and lacks the requisite legal backing to actually make it official.

 What is interesting about this email (being on John Lennon's death day - as noticed in South Africa) is that Phinda is referring to something that only appears in the construction charter - the 50% turnover.  Which reminds me of a conversation I had with Deon Paulsen of Stuttaford Van Lines who told me that they aren't in fact a transport company, it's just one of the things they do (oh and they are also not part of a listed entity either).  They also do things like storage, move management, insurance et al, it's all on their website.  Deon was at pains to point out to me that moving is but a small part of their business.  All he has to do now is show that how his turnover is derived and decide on a scorecard based on this.

Suddenly Levenstein's burden of proof has increased - but does he give a fuck,  probably not. 

BEE hierarchy - ABVampire content

Perhaps this is not very clear, and as a responsible BEE consultant/expert/commentator (self-professed), it is my duty to explain this hierarchy.

Number 1 - BEE Act

The BEE Act reigns supreme.  All codes and notices etc derive their legitimacy from the act.  It would seem that the act comes from section 9 (2) - as read with section 36, and section 217 of the constitution.  9 (2) says

 (2) Equality includes the full and equal enjoyment of all rights and freedoms. To promote the  achievement of equality, legislative and other measures designed to protect or advance persons, or categories of persons, disadvantaged by unfair discrimination may be taken. 

Number 2 - the DTI

The DTI is responsible for drafting, proof reading, spell checking, arithmetic checking, approving and gazetting the codes/charters.  

Number 3 - SANAS (for now)

I say for now because Rob has sent out a notice that the Independent Regulatory Board for Auditors (IRBA) might become another SANAS.  But that's down the line, right now verification agencies are accredited and evaluated on a yearly basis by SANAS.  For simplicity's sake - these are the licence licensers.

Number 4 - verification agencies/ABVAledictators

These are the referees.  They award points based on information.  They have been given a licence to do this by SANAS.  This licence is not specifically a requirement but we've all learned that there's no point in arguing this pointless point.  Every year a VA has to beg SANAS to extend their licence to verify.  SANAS has the most ridiculous set of rules that they apply - and every VA is at their mercy, ask BEE Rating Solutions.

Number 5 - consultants and the clients

That's right - we are at the absolute bottom.  It doesn't get lower than this, our job is simply to interpret the codes and provide the necessary justification to the verification agencies so that a BEE score is awarded.  We are but players in this game - with a right to refer decisions to the referee for review (the verification agent).

A bit of history

The relationship between consultants and ABVA has not been a smooth one.   In the past ABVA exercised some sort of ius vitae necisque over the industry.  They were calling the shots, rejecting certificates, pronouncing when a certificate would be valid, calling more shots, assuming humongous fascististic tendencies and then calling even more shots.  Strangely enough it was Rob who came to their rescue by publishing notice 810 - which effectively stated that only accredited verification agencies could issue valid certificates (yes I know that it talks back to the act - but I wasn't going to be bothered debating this not schlepping off to the high court to get it turned over).  This wasn't without its ABVAricose vein hiccups but all was resolved when the period that non-accredited certificates would be valid until expired.

It's actually a relief now - I think things are very clear.  I consult and give  the information to a verification agency and try to persuade the agency to accept my arguments.  I no longer view either ABVA or verification agencies as dof or a threat and  have learned to play by their rules - because they are the ones who award the points.  It's me who could lose the client.

Here endeth the lesson.

 

very seriously in imparting this piece of 

Chris van Wyk on sector charters

This is an email I received from Chris van Wyk of AQRate, which I requested as a response to my post on sector charters.  It seems that he is writing in his AQRate capacity and not that of an ABVA Board member. You'll notice that he's coming from a procedural perspective where he argues that because the minister did not gazette the words "the TRANSPORT SUB-SECTOR CODES are binding on all stakeholders operating in the TRANSPORT Sector within which the Sub-Sector Codes apply" in the 9(5) gazetting this paragraph cannot have any legal effect.  His argument does not concur with Levenstein on the invalidity of the certificate in question.   Chris's comments are italicised below - I thought it prudent to include his disclaimer.

Herewith my response to SANAS:

I take note of the e-mail from Keith Levenstein. I am not aware of the circumstances that lead to the issuing of the certificate. I do however attach for your attention an opinion I did quite a while back on the applicability of the sector Codes. AQRate is accredited to conduct verifications on all sector codes and the matter is neither here nor there for us as we do not stand to lose business for lack of accreditation. The opinion that follows is merely my considered opinion on the entire matter as a legal professional.

The Codes clearly state that a sector code and the generic codes have equal status. Although the notice to the sector codes contains a paragraph to the effect that all business in the particular sector need to apply this sector code – this provision is not contained in the sector code itself but in a paragraph just above the Minister's signature on the Notice to the Code. It was not gazetted with the 9(5) notices to these sector codes and can therefore not be applicable.

Given the status of the Codes and its provision that a sector code and the generic codes have equal status – any attempt to give the sector code more status is in our view ultra vires.

