Media statement on the Ministerial Briefing regarding Broad Based Black Economic Empowerment (BBBEE)
28 November 2008
Broad Based Black Economic Empowerment BBBEE Post Transitional Period
Since the gazetting of the Codes of Good Practice in February 2007, considerable progress has been made in the implementation of BBBEE. The period post 31 August 2008 effectively marked the unconditional application of the Codes throughout the economy.
Today, 28 November 2008, the Minister of Trade and Industry (DTI), engaged key stakeholders, including Business Unity South Africa (BUSA), Black Management Forum (BMF), Chamber of Mines, Labour, Civic Society and Industry Associations, amongst others, and briefed the media on the progress made towards the implementation of BBBEE. The closed session is being held at the Council for Scientific and Industrial Research (CSIR) Convention Centre, in Pretoria.
Via the ministerial briefing, the DTI hopes to respond to a number of uncertainties and concerns that have recently been highlighted in the media and elsewhere, regarding the BBBEE policy.
In keeping wit the department's aim to raise awareness of BBBEE implementation among stakeholders and the public, the following represents a synopsis of important milestones achieved in this regard:
* Black Economic Empowerment (BEE) Advisory Council
The Presidential Advisory Council on BEE is a key and strategic institution that seeks to provide guidance and overall monitoring of the performance of BBBEE across the economy. In particular, the council will, among other responsibilities, make policy recommendations to address challenges confronted during the implementation phase, and review progress in achieving BBBEE.
The process of identifying, vetting and selecting potential candidates to serve on the BEE advisory council has been finalised and the minister is expected to make an announcement to this effect.
BEE information technology (IT) portal
The DTI launched the BBBEE IT portal in September 2008. This virtual innovation is the nation's first ever interactive and publicly accessible information technology site, which features a variety of user friendly tools to assist companies in understanding and completing their BBBEE status self assessment.
It enables business to network with local investors and seek new business opportunities. The portal will also be used by the DTI to manage reported cases of fronting, information management and B-BBEE advocacy. In particular, this will ensure that the DTI provides the market with the overall status of BBBEE as part of reviewing progress made.
Various stakeholders, including Verification Agencies (VAs), state owned entities, Charter Councils and the general public will be able to feed information into the portal. This portal will also link to provincial governments and state owned enterprises and various industry associations to ensure value addition for those that have registered on it. Since its inception, more than 1 000 companies have registered on the website.
BBBEE verification is an important aspect of measuring progress on the implementation of BBBEE. To this end, the DTI launched and gazetted the Verification Manual on 18 July 2008. The objective of the manual is to outline the procedures to be followed in providing assurance on whether the requirements and objectives of the Codes have been met. The verification manual is also utilised as part of the accreditation process.
Accreditation of Verification Agencies by South African National Accreditation System (SANAS)
In ensuring that there is uniformity and credibility of VAs, the DTI mandated the SANAS to conduct the accreditation process. Although this process is still marked with delays, there has been significant progress in accrediting these Agencies.
There are presently 75 VAs that have applied for accreditation. All the applicants are currently at various stages of the accreditation process, which comprise the following:
The process of document review entails
Compliance with the accreditation standards (R47), requirements and guidance documents. A report on non-compliance or areas where actions are needed will be issued to the VA. There are 51 VAs that are still in the process of correcting their documents.
The pre-assessment is carried out at the central office of the VA to:
* discuss any findings related to the documentation
* seek further information on the verification system
* briefly examine the systems that have been established and
* discuss any arrangements that have been made to include multiple locations, and
* determine whether any further technical assessors will be required.
After pre-assessment, the VA may need to make changes to its policies, procedures and programmes prior to SANAS acknowledgement that the organisation's documented systems comply with the requirements of R47.
The BBBEE assessment must be conducted at central including multiple offices. This also entails the witnessing of application of the Verification Manual. Sixteen (16) VAs are in the process of final assessment. It is anticipated that the approval process will be completed by January 2009.
Alignment of Preferential Procurement Policy Framework Act PPPFA and BBBEE Act
The DTI has done considerable work to advance the objectives of BBBEE within the preferential procurement system, to ensure that preference is given to BBBEE compliant entities in the procurement of goods and services. This, to enhance transformation in the South African economy.
The Preferential Procurement Policy Framework Act (PPPFA) is prescribed by National Treasury, which employs percentage points to score bidding service providers, to empower Historically Disadvantaged Individuals (HDIs), women equity ownership and physically challenged. What remains now is for the National Treasury to complete the work of amending the Act.
The Sector Charters play a pivotal role in transforming the economy, thereby assisting in achieving government’s growth and employment objectives, in particular, by addressing sector-specific peculiarities.
Five (5) Sector Charters were submitted before the end of the transitional period, all of which were vetted, analysed for compliance and recommended for gazetting. These are Forestry, Construction, Financial Sector Charter (FSC), Transport, Media and Communication (MAC) and Tourism.
The DTI intends to finalise the charter processes by the end of March 2009, and will continue to play both a strategic and technical role in guiding these charters and others to advance the objectives envisaged in the BBBEE Act and strategy.