Paul Janisch

SANAS is extending the accreditation and a Twitter endorsement

I subscribe to numerous blogs and one of them is the 16th letter. Melissa posted one post on Twitter and I registered.  It's only over the last week or so that I have been tweeting and it has had a huge impact on my blogging.

And so to the point.  I got sent this note from an associate.  It appears that SANAS is going to extend the verification licence to include the new charters.  The notice concludes that the charters are not so different to the codes and that "the outcome is that the assessment will not be necessary."  Do I sense that standards might be slipping.

Take a look at the notice and decide for yourself.

Extension of deadline

The DTI must've twigged that the 1  August deadline was never going to make it.  The deadline for non-accredited verificatiion certificates has been extended to the 1st of February next year, and then August of 2010 etc.

And I quote

• From 1 February 2010, only BEE verification certificates issued by Accredited Verification Agencies or VAs that are in possession of a valid pre-assessment letter from SANAS will be valid
• Despite the provision above, all verification certificates issued by non-accredited agencies before 1 February 2010, will remain valid for 12 months from the date of issues
• Notice 354 and 677 are deemed to be repealed from 1 August 2009

The notification was signed by Rob Davies too.

 You can look at it here.  Also and importantly the ABVAndals have also noted this extension - this means that they CANNOT reject certificates as they are wont to do.

You may have seen that I twittered that the Transport Charter is due to be gazetted in the next few days/weeks.  Apparently the aviation sub-sector will not be included.  I suppose they will look a lot like this.

Spar did it, SAB did it, even striking Massmart did it

Let's do it, let's do a deal.  The question is what is the common feature between all these companies - SAB, Spar, Massmart and Woolworths.  It can't be retail because of SAB.  The answer has to be liquor licences.  I once asked Massmart a few years ago why they were so concerned about BEE when they were a retail company - the answer was licquor licences. 

SAB is a fascinating deal, it stands out as the only one where the business reasons are so apparent.   We know that the Western Cape is clamping down on unlicensed taverns and 70% of SAB's turnover comes from unlicensed taverns.  Here is SAB staring at the potential demise of their biggest channel unless they do something.  Sheer brilliance, if I may use such a superlative.

And Spar?  Your local Spar sells wine and if you head out to Gateway in Durban looking for whiskey, you'll find it at Tops Liqour Store - which forms part of the Spar Group.  Spar has announced their BEE deal - no surprises here. 

Why then is the liquor industry different to the minerals industry when it comes to licenses?  Simple - liquor licences are controlled by the DTI.  Take a look at the requirements here. And if you consider that the BEE Act is theirs too, then of course they are going to use those principles.  I would suggest that the operative clause is section 10 of the Act

Every Organ of State and Public Entity must take into account and,as far as is reasonably possible, apply any relevant code of good practice issued in terms of this Act in –

•  Determining qualification criteria for the issuing of licenses, concessions or other authorisations in terms of any law

This highlights the essence of empowerment and the private sector.  The best way for the government to force compliance is to do it through the issuing of licences and concessions.  This is the measure of BEE deals in the retail sector.  A recent FM article notes that Clicks Group, Lewis, Shoprite, JD Group, Foschini and Truworths haven't done BEE deals at the equity level.  Other than Shoprite, which of those needs a licence to operate?  Is the black ownership of Truworths significant to the consumer who want to buy a pair of shoes?  The answer is no.   And then again what does Shoprite know that the other don't; have they managed to convince the DTI that the balance of their scorecard is acceptable. 

A Business Report article published just after the Spar deal laments the slow pace at which the retail sector has been doing deals.  I found this paragraph the most interesting

Retail analyst Syd Vianello from Nedcor Securities warned that at some point the government would force companies to put black economic empowerment (BEE) schemes into place.

My immediate reaction is how are they going to do this?  Are they going to legislate like jungle and Peter Vundla have suggested.  Or does Syd know something about the constitution that I don't because if you legislate then you'd better start amending a few sections. 

