The Department of Trade and Industry (the dti) to Solidarity research on Black Economic Empowerment (BEE)
The Department of Trade and Industry (the dti), has noted media reports regarding the findings of trade union Solidarity research that Black Economic Empowerment (BEE) has led to a remarkable increase in black ownership on the Johannesburg Stock Exchange (JSE), as well as ownership of insurance policies.
The dti is particularly concerned about these reports, as they do not address the issue of direct ownership which is critical when measuring level of transformation.
Department’s BEE Chief Director Ms Nomonde Mesatywa, says it appears that the survey focuses on measuring indirect ownership through pension funds, medical schemes and insurance policies, etc.
According to her, unlike the finding of Solidarity, government has conceded a maximum of 40% in terms of measuring indirect ownership.
“In relation to the Solidarity findings of 23.8% it is still far below the 40% mark in terms of the Mandated Investments Exclusion Principle, where 15% of direct ownership (unencumbered) is still required. The actual direct ownership in the JSE listed companies is still encumbered; therefore it is premature to suggest that the implementation of BEE has contributed more to the development and promotion of a black middleclass than is recognized” she said.
Mesatywa added that B-BBEE is about more than just ownership of the JSE and that other elements need to be considered.
“We need to consider the other elements like Employment Equity, Skills Development, Enterprise Development, Procurement etc as well. The effective implementation of BBBEE must be measured holistically by utilizing the Balance Scorecard of Codes of Good Practice, thus a research on one element cannot presuppose that there has been sufficient empowered and that the lives of black people across the spectrum has significantly improved.”
Last month at the inauguration of B-BBEE Advisory, Deputy President Kgalema Motlanthe, said that the pace of transformation has been painfully slow. This statement has been amplified by the recent study commissioned by Business Unity SA which revealed equality in the upper echelons of corporate SA has not yet been achieved, as Blacks and women continue to be under-represented in all directorships and top executive leadership positions of the JSE-listed companies.
The department is in a process of conducting a follow-up on the B-BBEE baseline study that was initially done for 2007/8 to measure the impact of B-BBEE since the gazetting of the Codes of Good Practice three years ago. The outcome of this study will cover all the elements of the Codes of Good Practice in all the sectors of the economy.