Paul Janisch

The tourism minister and section 10 and being forced to listen to a 702 newsclip

I stopped listening to 702 because of YouseewhatadoosIam McHysbak. I don't think 702 misses me but I do wish they'd fire this idiot (I'm not using very fiery language on purpose). I was sent this article which contains an interview with our minister of tourism. At about 7:18 she talks about an application for exemption from BEE. I can't make out whether this is for an exemption in the application process or whether she is referring to an EME certificate as I discussed in the last post. It certainly does sound like she has no idea what she's talking about when it comes to BEE – if she is referring to EMEs, then it's not application – it's an affidavit.

In the Timeslive article she tells the disbelieving public that she is hamstrung by section 10 of the BEE Act

Over and above the moral imperative of transforming the economy, the department of tourism is compelled to apply sector codes as stated in section 10 of the B-BBEE Act: "[E]very organ of state … must apply any relevant code of good practice issued in terms of this act in … determining criteria for the awarding of incentives, grants and investment schemes in support of B-BBEE".

Let's check to see how this measures up against section 10, I've include the relevant subsections of section 10 below

10. Status of codes of good practice

(1) Every organ of state and public entity must apply any relevant code of good practice issued in terms of this Act in

(a) determining qualification criteria for the issuing of licences, concessions or other authorisations in respect of economic activity in terms of any law;

(b) developing and implementing a preferential procurement policy;

(c) determining qualification criteria for the sale of stateowned enterprises;

(d) developing criteria for entering into partnerships with the private sector; and

(e) determining criteria for the awarding of incentives, grants and investment schemes in support of broadbased black economic empowerment.

2(a) The Minister may, after consultation with the relevant organ of state or public entity, exempt the organ of state or public entity from a requirement contained in subsection (1) or allow a deviation therefrom if particular objectively verifiable facts or circumstances applicable to the organ of state or public entity necessitate an exemption or deviation.

(b) The Minister must publish the notice of exemption or deviation in the Gazette.

She's spot on in section 10 (1). It could be either (a) or (e). But what she's not doing is telling us about section 10(2). My reading of 10(2) is that the minister (being hotfood masala Ebie Patel) can exempt the tourism minister from section 10(1). The pandemic being a force majeure in the case of most businesses in the country must measure up as an "objectively verifiable facts or circumstances applicable to the organ of state or public entity". And for those that argue that this is not applicable to the tourism ministry, an organ of state is defined in section 239 of the Constitution as

"organ of state" means ­

a. any department of state or administration in the national, provincial or local sphere of government; or

b. any other functionary or institution ­

i. exercising a power or performing a function in terms of the Constitution or a provincial constitution; or

ii. exercising a public power or performing a public function in terms of any legislation, but does not include a court or a judicial officer;

Of course she counters the legitimate concerns about her selective reading of section 10 with

Evidently, the DA and its surrogates have decided to deliberately conflate non-compliance with the B-BBEE Act and exclusion on the basis of race. Perhaps the question we need to ask and give an honest answer to is, why is it that so many businesses are still failing to comply with B-BBEE?

That the DA, Afriforum and Solidarity have chosen to oppose the application of B-BBEE policy in the administration of the fund is hardly surprising, because these three organisations have, on many occasions, expressed their opposition to the B-BBEE policy and want it scrapped. However, what is unfortunate is that these organisations have chosen to use this crisis as a theatre for political posturing on such an important issue.

Then you have to ask, if she is so concerned with section 10 then why has she ignored paragraph 3.1.1 of STATEMENT 000: GENERAL PRINCIPLES AND THE GENERIC SCORECARD (DTI's generic scorecard) which says

3. APPLICATION OF THE CODES

3.1 The    following Entities are measurable under    the Codes:

3.1.1    all Organs of State and Public Entities;

She's a charlatan and has been caught out and she doesn't have a case. She has to resort to racist rhetoric – she's an ANC (uppercase as an exception, only because I like Cyril) politician. The minute you get caught out you accuse your accusers of being racist or anti-transformation. Hence the accusation will be thrown at me.

Junk status, BEE and Levenstuck

Thank goodness for Keith Levenstein. Those in the industry know that he knows not what he speaks of, and so he is a blogger's dream. In fact I reckon Hlaudi has already issued him with the very first journalist's licence.  His latest press release, which was published by Engineering News , has certainly got tongues wagging. As sensational as the heading may be, it's the only accurate piece of information that is contained in the whole article "Half the economy could become BEE noncompliant by May 2015". It's only half accurate – I would suggest that more than 90% of all companies operating in SA would be BEE non-compliant.

Let's move on to what ol' Keefie is attempting to get through to an unsuspecting public. Wait a minute, I need to go back a bit. Levenstop peddles advice and courses to those who don't know that he doesn't know what he's talking about. Obviously the more sensational the press release the more likely it is that companies are going to flock to him for "high quality advice" (with a strong emphasis on high).

Back to Levenstoy. "If the sector codes are not released in time, businesses will need to follow the amended codes released last October," he said.

Really, is that the truth? And if it is the truth then out of which source did it permeate? Even the DTI would question this version of the truth. It would be wrong for me as a concerned blogger and see-througher-of-Levenstick to leave it at that.

