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Davies says 75% of SA private sector not fully BEE compliant

6th April 2010

By: Loni Prinsloo

  

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While some strides have been made in black ownership of South African companies, broad-based black economic empowerment (BBBEE) was still showing a "lacklustre" performance, especially in the areas of enterprise and skills development, said Trade and Industry Minister Rob Davies on Tuesday.

Speaking at a media conference in Pretoria, Davies said that even though most share transactions included a BEE component, 75% of companies in the private sector were still not fully compliant.

Davies told Engineering News Online that this was mainly owing to companies using BEE scorecards as "tick-boxes", and not as a "dynamic tool" to empower and train people from ground level upwards.

"A number of companies do not consider skills development as a core-mandate, and therefore do not place enough emphasis on these sectors of the scorecards.

"Government will be looking at article 10, where we, as organs of the State, will assist with the broader implementation of BEE codes. We may consider forming partnerships with companies within the private sector to promote further enterprise and skills development in accordance with the codes."

Other challenges identified by the BBBEE advisory council on Tuesday, included the misrepresentation of BEE status, with a number of companies still fronting as being empowered, without being committed to using the scorecards as an instrument of transformation.

Further, Davies said that the recession brought on some difficulties with regard to BEE. "A number of black investors borrowed money to buy empowerment shares in companies. With the recession the value of these shares deteriorated in value."

Some R360-billion was borrowed to purchase BEE shares in companies, however, after the recession, the value of these shares plummeted to about R301-billion in value.

"Consequently, a lot of the shares in empowered hands are not really an asset at the moment.

"The department will take the advice of the council to consider further strategies to efficiently implement and monitor empowerment in the transformation efforts of South Africa going forward," concluded Davies.

 

Edited by Creamer Media Reporter

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