THE DA has launched our proposed amendments to the broad-based black economic empowerment framework. Our suggestions are designed to make B-BBEE work better more fairly for many more people.
The need for B-BBEE is clear. During apartheid, racial separation was South Africa's defining characteristic. Black people were subjected to ruthless "asset stripping" and restrictions.
South Africa must continue on the journey towards achieving social and economic justice for all.
To achieve this, we need to make careful interventions. This process can be described as "redress": putting right the wrongs of the past.
The problem is that the noble aim of B-BBEE is being undermined by a number of factors. We have read about many of them in this newspaper: a "get rich quick mentality" among some B-BBEE tenderers; the emergence of "fronting"; the rise of 'tenderpreneurs'; and the fact that some B-BBEE beneficiaries do not feel a need to create opportunities for others.
We will support legislation designed to prohibit and punish fronting, as well as strict penalties for those found guilty of fronting. Fronting is a criminal offence.
It is right that the codes of good practice are being aligned with procurement regulations, which informs the processes by which goods and services are obtained. The empowerment status of businesses vying for government business must be determined on the basis of B-BBEE criteria.
Until now, the ownership part of the empowerment scorecard has been over-emphasised by the government. This has been to the detriment of other B-BBEE criteria, which have the potential to increase economic opportunities and job creation.
We will propose increasing the weighting of the socio-economic development component of the scorecard, and push for points to be awarded for job creation.
The DA's alternative scorecard would support job creation through the DA's proposed youth wage subsidy programme.
As it stands, the scorecard for skills development only awards points for the number of black employees participating in learnership programmes. These are offered through the Sector Education Training Authorities (Setas). Yet Setas have proved to be ineffectual in boosting skills development.
Instead, we will propose extra recognition for "black new entrants" taking part in ownership equity (money invested) programmes.
The ownership part of the scorecard currently awards only two bonus points for deals that benefit individuals who have not previously held ownership in other businesses.
These points should be increased, while reducing the limit for individuals qualifying as "black new entrants" from the current R20-million, which we believe is too high, and enables the already empowered to acquire more equity, at the expense of those who have yet to access the benefits of B-BBEE. This will bring in lots more people. And it would help reduce the "re-empowerment" of those who have already been rewarded by B-BBEE.
There should be a cap on the cash value for individuals and companies participating in B-BBEE deals. This will not hold back black entrepreneurs. Rather it will evaluate how their participation has contributed to broad-based empowerment.
The DA's approach is a joined-up one. For broad based-BEE to succeed, millions of poor and unemployed black South Africans must benefit from it, rather than a politically connected few.
- Mazibuko is the DA's parliamentary leader
A process to put right the wrongs of the past
THE DA has launched our proposed amendments to the broad-based black economic empowerment framework. Our suggestions are designed to make B-BBEE work better more fairly for many more people.
The need for B-BBEE is clear. During apartheid, racial separation was South Africa's defining characteristic. Black people were subjected to ruthless "asset stripping" and restrictions.
South Africa must continue on the journey towards achieving social and economic justice for all.
To achieve this, we need to make careful interventions. This process can be described as "redress": putting right the wrongs of the past.
The problem is that the noble aim of B-BBEE is being undermined by a number of factors. We have read about many of them in this newspaper: a "get rich quick mentality" among some B-BBEE tenderers; the emergence of "fronting"; the rise of 'tenderpreneurs'; and the fact that some B-BBEE beneficiaries do not feel a need to create opportunities for others.
We will support legislation designed to prohibit and punish fronting, as well as strict penalties for those found guilty of fronting. Fronting is a criminal offence.
It is right that the codes of good practice are being aligned with procurement regulations, which informs the processes by which goods and services are obtained. The empowerment status of businesses vying for government business must be determined on the basis of B-BBEE criteria.
Until now, the ownership part of the empowerment scorecard has been over-emphasised by the government. This has been to the detriment of other B-BBEE criteria, which have the potential to increase economic opportunities and job creation.
We will propose increasing the weighting of the socio-economic development component of the scorecard, and push for points to be awarded for job creation.
The DA's alternative scorecard would support job creation through the DA's proposed youth wage subsidy programme.
As it stands, the scorecard for skills development only awards points for the number of black employees participating in learnership programmes. These are offered through the Sector Education Training Authorities (Setas). Yet Setas have proved to be ineffectual in boosting skills development.
Instead, we will propose extra recognition for "black new entrants" taking part in ownership equity (money invested) programmes.
The ownership part of the scorecard currently awards only two bonus points for deals that benefit individuals who have not previously held ownership in other businesses.
These points should be increased, while reducing the limit for individuals qualifying as "black new entrants" from the current R20-million, which we believe is too high, and enables the already empowered to acquire more equity, at the expense of those who have yet to access the benefits of B-BBEE. This will bring in lots more people. And it would help reduce the "re-empowerment" of those who have already been rewarded by B-BBEE.
There should be a cap on the cash value for individuals and companies participating in B-BBEE deals. This will not hold back black entrepreneurs. Rather it will evaluate how their participation has contributed to broad-based empowerment.
The DA's approach is a joined-up one. For broad based-BEE to succeed, millions of poor and unemployed black South Africans must benefit from it, rather than a politically connected few.
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