[Opinion] Anthea Jeffery: Ratcheting up the BEE rules, yet again

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TrelliPaste

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"By the end of this month – less than a fortnight away – the Department of Trade and Industry (DTI) plans to gazette the final version of the draft Broad-Based Black Economic Empowerment Regulations (the regulations) it published in mid-February 2016 for comment within 30 days.

Few commentators seem to realise just how damaging the regulations are likely to be. Hence, a mere 21 submissions were made to the DTI, so helping the department to brush away the concerns that were raised.

Perhaps the 500 or so individuals and organisations that made submissions on the draft generic codes in 2012 – only to see their views almost completely disregarded in the final version gazetted in 2013 – no longer believe that the DTI’s public consultations are intended to be meaningful.

The regulations are supposed merely to flesh out the provisions of the Broad-Based Black Economic Empowerment Amendment Act of 2013 (the BEE Amendment Act), which came into force in 2014.

However, in some respects they go further and are thus ultra vires the BEE Amendment Act. Worse still, they will expose business to ever more bureaucratic demands while increasing uncertainty about BEE requirements.

For example, the BEE Amendment Act gives a new Broad-Based Black Economic Empowerment Commission the capacity to ‘maintain a registry of major broad-based BEE transactions’ above a value specified by the minister.

Yet, according to the regulations, the Commission will also be allowed (despite the absence of any statutory authority for these additional powers) to ‘assess’ a relevant transaction ‘at any time’ so as to ‘determine its adherence’ to BEE rules. It will further be empowered to demand that ‘steps be taken to remedy the transaction within a reasonable period’."
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http://www.fin24.com/BizNews/anthea-jeffery-ratcheting-up-the-bee-rules-yet-again-20160421

What hope do we have>
 
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So, does this mean an investor could invest in a company, make a success of it, only to be told years later by the "Commission" that, sorry, your transaction was invalid? In which case, they have just magnified investment risk by an order of magnitude in one fell swoop.
 
TrelliPaste said:
"By the end of this month – less than a fortnight away – the Department of Trade and Industry (DTI) plans to gazette the final version of the draft Broad-Based Black Economic Empowerment Regulations (the regulations) it published in mid-February 2016 for comment within 30 days.

Few commentators seem to realise just how damaging the regulations are likely to be. Hence, a mere 21 submissions were made to the DTI, so helping the department to brush away the concerns that were raised.

Perhaps the 500 or so individuals and organisations that made submissions on the draft generic codes in 2012 – only to see their views almost completely disregarded in the final version gazetted in 2013 – no longer believe that the DTI’s public consultations are intended to be meaningful.

The regulations are supposed merely to flesh out the provisions of the Broad-Based Black Economic Empowerment Amendment Act of 2013 (the BEE Amendment Act), which came into force in 2014.

However, in some respects they go further and are thus ultra vires the BEE Amendment Act. Worse still, they will expose business to ever more bureaucratic demands while increasing uncertainty about BEE requirements.

For example, the BEE Amendment Act gives a new Broad-Based Black Economic Empowerment Commission the capacity to ‘maintain a registry of major broad-based BEE transactions’ above a value specified by the minister.

Yet, according to the regulations, the Commission will also be allowed (despite the absence of any statutory authority for these additional powers) to ‘assess’ a relevant transaction ‘at any time’ so as to ‘determine its adherence’ to BEE rules. It will further be empowered to demand that ‘steps be taken to remedy the transaction within a reasonable period’."

http://www.fin24.com/BizNews/anthea-jeffery-ratcheting-up-the-bee-rules-yet-again-20160421

What hope do we have>
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You should know by now to add the opinion tag to pieces like these...
 
The ANC does not care about the negative outcomes. They only care about appeasing voters.
 
My sweet deity, I hate BEE with a passion.
If I could get rid of 3 aspects of my work load it would be BEE, SARS compliance, and Third Party company certifications.
What an utter waste of time.
 
LazyLion said:
My sweet deity, I hate BEE with a passion.
If I could get rid of 3 aspects of my work load it would be BEE, SARS compliance, and Third Party company certifications.
What an utter waste of time.
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You can add add FICA and RICA to that list.
 
Ah yes "public consultations". They mean less than an email from an Nigerian prince. It's simply a tick box in the SAP system for public entities. There's no legally binding step after that.

"Did you conduct a public participation meeting?" - Yes. Done. Look at the eTolls etc.
 
As Nigerian billionaire Aliko Dangote warned in 2013, even a 25% BEE ownership requirement is enough to deter FDI. In his words, a BEE ownership requirement is like ‘a forced marriage’, in which a business must partner with ‘someone who may not have the same appetite’ and ‘who does not have the equity behind them’ to make a real contribution.

Adds Dangote: ‘The whole world needs capital. If you make it difficult for me to invest in one country, then I will move my capital somewhere else where it is easier to invest… In Nigeria, we used to have these laws demanding that any [foreign] investor had to have a Nigerian partner. But that just dried up the capital flows. Now anyone can do business with anyone in Nigeria.’
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...and we wonder how Nigeria could possibly have overtaken SA as the African power-economy. :whistle:

Make no mistake people, this is all about the ANC pleasing the people who keep them afloat financially. This will cost us all dearly.
 
As much as I hate BEE, this looks more like a bumbling attempt to deal with state capture/corruption than anything else.
 
The new BEE regulations are a huge farce and are going to have no actual affect on benefiting the man on the street. It is going to hinder employment and I cannot see it doing any good for the economy.

instead of focusing on the stick method, The government should rather implement a carrot method by using tax cuts or reliefs to companies based on their PDI ownership % and the amount of PDI staff members they have. It should also be based on how much income your company makes, so even rich 100% black owned companies can contribute to the growth of the economy and the uplifting of the smaller black entrepreneurs while the tax relief will be most generous on SMME black owned companies.
 
ISP cash cow said:
The new BEE regulations are a huge farce and are going to have no actual affect on benefiting the man on the street. It is going to hinder employment and I cannot see it doing any good for the economy.

instead of focusing on the stick method, The government should rather implement a carrot method by using tax cuts or reliefs to companies based on their PDI ownership % and the amount of PDI staff members they have. It should also be based on how much income your company makes, so even rich 100% black owned companies can contribute to the growth of the economy and the uplifting of the smaller black entrepreneurs while the tax relief will be most generous on SMME black owned companies.
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You really think the ANC cares about the average man in the street?
 
True situations:

Friend has an IT company. Part of the BEE rating requirement was social investment. Turned out to feeding kids. At this stage 200 kids get two good meals a day (they happen to be black). New rules makes that moot. Suddenly he is in a position where because of his colour, his has to, as a sole owner, either give 51% of his company away, or scale down. The 200 kids will need some other source of revenue for their daily meals.

BEE Business size is based upon turnover. But, that leads to inflation. Try moving in the market running a mom & pop shop at a low percentage profit. Suddenly you have to up the profit margin just to survive, but then you run into the turnover margin.
 
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