BMF approves BEE codes, remains opposed to charters

The amended codes of good practice make for a step in the right economic transformation direction but the retention of sector charters is a disappointment, says the Black Management Forum (BMF) which will be hosting its two days national convention from today.

This comes to signal that the BMF is maintaining its hard line position with regards to black economic empowerment (BEE) despite suspicion to the contrary. This suspicion set in when a new leadership took over last year under the presidency of Bonang Mohale who replaced the radical Jimmy Manyi.

Manyi’s recent ventures and mainly his reappearance as the chief of the newly launched ANC aligned Progressive Professionals Forum (PPF) was interpreted by some as suggesting that the BMF was now a lost course to the so-called progressive movement. But some observers have maintained that it has always been a mistake to equate the ‘progressive movement’ to the ruling party, the ANC.

In any case the BMF has proved this suspicion wrong by maintaining its hard line if progressive position on BEE matters. This week’s convention will be closely watched in this regard.

About the codes, the BMF said it fully supports the strengthened codes but it was disappointed about retention of sector focused charters.

“The BMF is however concerned and disappointed that we retained sector codes, a thorny issue for us especially if sector councils are allowed to lower the bar regarding targets and weighting points for their own sector.”

The BMF has been forceful around the charter matter. It has argued that charters have thus far served as an escape route from real empowerment by critical sectors of the economy including, financial industry, mining and the ICT sector. The BMF has flagged features like the ‘once empowered always empowered always empowered’ in the financial sector charter as unacceptable. It has also previously rejected the R7.5bn principle carried in the ICT charter. This principle allows big OICT players to claim full ownership points if they do a deal valued at R7.5bn irrespective of the quantum in shares held by BEE beneficiaries.

The BMF added that “we are particularly pleased with the enhanced recognition status of small black- owned enterprises, from level 3 to level 1”.

On the introduction of priority principle the BMF said “The discounting of the scorecard due to non-compliance with priority elements is an interesting innovation, we believe will thwart selective compliance.”

“The codes are stricter and therefore forces companies to embark on serious and substantive empowerment, thus eliminating the tick box and circumvention which has been so prevalent. We applaud the reincorporation of junior management indicator, which was omitted in the draft revised Codes”.

The BMF said “We are concerned about the use of an Affidavit to evidence black ownership, this, we believe will lead to unprecedented levels of fronting. We are also concerned that medium sized black owned entities (R5-50 million) are exempted from compliance and this reduces the pool of entities that implement BBBEE and thus frustrate the achievement of a transformed society in the near future”.

We also believe that black businesses need to contribute towards socio economic transformation; skilling their employees, procuring goods and services from other small black businesses and contributing to the society at large as this is the right thing to do”.

“We look forward to the establishment the BBBEE Commission,” said the BMF.





Leave a Reply

Your email address will not be published. Required fields are marked *