‘If you remove the South African context, BEE is really about a company being a responsible citizen in the environment in which it operates,” says Andile Tlhoaele. ”In South Africa, we incentivise you for doing that.”
Tlhoaele, the chief executive of verification agency Inforcomm, a director of the Association of BEE Verification Agencies and a member of the ICT Charter steering committee, is unsurprisingly bullish on BEE.
Because of worldwide interest in triple-bottom-line reporting, with its accompanying emphasis on sustainability, international corporates wanting to invest in South Africa have responded well to local empowerment policies, he says. ”One of the benefits is that if a company understands BEE, you will be able to do business anywhere in the world. You will understand the need for empowerment, whether economic, social or environmental. Your assets will be protected because the community will see you as one of its own citizens.”
Tlhoaele is critical of the perception that BEE is a policy that enriches the few, pointing out that the equity component of the BEE Codes of Good Practice accounts for only 20 points, with other criteria scoring 80 points. ”Why focus on the 20 points?” he asks. ”To benefit from those 20 points is not easy, but [other criteria] carry an immediate benefit.” Points for employment equity, skills transfer, black entrepreneurship, among others, are much easier to obtain.
”As time goes on people will say that it’s not as bad as we thought. It could be the best implemented policy of any country,” he says. His industry is at the heart of successful implementation. ”If you can’t prove your BEE status, you can’t benefit from it.”
For a policy to be successfully implemented, it must be measureable, which is where the verification agencies come in. They offer ”credible, traceable, consistent” interpretations of BEE. ”How are we going to measure BEE if we don’t have the tools?”
A certificate of BEE compliance means that a company’s BEE status can be verified once a year, by external evaluators, removing an administrative burden from companies, which would otherwise have to fill in duplicate paperwork for all their clients, and saving resources in the long term. ”It’s work you don’t have to do.”
Tlhoale concedes that BEE ÂÂverification adds an extra layer of cost to companies, but says it’s a cost that enables trade. ”It allows you to do more business.” The market hasn’t caught up yet with the concept of verification as a trade tool, as the Codes of Good Practice were gazetted only this year, but he says about 60% of large corporates which do business with government or state-owned enterprises have been verified already, or are being verified.
He describes the Codes of Good Practice as ”not enough, but at the same time it’s something we can live with. It’s a compromise document, which is the nature of South Africa. Companies need to grow and BEE needs to be implemented. It’s for industry to implement the codes to the letter — I wouldn’t want to see the measures get tighter.”
He wants to see more private companies offering tenders. ”If you’re benefiting from BEE, you need to open up for the sake of transparency and fairness. That’s what government has done. You need to extend the same terms that were extended to you. We need to get people at a low level to see BEE as a benefit, which enables trade with private companies.”
BEE is a growth tool, Tlhoale says. ”It’s not designed to eliminate growth, which comes mainly from small and medium companies, along with job creation, and it’s also not designed to kill large corporates. A white company with turnover of less than R5-million [has automatic level 4 BEE status]. How do you think black people feel about that?”
He recognises, too, that BEE is a work in progress. ”The more we embrace it, the more we’ll realise its challenges and give effect to the next version. It offers clear measurement guidelines; verification just makes it happen.”