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BEE News Report
Zuma’s team moots BEE overhaul
Sandile Zungu, the chairman of the BEE advisory council’s sub-committee on ownership and management control, said last week that its members were debating whether to remove the partial exemptions given to qualifying small enterprises – those earning revenues between R5 million and R35m – in the 2007 BEE Codes of Good Practice.
“We as a council are looking at those issues that stymie the growth of the small and medium enterprise sector. For example, we are asking why they must choose only four criteria out of seven,” he said.
A qualifying small enterprise may select four out of the seven elements (ownership, management control, employment equity, skills development, preferential procurement, enterprise development and socioeconomic development) to develop its own scorecard. Even if it completes more than four categories, only the four best scores are used.
Businesses with revenues below R5m a year are not required to complete a scorecard.
Zungu said: “What does it do to the deepening of BEE when most of the qualifying small enterprises can say ‘Well, we’re not interested in ownership or management control’? Most enterprises in that category are not women-owned… or black-owned. And they still get the highest rating because they are exempt from that requirement.”
The council is examining whether to lower the revenue threshold and prescribe some criteria as a bare minimum. Zungu said the council had been “hard at work” addressing concerns the president had alluded to at his annual Christmas party in Nkandla last week. Zuma called for a debate on the meaning of BEE, whose definition he believes has been narrowed.
Black Management Forum president Jimmy Manyi subsequently welcomed a review, saying ownership and management control were assumed to define BEE at the expense of the other five elements of the scorecard.
Manyi called for the proper allocation of score points to prevent the slide into a box-ticking exercise. Regarding the council’s proposals on broadening BEE, Zungu said development finance institutions should give broad-based entities access to funding so they could acquire equity.
New BBBEE structure to be implemented at copper producer
The process of the new BBBEE transaction began in 2008 and, following the board of directors and parent company approvals, it was submitted to the Department of Mineral Resources (DMR) along with the application for the conversion of the mining rights in April 2009. Once the structure has been approved by the DMR, PMC will begin implementing it.
Included in the structure is a new entity, known as Palabora Copper (PC), which PMC acquired (as a shelf company) as a wholly owned subsidiary of PMC up to the date of implementation, at which time the black-economic empowerment (BEE) partners will subscribe for 26% of the shares in PC. PMC will sell the entire business (assets and liabilities) to PC and the transaction will be vendor-funded on an interest-bearing loan account.
Continued on the Mining page
ACTOM acquires specialist air conditioning engineers and contractors company Luwa SA
The acquisition was concluded in January and is effective from the 1st of February 2011. Luwa SA was established in South Africa in 1971, this year marking their 40th anniversary. Luwa is one of the leading and oldest players in the industrial ventilation and air-conditioning solutions environment and offers design, manufacture and installation capabilities. Luwa SA is based in Pinetown and Brackenfell.
Paul Cuthbert, Managing Director of ACTOM’s Power Conversion Division, said the acquisition complements the group’s activities in the air movement, air pollution and dust control markets and further reinforces the group’s commitment to investing in quality South African engineering companies aligned with its market focus.
Continued on the Construction page
Ford and Gauteng launch R100m initiative to develop black-owned suppliers
The investment saw the establishment of South Africa's first automotive broad-based black economic-empowerment (BBBEE) incubation facility, as well as a production simulator, which would be used to augment Further Education and Training and other tertiary education institution's technical capability in Gauteng.
Gauteng development agency Blue IQ CEO Amanda Nair said that the incubation centre at the vehicle manufacturer’s plant in Silverton, Pretoria, would provide five BBBEE entrepreneurs the opportunity to enter the automotive component market through professional support and growth opportunities.
Continued on the Corporate page
City Lodge Hotels gets level 3 BBBEE status
Continued on the Tourism page
BBBEE - Gloves Off. Lets tell the truth!
Over the past few weeks a number of journalists and commentators have sliced, diced and packaged broad-based black economic empowerment (BBBEE) in much the same fashion as they would prepare a product for sale to the public. Printed on each package, was its own specific user manual and cautionary warning in fine print, then each was displayed on the shelves of Moneyweb for public consumption. Some products were brightly decorated and processed products which looked inviting, while another just had a plain wrapper and offered a natural organic product.
The public (readers) checked the products, read the literature, sampled each package and then made their decision. The brightly coloured, processed products drew the most attention and received most criticism, but sadly only resulting in one or two sales. The plain package containing the natural organic product drew little interest. Any good marketing person will confirm that great packaging sells a product. However, after the wrapper has been removed, it's the product that is tasted. If it tastes bad, the product will fail to attract regular buyers. The BBBEE analogy is pretty close. It looks good, but tastes horrible!
Continued on the Corporate page
