Presentation to: PORTFOLIO COMMITTEE: TRADE AND INDUSTRY

Old Assembly Chamber, Old Assembly WingWednesday 13 March 2013 (09:35 - 10:05)

Black Economic Empowerment Challenges for BBBEE & Management Key Principles of BBBEE BBBEE Legislation Government’s BBBEE Strategy BBBEE Bill [B42-2012] Input

Input into Function Input into Form

Appendix A: Background - Legislation and the Disability Applicability

Appendix B: The Challenges facing the Disability Sector in the South African Financial Services Sector

Appendix C: Income Distribution of People with Disabilities

Recommendations Questions & Answers

“Black advancement” is a means of

empowering blacks both to develop

the skills and abilities to

Successfully fill higher-level

positions and to take

control of resources.

Linda Human

Black Economic Empowerment (BEE)

Legacies of colonial and apartheid

disempowerment of black majority

Vast racial inequalities in distribution of and

access to wealth, income and skills

Restricted economic potential and contribution

of black people to growth and development:

limited ability to expand productive base of

the economy

Rationale for BEE in South Africa*

Challenges for BBBEE & Management (1)

A Strategy “To bring about a structural change that

will

ensure that the participation of black citizens in the

economy is commensurate with their demographic

dominance” (DTI, 2002)

Definition of BEE *

Challenges for BBBEE & Management (2)

BEE Commission (2001):

Socio-economic process

Aimed at redressing imbalances of the past

Substantially and equitably conferring and transferring

ownership, management and control of financial and economic / resources

To ensure broader and meaningful participation in the economy by black people

Achieve sustainable development and prosperity

- Definition of BEE (cont.)*

1. Black Economic Empowerment is broad-

based.

2. Black Economic Empowerment is an inclusive

process.

3. Black Economic Empowerment is associated

with good governance.

4. BEE is part of our growth strategy.

“In the end the individual will be responsible for his or

her well-being. It is through the propagation of this

kind of ethos that we will be able to avoid the

development of a culture of entitlement which is

another form of dependency”

(W Nkuhlu)

Lab

our

Rel

atio

ns A

ct

Em

ploy

men

t Equ

ity

Act

Ski

lls

Dev

elop

men

t Act

Bas

ic C

ondi

tion

s of

Em

ploy

men

t Act

Pre

fere

ntia

l Pro

cure

men

t P

olic

y F

ram

ewor

k A

ct

Pro

tect

ed D

iscl

osur

es A

ct

Pro

mot

ion

for

Acc

ess

of I

nfor

mat

ion

Act

11

The Poverty Barrier

The Skills Barrier

The Business Barrier

The Opportunity Barrier

EmploymentEquity/Job creation

CorporateSocial Investment

Skills Development & Employment Equity

AffirmativeProcurement

OwnershipAnd Management

Equitable Economic Opportunities

EnterpriseDevelopment

Emerging black middle class & Investors

Black entrepreneurs

Black workers and job-seekers

Black unemployed & rural poor

Broad Based Beneficiary Base

Page 3 Section 1. (c) Add in the definition of broad-based black economic empowerment "This would include black women, black workers, black youth organised and registered groupings, black people with disabilities and black people living in rural areas".

  Page 3 Section 1. (c) (e) after local content procurement; and "with the

careful screening of BBBEE enterprises that has the full application of an economic benefit for black women, black youth, black people with disabilities and black people living in rural areas".

  Page 4 Section 2 (b) (g) Add after informal business sector “and "black

people with disabilities.  Page 4 Section 2 (c) (h) Add after increasing effective black owned ";

black women-owned and black disabled people owned.“  

Page 5 Section 7 (b) after black owned and managed enterprises "particularly black women; black disabled people and black people living in rural areas;"

  Page 7 Section 13F (e) after broad-based black economic

empowerment managed by black people; "particularly those of black women; black disabled people and black people living in rural areas;".

  Page 7 Section 13I (1) Add after performance of its functions "; for

example in areas around rural and urban economic opportunities to black people; economic opportunities for black women; and economic opportunities for black people with disabilities."

  Page 9 Section 13I (b) (ii) Add after designated by the

Commissioner "(iii) be represented on the basis of race, gender, and disability;"

Page 4 Section (g) Add after sector charters "That those companies; and or individuals that are found guilty of fronting, be sanctioned by their names; and or those of their companies be put onto a public "white list" or register.

This list shall or register indicate to all organs of state whom not to do business with; i.e. the procurement of goods and services from such entities found to be on this list or register;

This list or register shall be reviewed by the Department of Trade and Industry on an annual basis.“

Page 4 Section (g) Add after sector charters "That those companies; and or individuals that are found guilty of fronting, be sanctioned by their names; and or those of their companies be put onto a public "white list" or register.

This list shall or register indicate to all organs of state whom not to do business with; i.e. the procurement of goods and services from such entities found to be on this list or register;

This list or register shall be reviewed by the Department of Trade and Industry on an annual basis."

  Page 5 Section 9. (b) (e) after codes of good practice for their

sector "and that the progress of these charters and codes of good practice be reviewed every 3-5 years;“

Page 6 Section 13 (b) iii Add after public entity may have "(c) Shall by being publicly published a "white list" which shall include all enterprises, legal entities, companies, in whatever form and individuals who are found guilty of committing "fronting".

"(d) Shall be precluded from providing any procurement of goods and services for a period of 10 years; OR any other punitive fines as deemed reasonable by the Ministers of Finance and Trade & Industry and in consultation with the BBBEE Commission“.

