The days of using broad-based black economic empowerment (B-BBEE) legislation merely as a compliance exercise are gone and South Africa needs to experience its impact on the ground, Andrew Bizzell, the chairperson of the BEE Chamber, said in an interview last week.
One of the key messages to the Chamber’s members last year and in 2023 was that companies must implement B-BBEE initiatives, which have a real impact on black beneficiaries.
“Some of the programmes we started during the Covid-19 pandemic are aligned to job creation and skills development. These include bursaries and learnerships and programmes focusing on supplier and enterprise development,” Bizzell said.
“Through the implementation of these programmes during the Covid period, we found that there is a strong need for companies to understand their responsibility which is economic growth, empowering the youth, skills development, growth of enterprise hubs – and how they can create an environment to increase the chances of employment. We have great success stories here, this is where the meaningful change and transformation sits,” Bizzell said.
The BEE Chamber was established to provide information, support, guidance, services and software to BEE practitioners in response to the introduction of the B-BBEE Commission and related interpretation and fronting practice risk.
The institution, which represents BEE practitioners, and had more than 14 000 members in 2020, said it considered 2022 as the official post-Covid19 year. This as the Covid-19 pandemic saw most businesses adopting a-work-from-home policy and finding new ways of working to survive.
“The transition and focus of returning to office full-time or ironing out work-from-home policies has taken precedence, which has delayed certain companies getting back on board with their B-BBEE strategies.
“It has also posed certain challenges such as companies that have realised that their B-BBEE plans have had to change due to them becoming smaller, therefore, impacting their B-BBEE qualifying criteria as they were large entities in the past. Should the annual turnover drop below a certain threshold, the companies would be classified as Qualified Small Entities (QSE), posing different challenges,” Bizzell said.
“After a long period of uncertainty, 2022 was a year of finding your feet again and suddenly there’s a new revived energy for 2023 with companies knowing where they stand and seeking the right information,” he said.
The BEE Chamber said it had engagements with new businesses and members to B-BBEE that were asking how to prepare with the market now stabilising after Covid.
Foreign national companies are also looking at how to structure their business in order for B-BBEE to become more economically viable and sustainable.
As B-BBEE related to access to economic opportunities, even companies that have had to reduce their budgets cannot cut back B-BBEE (programmes) as it impacted their scorecards.
Furthermore, the changing environment (legislation, potential fronting practice risks, etc) meant that the internal teams must be kept up to date and had a knowledgeable professional network to refer to, he said.
The BEE Chamber said it was also supporting transformation in a holistic way and not solely focused on the B-BBEE scorecard.
Companies needed to understand their critical role in supporting the local economy to create jobs.
“This lies in upskilling and educating the workforce and youth, and creating enterprises with success stories. We need to support small entities and empower them to grow and develop to create work, deliver great services and, ultimately, employ staff. This is a focus for the BEE Chamber this year,” Bizzell said.
Of note, in the B-BBEE Commission's National Status and Trends on Broad-Based Black Economic Empowerment released in 2020, it found that there was a general decline in performance on management control, skills development, enterprise and supplier development and socio-economic developments, with the slight increase on the ownership element.
It said economic transformation remained too static for an inclusive economy and equal society to be achieved in line with the National Development Programme targets. Both the private and public sector measured entities in the main failed to file their reports with the B-BBEE Commission as required, but more showed little improvement in their performance on average, the report said.
To improve the pace of transformation recommendations were made that the commission must enforce the adherence to Section 10 of the B-BBEE Act by all organs of state and public entities in terms of the B-BBEE Act, including pursuing cancellation of contracts, licences, incentives and other authorisations awarded without following the prescripts of Section 10 of the B-BBEE Act.
BUSINESS REPORT