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While certain business representative bodies have thrown their weight behind government's initiative to create a class of black industrialists within the next three years, black economic-empowerment (BEE) advisory firm EconoBEE believes that the related matter of suggested changes to the BEE certification process will be a step backward.
Engineering News Online reported on Thursday that the Department of Trade and Industry (DTI) intended to make sweeping changes to BEE certification processes and preferential procurement policy to assist in the creation of a class of black industrialists and accelerate “radical” transformation in the South African economy.
This would see the DTI do away with agencies that were accredited to grant BEE ratings and certificates, saying the power to issue certification would soon shift to the DTI exclusively, after which these companies would fulfil an advisory function on BEE policy.
Deputy Minister of Trade and Industry Mzwandile Masina argued at a Black Industrialists Stakeholder Engagement Session that such agencies sought to undermine the State’s transformation agenda by indiscriminately issuing BEE certification.
While Masina’s proposal received fervent support from the Black Business Council, Business Unity South Africa, the BEE Charter Council and the State Owned Enterprise Procurement Forum, EconoBEE CEO Keith Levenstein said it was a “ridiculous” attempt by government to solve a genuine problem.
“The purpose of verification is to give confidence in any entity's BEE status level. We have complained hundreds of times and written numerous articles highlighting that different agencies, even different people in the same agency, award vastly differing points.
“We have asked the DTI many times to issue guidelines and to take action against inconsistent verifications, errors, interpretations and fronting. They have not done so. Where they have issued guidelines, they invariably got it wrong,” he noted.
According to Levenstein, BEE verification was “failing” as a result of inconsistencies within the DTI.
“The solution is not to get the DTI to start issuing BEE certificates, it is to get the verification industry to operate properly. The DTI is responsible for appointing and managing the regulators of the verification industry and this they have also failed to do,” he commented.