Page 7 Section 13F (h) after broad-based black economic empowerment and "and thereby holding these organs of state accountable (i.e. Including their Performance Management Contracts); whether it be a CEO; CFO; COO; an Executive Chairman; a Deputy Director-General; Director- General; Deputy Minister and Minister;”

 

Page 7 Section 13G (b) (3) after Add new point "(4) These reports be published in the public domain and that the appropriate monitoring and evaluation mechanisms are put in place to hold the management; directorships; accounting officers and political heads accountable, responsible and if need be to recommend disciplinary measures and sanction against these individuals;"

 

Legislation 1: South African Constitution of The Republic of South Africa (Act No. 108 of 1996) - Chapter 2: Bill Of Rights

Legislation 2: Equality Legislation Promotion of Equality and Prevention of Unfair & Discrimination Act (Act No. 4 of 2000)

Legislation 3: Empowerment Legislation - Broad-Based Black Economic Empowerment Act (Act No. 53 of 2003)

Legislation 4: PIC Legislation as an Example for Disability Empowerment - No. 23 of 2004: Public Investment Corporation Act, 2004.

United Nations Convention on The Rights of Persons with Disabilities Article 27 - Work and employment

The intent of the Financial Services Charter (FSC) should be converted to implementation by amongst others, the PIC, NEF, IDC and other Financial Sector Role Players.

The element of Corporate Social Investment of the FSC in terms of Sections 9 and 10, needs to be developed to include and integrate the Disability Sector into mainstream financing (Corporate Social Investment % of post tax operating profit directed p.a. to CSI 0.5% 3 points).

Internationally, corporations spend under 1% of their income on CSI.

If the PIC, NEF, IDC AND OTHER FINANCIAL SECTOR ROLE PLAYERS invests 0.30% of its equity, it could serve as a catalyst for the rest of the Financial Services Sector to also invest and assist in the management of the Mechanisms providing Access to Finance for Disabled People (AFDP) with the Disability Sector.

This would ensure that the Disability Sector globally becomes not only a shining example of being a Business Case, but is integrated into mainstream Broad-Based Black Economic Empowerment and thereby the growth of the South African economy.

 Black

African ColouredIndian

or Asian White TotalNo income 141375 5266 3834 22497 172971R 1 - R 400 14718 513 242 2161 17634R 401 - R 800 55886 3028 1641 12195 72750R 801 - R 1600 17045 424 346 6522 24337R 1601 - R 3200 10271 490 608 8520 19889R 3201 - R 6400 3423 395 670 8235 12723R 6401 - R 12800 1204 143 425 4804 6576R 12801 - R 25600 444 48 145 2235 2873R 25601 - R 51200 126 16 48 769 959R 51201 - R 102400 102 4 11 344 461R 102401 - R 204800 98 8 6 169 282R 204801 or more 23 5 7 120 156Total 244714 10340 7984 68573 331611

Gauteng

Statistics South Africa - Census 2001Geography by Monthly income by Population group for Disabled, Person weighted

Recommendations to the Portfolio Committee to: Advise the Ministers of Finance, the Trade & Industry, Public

Enterprises, Economic Development, Monitoring & Evaluation, Women, Children & Persons with Disabilities and the Minister : National Planning Commission to co-ordinate Mechanisms providing Access to Finance for Disabled People (AFDP).

Invite the PIC, NEF, IDC and other Financial Sector Role Players to participate in this initiative.

Provide timelines and accountability mechanisms to report-back to this Portfolio Committee annually, every three years and every five years.

Building the economic basis for people with disabilities and thereby begin to address the economic injustices that face 5.2 million persons living with disabilities. If we as a collective will make any meaningful difference in this country, then it is by building a sustainable capital base.

Advise the Ministers of Finance, the Trade & Industry, Public Enterprises, Economic Development, Monitoring & Evaluation, Women, Children & Persons with Disabilities and the Minister : National Planning Commission to co-ordinate Mechanisms providing Access to Finance for Disabled People (AFDP).

Recommendations to the Portfolio Committee to: Invite the PIC, NEF, IDC and other Financial Sector Role Players to

participate in this initiative. Provide timelines and accountability mechanisms to report-back to this

Portfolio Committee annually, every three years and every five years. Building the economic basis for people with disabilities and thereby

begin to address the economic injustices that face 5.2 million persons living with disabilities. If we as a collective will make any meaningful difference in this country, then it is by building a sustainable capital base.

Currently, disability is being left out of the economic empowerment framework. This obviously points to the fact that Disabled Persons (estimated at 4,8 million - based upon the fact that 10% of the South African population is people with disabilities) are once again not granted the full citizenship we so clearly deserve (let alone black disabled people marginalized even further.

Disability Economic Empowerment is constantly not always being integrated in Broad-Based Black Economic Empowerment.

Therefore, it appears that disabled people are required to accept citizenship without the economic empowerment rights that is guaranteed by legislation.

The process followed with the Department of National Treasury and the PIC, NEF, IDC and other Financial Sector Role Players must be as follows:

Integrate People with Disabilities into ALL Programmes

“We are Africans not because we

are born in Africa,

but because Africa is born in us.

Look around you and behold us in

our greatness.

Greatness is an African possibility;

you can make it yours.”

Chester Higgins Jr.

Presentation to: PORTFOLIO COMMITTEE: TRADE AND INDUSTRY

Old Assembly Chamber, Old Assembly WingWednesday 13 March 2013 (09:35 - 10:05)