And as a predictable postscript - why is it that ownership is still the only measurement for empowerment? 

In-SANAS-ity - or a reader writes

Anyone who has ever blogged will understand the joy of receiving comments and emails based on your latest post.  I have about 50 subscribers but I do know that every now and then my posts get circulated - especially when I talk about my soon to be new friend jungle jim (who seems to be active again,  I've missed him).   

I got an email from someone (I'm going to call him Albert) who has an incredible insight into the ABVA/SANAS relationship. I didn't get Kevin's last response, to me the behaviour of ABVA was its own issue and problem.  However it seems as though SANAS has made certain demands on ABVA that might impact on the behaviour of ABVA's various members.  You decide:

"There is no doubt that SANAS is involved somewhere. They are on a power trip second to none. As I hear from the people who applied for accreditation, and some of them have had as many as four inspections to date and some have spent in excess of R100 000 on the process (this does not include development costs for systems, only fees paid to date!), SANAS nitpicks and require a system which has a higher standard than that required of Chartered Accountants.

There is no doubt in my mind that the so called 'Guides' owe their existence to the over zealous and hidebound slavery to rules and ISO systems according to which SANAS want to bind everyone ( Remember their only experience to date has been the accreditation of Laboratories where ISO works well). Some of their requirements for the Verification industry are simply ludicrous and will not withstand examination. It seems that they dream up new rules and committees every night.  I think it is a case of -'I like blue and therefor everyone should wear blue and be damned with the rest, I say do it!' The gods have spoken. They are clearly operating to a set of rules which they really do not have the authority to set. ABVA and its members either no not have the guts or will to stand up to them because they are afraid of not gaining Accreditation or the do not have the ability or authority as an association to say -'Enough is enough"- and take on SANAS with reasonable arguments.

I agree that going for Bernard will serve no one. He was clearly sacrificed by his friends. If he is guilty, and I don't think that he is, it is probably because he may have disseminated the 'guides', and thereby done all of us a favor.

A little bird tells me that quite a substantial number of the so called 'Full Members' of ABVA may not in fact have paid there dues for the current year. One wonders if they are then still in fact members or if their membership on record is kept in place simply to allow ABVA to claim a representative role. Is it not time for a new Broad Based Association to come into existence and really represent the industry in its widest sense? They can then speak for the Verification Agencies /and/ the Consultants (perhaps with one Board and two chambers to ensure that everyone works towards the same ideals and some synergy will be seen. This will certainly serve all."

Albert also sent me this document - which is a later version of the October document I posted last time.  It still has cwu as the author.   Albert  writes

For your information I attach a copy of another version of the fateful 'Guide for Verification Agencies' which no-one wants to own up to.This one is dated 30 November 2007. It is also circulating in the Verification industry and at one time seems to have been accepted as the latest 'Word From Above' by some. It is clearly a later version of the 'October Guide' and may even have the same author. According to the 'Copyright Policy' on page 2 it clearly purports to belong to the dti who have now disavowed it.

Thanks Albert - I know that Kevin was very keen to read your comments.

ABVAndalism

Has the battle been won, and if so where is the war going to take us to?  Stephen Timm wrote an article in Business Report last week telling us that "Abva was 'wrong' in insisting that business owners who supply corporates must have a verified agency rating."   Thanks to everyone who sent me an email about this article.

But I don't think we should leave it at that.  ABVA's management and leadership have behaved shockingly under the circumstances.  They have hurriedly published a response to Timm's article in today's Business Report (thanks Colin).  In this response they maintain their innocence as an association.

I want to talk about a few things in this last report - and it probably is best to go back chronologically.