AQRate advises all clients in such a sector to have the sector Codes verification done as opposed to Generic Codes verification. But in theory issuing a generic codes certificate to an entity in such a sector is not unlawful as is suggested by Keith Levenstein.

Even if my opinion, as highlighted above, were disregarded one cannot argue that because a particular business falls within a sector governed by a sector code, that it is unlawful for that business to have itself verified in terms of any other general Code of Good Practice or any other sector Codes for that matter, as long as the certificate in question clearly states the Code in terms of which the verification was done. At best the recipient of that certificate, be it a client of the measured entity or a tender board, is at liberty, as they are in any event, to reject the particular certificate and request a certificate be furnished to them in terms of the applicable sector code.

The entire BEE programme is voluntary and the fact that a particular company for example falls within the transport sector does not mean that it is obliged to have itself measured in terms of the transport sector or any sector for that matter. When it elects to have itself measured in terms of a Code other than the transport sector code, neither it or its verification agency will be acting unlawfully in conducting such a verification, as long as they clearly declare on the face of the certificate the Code in terms of which the verification was conducted. If they don't, the furnishing of such a certificate could be regarded as a deliberate attempt to mislead and misrepresent the measured entity's BEE status.

Off course, it is incumbent upon the verification agency in question to disclose its scope of accreditation to its client and also to advise appropriately. I don't know the facts around the particular case well enough to say whether the particular verification agency was at fault with this or not.

Kind Regards

Chris van Wyk

CEO

AQRate (Pty) Ltd / Tel: 021 914 9451 / www.aQrate.co.za

This e-mail and attachments relating thereto, is intended for the abovementioned recipient/s. If you have received this e-mail in error, kindly notify the sender and delete it immediately as it contains information relating to the official business of AQRate, which is confidential, legally privileged and proprietary to AQRate. AQRate does not own and/or endorse any other content. The views and opinions expressed in this e-mail are those of the sender unless clearly stated as being those of AQRate.

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I doubt whether I am only person who knows that Keith Levenstein's opinions tend to veer on the side of the sensational without a proper consideration for sense, fact or logic. The email he sent to SANAS and the verification agency shows a complete lack of understanding of a subject that he has professed himself to be an expert in. In fact the numerous postings on his website and newsletters (which for some or other reason I am now receiving) are sometimes so ridiculous that you cannot but laugh. The problem is these newsletters are being circulated and people read them.  

The real question here is – can a person who sends such damning emails be taken seriously by the authorities? I have my grave doubts that they do.

Compensation Fund vendor registration form - ABVA insulted

If only it wasn't true.  The Compensation Fund is part of the department of labour and they too have a vendor registration form. 

This document is up there with the KZN DPW vendor form.  The first thing that you notice is that they do not regard a verification certificate as worth anything because they insist that

Supporting documentation confirming the points scored regarding each element of the applicable scorecard, as used by the relevant verification agency.  Applicable to all bidders submitting a valid verification certificate in terms of the BBBEE Codes of Good Practice.

What on earth is this?  ABVAcuous, I would get onto this as soon as you can because they are effectively stating the VAs have no integrity in verifying.

Wait a minute, why are they worried about a BEE scorecard when  all govt depts have to follow the PPPFA.

This gets better.  Further on down the document they ask you to fill in each element in complete detail AGAIN!!!!

But no people, things improve even more.  This is from the department of labour, that esteemed department that upholds our rights as workers or people who labour.  One would think they have an understanding of the constitution and its accompanying legislation.  But alas - they are about as clueless as the DMR.  Take a look at this requirement (page 10)

If you are disabled, please submit an Affidavit from the Police confirming your disability and the nature.

Huh!!! 

Firstly - can any third party confirm a disability. 

Secondly - what does the SAPS know about judging disability.  If anything (and I don't think this is legal anyway) it would have to be a medical specialist who can state this with any authority.

Thirdly - why does the DoL have an EEA1 form.  And why don't they allow this form to be submitted?

What a total crock.  And what a chronic embarrassment.  Mildred - I hope you sort out this issue very soon.  Your department is a joke and we have ample proof of this.

If you don't believe me - here it is.

2009 BEE awards

I was looking through my predictions for 2009 and have to (humbly) confess that the Nostradamus way is not my calling.

• The FSC is probably going nowhere
• A bunch of charters made section 9 gazetting
• BEE scorecards have become necessary tools in doing business but are not a competitive advantage. It seems that each industry has a certain standard and if you don't meet that standard then you are at a disadvantage
• Treasury actually published updated regulations for the PPPFA and they included scorecards
• Verification agencies were accredited and before the elections too
• Can't say whether Empowerdex lost their market share to NERA – but they do seem to have lost the empowerdex.com domain

Now onto to 2009. It was one hell of a year for BEE as a policy. This is what I think were the most significant events

• Accreditation of verification agencies

I never thought this would happen. But it did and it looks as though a few more will make the cut too. I've prepared a spreadsheet that explains how much work verification agencies have on their hands in the next few years. I was fiddling around on a VERY FAMOUS verification agency's website and they proclaimed that to date they had done about 2000 certificates since they started. I have news for you VERY FAMOUS verification agency, you are going to have to do about 6,494 (I like to keep my speculative figures precise) next year. This is about 26 per day. If you'd like to check my figures - please do.