The issue that Levenstranded conveniently ignored is the status of transformation codes. We need to go back to the 2007 codes here (gazette number 29617), specifically statement 003, paragraph 4.3 "A sector code enjoys equal status with that of any other CODE". A Code is issued under section 9 of the BEE Act – see paragraph 3.6 of statement 003 "After considering public comment, the minister may gazette the transformation charter as a sector CODE under section 9 of the Act".

At this point Levenstrangle would be jumping up and down and saying "fuck him – he's wrong! Hasn't the idiot looked at paragraph 10.3 of the revised codes (36928), which says "….(t)he generic scorecard in Code series 000, Statement 000 issued on 9 February 2007, notwithstanding the REPEAL of that statement." ? I'll answer for the idiot. Yes he has read that section – he also knows that the specific paragraph is without legal substance and even if it was it says that Statement 000 is repealed, not Statement 003.

Returning to 36928. Paragraph 3.2.3 of Statement 000 has the following to say about sector codes "A measured entity in a sector in respect of which a sector code has been issued in terms of section 9 of the BBBEE Act as amended, may only be measured for compliance in accordance with that code." Even the new codes recognise that you need sectoral codes (Levenstrungout is an expert on fronting and sectoral codes you know). This is the juncture at which the DTI have got themselves firmly stuck up a pole. The sectoral codes issued under section 9 of the BEE Act are still in force and if they are not amended, replaced or repealed then they will not only not talk to the revised codes, but they'll still be applicable. (The word repeal has been added to the amended bill/act – I don't know what the legal status of the amended act is.). I've spoken to a few people at charter councils and they are galloping away at re-alignment. However this takes time. The Act says that any amendment must go out for comment for 60 days. Then the dti has to ignore consider the comments and then ignore them some more and then publish the final code. The sectoral codes are desperate to meet the dti's April 30 deadline so that all can be harmonious.

Back to Levenstigmatised's aversion that if the sectoral charters aren't aligned or repealed then you default to the revised BEE codes. This is such embarrassing bullshit, I'm sure the DTI are turning their heads in shame. In short, ignore this press release as rubbish and steer clear of poor BEE advice.

Related articles

Complete scorecard (and the occasional cynical quip) for 36928

The new BEE codes and their impact on socio-economic development contributions.

What is the legal status of the new codes?

Challenging the 2013 BEE codes in a court of law - the ball has started rolling

Less than R10m turnover and an EME, I don't think so

More Emex bullshit

  The so-called EMEX Trust has been around for a long time.  They are accredited.  But that is about all that they've got.  They aren't known as the best at what they do.  And this is why

I got this email from Gert du Preez of the Emex Trust.  Gert is the Marketing Manager of this illustrious organisation - and boy oh boy can Gert market.

The pressure on enterprises to become BEE compliant will probably increase dramatically over the next few years.

Can't disagree with you there Gert.  I would suggest that the pressure is already here.  Now for the meaty bit

The Government for instance does not accept tenders if a company cannot provide a valid BEE certificate.

Really Gert, and where did you get this information?  Is there something you know that no-one else does.  To the best of my (well researched) knowledge - the PPPFA regulations advocating scorecards are still in draft form.  I suspect that you are spinning a little yarn here - or as you might better understand "jy praat fokken kak".  

Then there is something about a product that I can offer my clients as a value added service.  The email is devoid of detail as to what this product is - but I have been invited to contact them to find out more. 

This reminds me of Bernard van der Walt of BEE Rating Solutions and some of his sensational emails from last year.    Bernie has stopped with his sensational emails at least. 

Once again - I invite Gert to respond to this post.  I'll post the response as well.

Exit ESKADAAT

Those doing business with ESKOM must be very familiar with their procurement policy, ESKADAAT 6.  The ESKADAAT 6 has all the correct sentiments in place to stimulate and foster black entrepreneurship.  The problem, however, was that it appeared that the ESKOM people implementing it were getting it all wrong (in fact some reports suggested that the purchasing managers would only consider black-owned businesses, irrespective of whether there were black suppliers or not).  This put many businesses under threat resulting in some concluding empowerment deals (you know what I think of deals for compliancy's sake) or just plain fronting (even though the ESKADAAT takes a very dim view of fronting). 

PLEASE NOTE - IT IS NOT MY INTENTION TO INCUR ESKOM'S WRATH (I TOO LIKE TO HAVE ELECTRICITY EVERY NOW AND THEN).  THESE ALLEGATIONS HAVE BEEN TOLD TO ME BY ESKOM'S SUPPLIERS (AND I HAVE SPOKEN TO A FEW), I HAVEN'T CONFIRMED THEM WITH ESKOM.

The good news is that ESKOM is now subject to the BBBEE codes.

Section 3 of BBBEE Code 000 (gazetted on the 9th of February, 2007) states that the codes are applicable to the following PFMA schedules:

• All public entities listed in schedule 2 or 3 (parts A and C) of the PFMA.
• Any public entities listed in schedule 3 (parts B and D) which are trading entities which undertake any business with any organ of state, public entity or any other enterprise

You will notice that ESKOM fits happily within Schedule 2.  Bye,bye ESKADAAT.

Suppliers to ESKOM - start getting your scorecards in order. In fact if you are looking for a reputable rating agency I would strongly recommend Obed de Swardt of BEEMatrix.