Progress and report on Key Projects

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WAYFORWARD
Progress and report on Key Projects
BEE UNIT 01ST august 2007
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AGENDA
ADVISORY COUNCIL
VERIFICATION
MARKETING AND COMMUNICATION
IT DATABASE
ALIGNMENT OF LEGISLATION PPPF ACT
EQUITY EQUIVALENTS

• CHARTERS

FRONTING
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CHARTERS

• FINANCIAL SERVICES CHARTER
• In the process of aligning with the Codes
• To apply for Section 9 before the end of the
  transitional period
• Have requested to retain their scorecard until
  the alignment process has been completed
• TRANSPORT CHARTER
• In the process of aligning with the Codes
• Intention is to apply for Section 12 9
  simultaneously
• CHALLENGE Progress is stifled by sub-sectors
  insisting on adopting Generic Codes as they are,
  therefore no clear indication of when gazetting
  will take place.

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CHARTERS

• AGRICULTURE CHARTER
• In the process of aligning with the Codes
• CHALLENGE Minister is trying to expedite Land
  Reform through B-BBEE Intense resistance in the
  negotiation process
• WAYFORWARD Since no solution or compromise was
  forthcoming, we advised that since they were
  gazetting under Section 12 in terms of which
  the Codes apply
• In this instance they are able to adopt the
  Generic Codes, by simply putting a rider stating
  that certain sections are likely to change - So
  that negotiations can continue

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CHARTERS

• PROPERTY CHARTER
• The Charter has been submitted to the dti for
  Gazetting under Section 12
• CHALLENGE Misunderstanding between stakeholders
  
• WAYFORWARD Expedite the Gazetting of the
  Charter,
• to provide direction

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CHARTERS

• FORESTRY CHARTER
• Launched on the 25th June 2007
• Final Round of Consultation in the Provinces
• Application for Section 12 sometime in September
  2007
• CHALLENGE Furniture retailers do not want to be
  a part
• of the Charter process as they claim they only
  account for
• 5 of business in Forestry

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CHARTERS

• HEALTHCARE CHARTER
• CHALLENGE The drafting process has been stalled
  by
• disagreement between Labour Business
• Labour wants the negotiations to be done through
  NEDLAC, but Business is opposed to this
  Business claims that they are not adequately
  represented as a Sector.

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CHARTERS

• LIQUOR CHARTER
• Liquor manufacturers Distributors are
  developing the Charter
• The Steering Committee has planned a Liquor
  Indaba for the 16th August 2007
• CHALLENGE Mainly White business is represented,
  they do not want to
• include retailers as they include amongst others
  Shebeen Owners
• Other Stakeholders not part of the process
  include CMN groups Labour
• Apparently agreement was reached with FAWU that
  business will run the
• process and that they will comment on the Final
  Draft
• Objection has been raised to include all the
  stakeholders as they state that the
• retail sector only constitutes of 10 of the
  total stakeholders
• WAYFORWARD The importance of including all
  stakeholders has been highlighted in order to
• ensure that the Charter covers the entire
  value-chain, insistence on the participation
• by the Retailers has been emphasised

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PPPFA

• Amendment / Alignment of the PPPFA
• The Working Group has finalised the PPPF
  Amendment Bill
• The 5 Core Principles of Section 217 of the
  Constitution have been included in the Amendment
  Bill
• Transparency
• Cost Effectiveness
• Competitiveness
• Fairness
• Equitability

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PPPFA

• 3 Proposals were submitted by the Working Group
• The Working Group released the Draft PPPF Bill on
  the 10th July 2007 for final consideration

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PPPFA

• The Amendment Bill proposes the following
• The Recognition levels as embedded in the Codes
  would be a requirement for the evaluation of
  Tenders, Bids and Contracts
• Organs of State would determine the minimum
  recognition level for consideration of a Bid,
  Tender or Contract
• Targets will be determined by Accounting Officers
  for Sector Codes Gazetted under Section 9 of the
  BEE Act and Statement 003 of the Codes of Good
  Practice for B-BBEE
• Evaluation Criteria will be based on price
  submitted by Bidders
• Exempted Micro Enterprises will have to
  substantiate as per the requirements in the Codes
  