As a little postscript I have been very hard on the old VAs (but not hard enough on ABVAngelis) – I have just completed a list of procedures for a VA hoping to get through SANAS. This is a lot of work and a very expensive process. I expect I'll be doing a lot more of that next year.

• Rob Davies taking over the trade and industry ministry

This was a weird one. It seemed that Rob wasn't that interested in BEE and that he inherited a mess from Mandisi. I stand by what I have said about Rob, I think he's pushing for compliance over transformation, hoping that compliance will lead to transformation.

• Section 9 Charters

There were a bunch. Some gazetted by Mandisi and others by Rob.

• New PPPFA regulations

A bold move, even if they are in draft form. I'm not going to speculate as to when the final document gets published.

• NABC starts making a noise

The National Association of BEE Consultants. This is a total waste of time. As much as I dislike ABVA, at least they are organised. The NABC has no common agenda and lacks unified leadership. I cannot see how they are going to add any value to anything ever (oops there I go wearing my Nostradamus hat again)

• BEE advisory council

Good move Zumachine Gun. Let's see what they do in 2010.

• Expected demise of the FSC

The FSC seems to be dead in the water (on this subject the drafter of the new FSC annual report pinched almost everyone of my ideas from last year – don't they say imitation is the greatest form of flattery. It would have been nice to see a document that stuck to the actual tender requirements).

Good luck for 2010 – I am hoping to fulfil the Charlie Christian mantra throughout the year with each client (it is said that Charlie would play guitar if he got all three, but he was known to settle for two out of three)

1. Learn something new
2. Get paid
3. Have fun

And on the subject of fun – can anyone spell AC/DC.

Feel free to add your highlights in the comments section.

ABVAcuousness

I was sent an email by Louis McLaren telling me that the certificate I issued might not be accepted.  I sent him a mail back telling him that it was perfectly legal in terms of notice 32467.  I then got a response from him telling me that a VA would not accept it because ABVA says it won't.  I then mentioned that the VA is not in a position to decide who are what certificates are acceptable.  I have blogged about this in a great amount of detail before.

I need to stress that Louis is a highly respected man in this industry - he is not part of this tirade.  At all times he kept the name of the VA away from me.

This dimwit (who is nameless to me) has a similar intelligence level to Bright Matonga  - in fact I'll call him/her that name.  This is Bright's response (peppered with my comments.

"His statement that no verification agency may decide what to accept or not clearly shows ignorance on the side of the individual in question.

Really?

It is the precise function of a verification agency to decide on the validity of evidence presented to it by a measured entity.  The procurement official of that measured entity may have decided what to accept as sufficient proof for its procurement purposes but for verification purposes verification agencies have to make their decisions within the context of a legislated regime which prescribes what is acceptable evidence or not.

Questionable legislation.  Tell me Bright have you actually read the verification manual?  It is a document drafted by someone who might be marginally cleverer than you.  The English and exemplary BEE knowledge of the drafter/s make for comedic reading indeed.  Here are but two examples

• Establish the existence (?) proof through the AMP201 (page 64).  What the hell is an AMP201?  It doesn't exist in a South African legislative context.  I somehow think they are referring to an EMP 201.  If Bright's drafter friends don't even know this then what are they doing drafting this riveting document?
• There are no local production (5.4.6.1 - page 69).  Lovely stuff - something my corporal might have uttered and he made no bones about the fact that he spoke English very reluctantly.  Bright, could you be my old corporal?

Whilst it might be regarded as "law" for now - everyone knows that this document would be thrown out of a court of law. 

The decision of the verification agency can therefore not be arbitrary but must have a sound legal basis.  The interpretation of ABVA on the particular matter is based on the current legislation issued on the matter.  Although controversial, it is the only interpretation that stands the test of legality.  I would love to hear the legal - not policy or emotional argument, for the view adopted by this individual.

Yes Bright this is ABVA's interpretation.  Confirmed to me by Andile (is BEE really my strongpoint?) Tlhoaéle.  And this is the most important point - it is not a point endorsed by the DTI or SANAS.  Whilst Andile avers that it has some legal backing because of the definition of a verification agency in R47-02 it still lacks legitimacy.  And this is another perfect example of ABVAndalism and ABVAingloriousness. 

I suggest he starts off by providing me with the legal definition of the term "unaccredited verification agency" that does not result in an absurdity"

I just did you knucklehead.  And I have a little news for you I have heard the Sipho Zikode asked the question why your little association should be the only one that gets to play BEE god.  He suggested at a recent meeting that SAICA, ACCA or any other association should also represent their members who are VAs.

My advice to you Bright is wake up, read the gazetted legislation and then work your pathetic little backside off from the 1st of February next year, because you are going to have to do about 50 verifications a day.  In the meantime stop hiding behind ABVA's skirt tails and service your clients not your immature ego.