State’s bee policy contradictory

Van Blerk (2007-06-06) Durban – There were contradictory elements in the government’s black empowerment policy that made it difficult for companies to comply with and benefit from the requirements, Erika Petersen, an associate partner at Shepstone & Wylie Attorneys, said yesterday. Petersen, who was addressing the company’s clients on the importance of black economic empowerment (BEE), said certain requirements of the Preferential Procurement Policy Framework Act (PPPF) contradicted the BEE codes of good practice. “The PPPF, which stipulates how the State Tender Board should award tenders, has a different definition of beneficiaries when compared with the BEE codes,” said Petersen. “When awarding tenders the PPPF looks only at the ownership of the company and it does not ask for scorecards that are required in the BEE codes.” The act describes beneficiaries as historically disadvantaged individuals, which includes any female regardless of race, disabled people and anyone who did not have the vote before 1994. The BEE codes define beneficiaries as any black person, whether African, coloured or Indian, who obtained the country’s citizenship after 1993 or who was discriminated against by apartheid policies. She said this contradiction also meant that the PPPF and the BEE codes were benefiting different categories of people and, to a certain extent, excluding others who were meant to benefit in order to reduce the inequality gap. “For example, the BEE codes have a socioeconomic aspect, welfare and enterprise, which makes provision for helping charity organisations and small businesses, which is not there in the PPPF. What BEE is trying to achieve cannot happen properly with the PPPF as it is,” said Petersen. Communication director at the treasury, Thoraya Pandy said the department of trade and industry and the treasury were working out a solution to resolve the contradictions. She said they were finalising the process, which would include aligning the BEE codes with the PPPF, and an announcement would be made in due course. The final BEE codes of good practice came into effect in February and companies have been given a year to sort themselves out. Companies are not legally compelled to comply with BEE. However, not complying could have a negative effect on their business depending on who they do business with or who they want to do business with. Petersen said: “You definitely cannot do business with the government if you are not BEE compliant and the trickle down pressure system contained in the scorecard element makes it difficult not to comply. Your supplier’s scorecard is important.” She said BEE was the biggest challenge facing business in South Africa today, but it was also a great opportunity for business. The department of trade and industry was unavailable for comment yesterday.