1. The controversial draft document that started this mess reveals some very interesting information.  I was chatting to a colleague who pointed out that the document's properties reveal the author to be "cwu".  I noticed this but thought it might be some institution.   But closer inspection suggests that this might be C Wu, more specifically Chia-Chao Wu.  Is it that Chia-Chao wrote a document that the DTI were to regard as policy?  If this is the case then it is not even vaguely surprising that self-verification would be banned because an Empowerdex director has written the document.  This is in stark contrast with the sentiment  Vuyo Jack expressed in his book - (w)hen the dti task team [who put the codes together] addressed any issue about verification agencies and the verification process, Empowerdex removed itself from the process in acknowledgment of the conflict of interest. broad-based BEE - The Complete Guide page 78.
2. When I read the email from BEE Rating Solutions I emailed Bernard van der Walt immediately telling him I was going to go for him in this blog.  He responded with this email.  There is a bit of information missing from the mail itself, but it does suggest that Bernard asked a few people from ABVA in late February whether he could sent out this notice.  And Theo Lombard responded that it was acceptable.  Now take a look at Timm's article again.  In it he writes that "yesterday Lombard claimed not to have seen the [BEE Rating Solutions']e-mail".  When you read this with the ABVA response (written by Ridwana Jooma-Cook) you'll see more anomalies, specifically the e-mail sent by an Abva member in this regard was against departmental guidelines issued in October and was drafted prior to the recent meeting with the department. Abva instructed the member on March 12 to refrain from sending out any further communication in this regard. 
3.  There is something wrong here.  It seems as though BEE Rating Solutions is being used as a Judasbok (I can't find a definition of this word but it is the animal that leads all the other animals into the execution chamber in an abattoir.  The Judasbok itself is not slaughtered).  If the email had been successful then ABVA wins, if not Bernard takes the rap alone.  I would expect a lot more from an association that I was involved with.

So we come back to where we were in February last year.  The only rule that applies to any form of verification is that the verification has  to be  backed up  by "suitable  evidence".   And  it is quite likely that companies  that choose to verify themselves are able to produce  "suitable evidence".  I don't expect verification agencies to end up getting less work because of this - companies will always want someone to do this for them.  But there really needs to be a shake-up within the executive of ABVA.   

Bring Vuyo back
Perhaps it is time to get Vuyo Jack back into the business.  He is highly respected and is regarded as a pioneer.  He also has the ear of both government and business.  On top of it he co-wrote the definitive guide to BEE.

Vuyo - would you consider an executive position at ABVA?  I also think we need to see people on that board who are within the industry but are not verification agencies.  Perhaps someone like Kevin Lester or Robin Woolley, I'll sit on this board if I am asked.

By the way
I gave Theo a chance to respond to emails I sent him and he hasn't yet (in fact he has not responded to a single email I have sent him in the last three years.   I somehow think he's not going to respond to any ever).

It's official - Bernie says it is

There is one rule about blogging that no one will ever tell you about - and that is shooting from the hip.  You can create an immense amount of trouble for yourself by shooting your mouth off unnecessarily.

Before I start - I see that the Property Charter has been gazetted under section 12.  It was gazetted on the 5th of October, 2007 and has now found its way onto the DTI's website.

I have had some time to think about this post - and I've spoken to Bernard van der Walt as well.  I told him I'd be nice.  Here goes

Today many of us received this email.

BEE Update:  Self Ratings not valid

Spending money on suppliers who did self-assessment to compile their BBBEE scorecard does not count as BEE procurement spend on your scorecard. (Don't know where that English did come from - Bloem?)

According to a trade and industry department guideline (issued October 2007), self-assessed scorecards will not be recognised seeing that self-assessed scoring does not provide sufficient proof of a supplier's BBBEE status (Mail & Guardian, 13 February 2008).

Make sure that your suppliers provide you with official BEE verification documentation that is valid. BEE Rating Solutions is a full member of ABVA (Association of BEE Verification Agencies) and can provide valid scorecards to you and your suppliers.  In addition, we undertake to issue your scorecard within 48 hours for an Exempt Micro Enterprise (EME) and within 5 working days for a Qualifying Small Enterprise (QSE) or Generic verification once all supporting evidence has been submitted.

