U-turn on elitist BEE codes a step in the right direction

11 May 2015

The DA welcomes the Department of Trade and Industry’s sudden U-turn on its clarification notice issued last week on the B-BBEE Codes of Code Practice. The department stated that the clarification notice will not have a retrospective effect, meaning all B-BBEE Deals concluded prior to 1 May 2015 will not be affected by its contents. 

Last week’s notice sought to effectively change the manner in which BEE scorecards are to be calculated. Employee share ownership schemes (and other broad based projects) would no longer count as much as individual share ownership on the BEE scorecard, which was a departure from the widely accepted reading and understanding of the codes. 

Hundreds of companies which had already, in good faith, taken action on ownership transformation on the basis of the Codes of Good Practice would have had their ownership schemes and agreements retrospectively changed or nullified. This would have been highly prejudicial for many companies which already struggle in South Africa’s rigid business environment, and thus the DA welcomes the DTI’s U-turn in this regard.

However, in its statement, the DTI further indicated that a Technical Task Team will be appointed to explore the appropriate balance between active (direct) and passive (broad-based schemes) ownership. The Technical Task Team will report to the Minister of Trade and Industry on its recommendations within 30 days.

The establishment of this task team is misguided and highlights the ANC’s fixation on further enriching those elite few who have already been empowered by BEE. 

The DA firmly believes governments focus should be on empowering and advancing those who are left out of the economy and trapped in unemployment, rather than those who are already enriched and in ownership. This technical task team would be better suited to explore that aspect of BEE.

I will therefore still be putting forward a motion at the next sitting of Parliament, requesting an urgent debate in the House as to the viability of these Codes. 

The DA champions opportunity over handouts. In contrast, the ANC only serves to further enrich the connect few - and the current BEE codes and the Technical Task Team’s mandate clearly illustrates this. 

The DA will continue to ensure that Black Economic Empowerment is truly broad based, for the benefit of the millions of disempowered South Africans who remain outside of the economy.

Statement issued by Geordin Hill-Lewis MP, DA Shadow Minister for Trade and Industry, May 11 2015