• ( Audited Certificate, SARS tax clearance
  certificate or an Accredited Verification
  Certificate) stating their status
• EMEs will qualify as Level 3 Contributors as
  detailed in the Codes
• Price and Functionality will be evaluated
  separately as opposed to current requirements
• Practice Notes will be issued by NT with regards
  to

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PPPFA

• WAYFORWARD Final draft of the PPPF Amendment
  Bill will be forwarded to all Cabinet Members by
  the Minister of Finance
• Date for Cabinet has not yet been communicated
• A Strategy for alignment with other pieces of
  Legislation is being formulated

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VERIFICATION

• The following two processes have been developed
  
• Accreditation Standards
• Verification Methodology / Procedures
• The dti appointed a committee, comprised of IRBA,
  BUSA, SANAS, ABVA and a few consultants to
  develop the Verification Methodology
• The Methodology will be utilised by all
  Accredited Verification Agencies including
  Auditors, when they verify Measured Entities
• The Verification Standards and Methodology /
  Procedures have been finalised and are ready to
  be implemented
• CHALLENGE Allegedly SANAS has been instructed
  not to utilise the Methodology developed by the
  dti when assessing Verification Agencies for
  accreditation

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ADVISORY COUNCIL

• 15 potential members identified for consideration
• Required documents prepared
• Cabinet Memorandum
• Submission
• Draft Constitution
• The dti to provide Secretariat Role
• Director
• Deputy Director
• Support Staff
• WAYFORWARD Approval by Minister, State
  President and Cabinet

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MARKETING COMMUNICATION

• Two Pronged strategies identified, namely
• Short - term Marketing Communication of BEE
• Long - term Marketing Communication of BEE
• Short-Term Strategy
• Targeting Government Departments
• All National Departments
• Provincial Local Government
• KZN, WESTERN CAPE, MPUMALANGA, EASTERN CAPE,
  NORTHERN CAPE
• Aimed at educating and training Procurement
  Officers, Supply Chain Managers and all parties
  influencing the implementation of the Codes of
  Good Practice for Broad-Based Black Economic
  Empowerment

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MARKETING COMMUNICATION

• Long-Term Strategy
• Marketing Division has developed a Marketing and
  Communication Strategy for the entire dti which
  entails Public Relations, Radio, TV, Print,
  Exhibitions, Events, Launches, Conferences and
  Seminars
• BEE to be located within the broader dti strategy
• This will ensure that all Marketing and
  Communication undertaken by the dti includes
  Broad-Based Black Economic Empowerment

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EQUITY EQUIVALENTS

• The EE Secretariat and Committee has been
  established
• Clear Guidelines have been provided on the dti
  website
• One EE programme has been approved for Hewlett
  Packard to the value of 13,5 million
• CONSIDERATIONS Due to outcomes of the
  evaluations there is a change in mindset by
  Multinationals in re-opting to undertake the sale
  of Equity or Sale of Assets as prescribed in the
  Codes
• BEE Facilitators such as Private Equity Funds, to
  be considered and endorsed by the dti as per the
  Codes.
• CONCERN That Parastals not giving due
  recognition to the principle of Equity
  Equivalents (e.g. Telkoms insistence on
  ownership)

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IT DATABASE

• The Codes indicate that the dti will establish a
  publicly accessible Central Database containing
  the information underlying each Accredited
  Verification Certificate
• This Database will also provide a Self
  Assessment tool for calculating the BEE Score
• CHALLENGE Service Provider has been identified
  and appointed - in view of the dtis
  indecisiveness we are currently in breach of the
  contract
• WAYFORWARD Waiting for effecting contract
  between the dti and the Service Provider

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FRONTING

• Appropriate measures need to be considered in
  order to address the serious impact of Fronting
• Fronting is fundamental to the Codes, and hinders
  transformation
• The Codes should provide gazetted guidance on
  dealing with Fronting
• Fronting is an impediment that hinders real
  meaningful participation by Black people in the
  economy

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FRONTING

• CHALLENGE Recorded Fronting Cases, excluding
  those reported through the Fraud hotline and to
  Law Enforcement Agencies
• January 2006 December 2006 22
• January 2007 July 2007 15
• WAYFORWARD Fronting should be aligned with
  existing Legislation on fraud
• Technical Committee to be set up to deal with the
  process of legislating Fronting as a prosecutable
  offence
• The BEE Act should be amended to include Fronting
  as a prosecutable offence

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THANK YOU