B-BBEE codes will deter genuine empowerment
The new Broad-Based Black Economic Empowerment (B-BBEE) Codes of Good Practice presented by the Department of Trade and Industry (DTI) in Parliament today will not promote redress, decrease inequality, and promote economic growth and job creation.
The DA supported the B-BBEE Act recently passed by Parliament on the grounds that it created criminal penalties for fronting and established a B-BBEE Council.
The B-BBEE Codes, however, are counter-productive.
Despite having gone through a public consultation process, with over 555 submissions received, various problems in the Codes remain:
- Qualifying Small Enterprises (QSEs) used to be able to choose the elements on the scorecard that they would comply with (they could pick 4 of the original 7). They also had a separate scorecard with simpler measurements. Now QSEs must comply with the full scorecard in all its detail. This is a disincentive both for participation in the empowerment process, and puts a greater regulatory burden on small business;
- The threshold of R50 million for new entrants in the ownership category is too high; and
- The Minister may review the Codes at any stage. There is no requirement for public consultation.
To date, the Portfolio Committee on Trade and Industry has yet to see the Regulatory Impact Assessment for these regulations or the public submissions taken into consideration. This information has been kept from the committee. The fact that there was no oversight over the public participation process is further evidence that legislation which gives too much power to a Minister to issue regulations opens the system to abuse.
The DA will submit parliamentary questions to the Minister of Trade and Industry, Rob Davies, requesting that the Regulatory Impact Assessment as well at the public submission be made public. If this proves to be unsuccessful, we will submit a Promotion of Access to Information Act (PAIA) application.
The DA will explore all avenues to make sure that the B-BBEE Codes are amended in order to be truly broad-based so that we can redress apartheid's legacy in a sustainable way.
The DA remains steadfastly committed to broad-based BEE. We believe that BEE must allow the economy to grow, jobs to be created and assist in redressing the economic inequalities of the past which, still persist today.
Statement issued by Wilmot James MP, DA Shadow Minister of Trade and Industry, October 30 2013
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