Minister of Minerals and Energy Phumzile Mlambo-Ngcuka has called on successful black professionals and business people to create footholds and meaningful benefits for others through broad-based black economic empowerment (BEE) deals and relationships.
“We don’t want people to go into the boardrooms and blend in … This is not a time to fit in. You are a generation that must change the paradigm,” she said. “I’m not talking about being anarchists. It is obviously meaningful engagement that also adds value to the company.”
The minister was speaking at a three-day BEE workshop hosted by the state-owned petroleum oil and gas corporation, PetroSA, in Cape Town.
Describing broad-based BEE as “inclusive capitalism”, which showcased globalisation as a phenomenon that could work for everyone, Mlambo-Ngcuka cautioned that job creation remained a key challenge and buyouts did not necessarily translate into jobs.
Businessman and former BEE Commission chairperson Cyril Ramaphosa said black economic empowerment was becoming entrenched in the country’s economy. Though some were “yapping like dogs at the caravan” BEE was a fact of life. “This caravan, like our democracy, is not going to stop.”
He welcomed the Broad-Based Black Economic Empowerment Bill, currently before Parliament, as “very progressive”.
A stumbling block in the Bill, which MPs got to grips with this week, remains the relationship between it and the government’s strategy document that sets out, among other things, the aims and percentages of BEE components and a scorecard.
That document was released shortly after President Thabo Mbeki announced in February’s State of the Nation speech that BEE was a key government policy to qualitatively transform economic ownership patterns.
The Bill, an enabling legislative framework for the government’s BEE policy, allows the minister of trade and industry to promulgate codes of practice outlining broad-based BEE in various sectors. These would set out indicators of BEE, the interpretation and definition of BEE, and guidelines for sectors to draft sectoral transformation charters.
African National Congress MP Desmond Lockey urged Department of Trade and Industry officials to include the strategy document goals as a schedule to the Bill to create legal certainty around broad-based empowerment.
He said the current phrasing, that BEE would be “taken into account” in procurement, licensing and regulation, gave the impression that “nobody is bound by the process”. It also suggested those companies that had not taken BEE on board could still compete in procurement and other state-controlled processes.
Threats of litigation were insufficient reason to dilute the proposed legislation, he said.
The Bill has been revised since business, labour and MPs criticised the initial draft as too vague and limited during public hearings earlier this year. Tuesday’s discussions at the parliamentary trade and industry committee will now be taken on board as the Bill is again tightened.
Among the changes is a two-yearly reporting requirement on government departments’ and parastatals’ progress in implementing broad-based empowerment.
Department of Trade and Industry Deputy Director General Lionel October said it was important to iron out potential inconsistencies. These included the code of practice for procurement, which cannot contradict existing preferential procurement legislation.
The definition of broad-based BEE has been strengthened to include rural residents, local communities and youth as beneficiaries. Further attention would also be paid to the inclusion of women, department officials pledged.
More light was shed on composition of the presidential advisory body, the BEE Advisory Council, established under the Bill. The president, who is part of the council, appoints four Cabinet ministers and, after consultations, between 10 to 15 members from sectors including labour, business, community-based organisations and academia.
The Department of Trade and Industry is expected to table a revised Bill at the next committee meeting on August 20, after which the legislation is expected to be quickly finalised.
Committee chairperson Rob Davies said the Bill, once it took effect, would accelerate empowerment. “It already had an impact. We have seen, in the course of the Bill’s process, there have been quite a number of empowerment deals. Already the climate [for BEE] has been created,” he said.