'BEE charters should be scrapped'
March 15, 2005
By I-Net Bridge
While various South African industries finalise their charters in terms of the Broad-Based Black Economic Empowerment Act, attorney Kunyalala Maphisa of Jan S. de Villiers Attorneys said there was a view that the development of sector-specific empowerment charters was a mistake and they should be scrapped.
"In practice, the problems and complications in the development of BEE (black economic empowerment) plans and strategies have not necessarily arisen because of the type of industry sector a business is in, but because of the type of business structure involved," Maphisa said.
"On reflection we should rather have taken the approach of developing BEE models that weren't sector specific. Now we need to look at a solution going forward. With no disrespect to those who have laboured long and hard to develop them, the best solution is simply to scrap them."
Asked why it has taken so long for this view to be expressed, she said: "We only learn as we go along. Even the DTI (Department of Trade and Industry) was not aware of some of these things before it got to an implementation phase."
According to Maphisa, charters can be replaced by Codes of Good Practice. These, she said, can address the specific needs of various business types. The DTI is currently working towards finalising the Codes - however, the department is expected to re-open the platform for public comment.
The government should have taken the view that the implementation of BEE differed according to the nature of the business entity involved, she argued.
Maphisa touched on an example of achieving a 25 percent black shareholding and effective management in a big mining group as well as in a financial company of a similar size and structure.
"For BEE purposes, the way you address transformation will be more or less the same," she said, adding that a BEE model should have in-built flexibility to allow for various business structures. - I-Net Bridge