For more information visit our website at http://www.beeratingsolutions.co.za/ or contact
Bernard van der Walt at
Mobile:  082 885 0991
Phone:  0861 111 233(BEE)
Fax:  086 500 2270
Email:  [email protected]

Before I say that this is a lot of deceptive bullshit crammed into one email - I'll say this.

1. BEE Rating Solutions does not put a link to the article they refer to.  And this is a serious omission because the article does not state that self rating is unacceptable.
2. They fail to mention that this is still speculative - it is based on a document that the DTI published in October.  It seems as though this document remains a draft - it is incomplete in places.

Now back to the original article.  It was written by Barrie Terblanche who is a tireless campaigner for small businesses and their rights.  It is quite strange for Barrie to have taken the stance he has - he's almost lost the fight.  But he is very clear to point out that even though the document states "when an entity have recognised B-BBEE suppliers without sufficient verified proof (i.e. valid verification certificate), all such B-BBEE spend must be deducted from the calculated B-BBEE spend. For the avoidance of doubt, a supplier letter or a self-assessed scoring system does not represent sufficient proof of a supplier’s B-BBEE status. (Only B-BBEE suppliers with verification certificate are included in the calculation of B-BBEE spend)",  the DTI still doesn't  know what they want.   
When pressed on the issue,  (DTI) BEE official Takalani Tambane told the Mail & Guardian that a self-assessed score will be recognised if it is supported by evidence. A verification agency studying the supply chain of a company will have to find supporting evidence to back up the self-assessed scorecards of the company’s suppliers. 

This last paragraph is very significant - I have written about this before.  The codes are very clear that points will only be awarded if sufficient evidence is produced (statement 000, paragraph 2.6).  This doesn't matter who conducts the assessment. 

Admittedly this does place a larger burden of proof on a self-rated certificate but the verification document in no way precludes a company that assesses itself from producing this evidence on demand. 

Back to Bernard

BEE Rating Solutions did not send this email out without consulting the powers that be at ABVA.  And Theo himself said it was OK.  I do find this strange because after my call for Theo's resignation I was told that he is a very well respected person within the verification community.  But this is plain weird.  The email is factually incorrect because the document it is based on has no official backing and is not available on the DTI's website.  Therefore the words contained in the codes take precedence.  And they do not prescribe any type of verification.

I invite any reader to comment on this post - if I am speaking kak then correct me.  I'll publish it on this blog. 

ABVA developments

ABVA is the Association of BEE Verification Agencies.  As far as I can gather rating agencies must be ABVA members in order to be accredited.  Their website was dormant for quite a while but I noticed today that it has been updated.  There is a list of rating agencies who have applied for accreditation accredited.  The good news is that there are more than 90 applicants (which includes the more popular ones). 

If you are thinking of getting a rating at the moment remember that there are NO accredited agencies, although Business Owner carried an article last month saying that ABVA members would redo the rating at no cost.  You should also make sure that they are ABVA members and SANAS accredited. 

For those who wish to become rating agencies, ABVA is holding workshops around the country (started yesterday in Pretoria, 6 Sept, 06). 

Update rating at no extra cost - Abva

ABVA is the Association of BEE Verification Agencies.  Their web site is useless and hopelessly out of date.  These guys are the body that controls rating or verification agencies and only ABVA members may verify companies.

They have their work cut out for them because there are apparently 50 of these companies operating out there, each with its own interpretation and methodologies.  ABVA is now supposed to reign them in and prescribe standards and methodologies.  Good luck I say.

There also seems to be a fair amount of heightened rating activity in the market place at the moment with these agencies attempting to drum up as much business as possible.  My advice "DON'T DO IT YET!!!!!!!!".  It's too early, the final codes aren't out yet.   We also don't know what the final definition of an exempt micro enterprise is going to be and we aren't sure whether QSEs have to be officially rated.  You might be wasting money and time.

If you find yourself forced to do it make sure they are part of ABVA - at least this provides you with an element of protection.   ABVA has announced that a free follow up rating will be provided within six months of the first rating agencies being accredited.