FireSide Chats | Is BBBEE a transformation enabler or just a failed project?

hello friends welcome to another episode of I see Knowledge Bureau I'm the convener of Aussie timber wire and today we continue our conversation on one of the broad conversations have been having specifically around the issue of redress and transformation in South Africa we're going to drill in today on looking at a broad-based black economic empowerment we'll look at the Act we'll look at the report that was recently released by the Commission and more importantly we'll have a conversation about what we should be doing as a country to drive this conversation forward one of the big challenges with having this conversation on broad-based black economic empowerment is how do we remove the myth from the research what people think from the actual date and what the data tells us to join us in having this conversation as a person who sits right at the heart of where the action happens and where the research and data is collected she heads up the black black economic empowerment commission zot one truly thank you so much for joining us thank you very much and yes so let's just take a step back yes you and I only were having a conversation about how long we've been on this journey because I suppose as a black African I'm getting it a little bit frustrated 94 we have the elections 96 we have the new constitution in 2003 would promulgate an enact the black economic empowerment act version 1 were 15 years in and when I looked at the research that the Commission had done and the report you published I couldn't believe how little distance we've actually traveled what are we not getting right no thanks for that question I'm gonna take your step back exactly from that 1994 elections you know freedom but the question is what was that freedom politically as we got the freedom sure the Constitution then said to us these are certain things that you need to do to make the economy more inclusive to make the country citizens more equal but that did not really happen in the pace that it should have so in 2003 only after the Constitution was passed in 1996 then you get to pass your first economic redress legislation which is the triple B that was in 2003 so you can imagine you've already lost so much time and even when that was then done was past the implementation of it was left to the market to determine how it gets to be implemented so from 2003 2007 in 2007 only you get your first code of good practice to guide the market in terms of what needs to be done so so you're dealing with a legacy of over 400 years of apartheid but you are not moving as quickly as you should in actually bringing into place the redress mechanism so it took longer to bring the redress mechanism so even when we actually got to do it as a country implementing it again was not really effective so if you look if you recall in 20 I think I think it was in 2013 when Parliament reflected and said is this legislation working and they identified a few things that of course the legislation the intents and objectives are good and well alright but we're not implementing it properly then they introduced amendments but those amendments with seeking to address a few things one they scheduled fronting yes that had happened over from 2003 then they also wanted to introduce a monitoring mechanism how do we even measure that we're getting away yes all right because you can't say I'm not getting there if you don't even have a measure you don't even have a baseline all right so the third thing was consequence for not applying it so they introduced penalties criminal criminalize fronting criminalize the convention and all of that and lastly introduced a regulator that will then look into now ensuring that going forward let's not make the mistakes that we've made in the past of just putting it into the market and hoping it's like you throwing it Evelyn you know hoping it gets to a point that you actually wanted to get to so that was the mistake that we made and I think the reflection in 2013 was actually a good one but the question is are we going to now do the right thing and do it consistently and do it fast enough people can't wait they've been waiting forever there are so many parts of what you've just said that I want to drill into so lets us follow it chronologically the point you make about first how long it took for us to get the mechanisms right and the mechanization of of the law right why did it take as long as it took I mean if we promulgate in oh three why why only you know seven are we published in codes of good practice one and two for the average person watching this what is the code of good practice okay that means let me explain that first the code of good practice basically meant that we said this is what we want to achieve to empower black people economically all right but we didn't say how and how should business do it okay how should government do it and so so so you you've got a framework legislation you've just said to people this is what we want to do this is what you must do but not how you must do it so the codes of good practice I document that basically says if we're saying ownership this is what we expect you to do under ownership if we talk to management control this is what we expected to the under that and how we're going to measure it if we saying that you've actually met the target it's because the target is this much alright so in the beginning there wasn't any of that so you've got the legislation from 2003 2007 only you do the cause of good practice then you're beginning to guide the market but because there isn't any overseer the market then become more creative around it okay and some think they're doing the right thing but some deliberately get iterative to circumvent all right so then you find yourself at a situation at that point when the reflection was taking place in Parliament to say something is wrong here so they go back so that is the situation that we found ourselves in so we're saying that now that the legislation has been amended so we had to say where are we at this point the legislation has been amended now you've got a regulator so the regulator has to sit down and say what is the problem what has been the problem because for us to actually know where we should be implementing is towards we need to know what went wrong so that we don't repeat the same mistakes but you can also close the loopholes so one of the things that we did as the organization when we established the first thing when we did our strategy session was to exactly identify what was happening in the market what what is it that we want to eradicate what is it that we want to make sure it doesn't exist anymore firstly fronting is a big big big problem it is more it's becoming more and more sophisticated every day I will share with you the examples but for now I'll just tell you what we highlighted fronting is the hindrance and in fronting there's a whole lot of corruption the elements of corruption in it so and and also it's just economic crime this is just a crime it's illegal it shouldn't be happening but it gets to be more and more sophisticated and then the second thing that we also identified was the integrity the lack of integrity in the verification process so the verification agencies that issue certificates that process of conducting that verification had a lot of gaps where you find that companies don't even have to subject themselves to a verification process they can always call and say we want a certificate for me for this year exactly it can just be issued so those are the things that were happening and we had to look at that so if you don't have integrity in the triple B certificate that needs to be presented to various government departments various businesses if they can't trust it who are they supposed to trust so you need to bring integrity in that process so that that was one thing that was a serious challenge the verifiers were not properly regulated as well so that also you know contributed to the gaps but sadly they the most important one the triple B legislation it success relies heavily on government implementing it and implementing it effectively and consistently what we picked up is that government departments in general were not implementing it consistently some did not even know that they were supposed to implement it so in Section 10 of the legislation it says that for any procurement for any public private partnerships that we enter into for any license that government must issue government must bring in PE requirements so a company that gets a license in this country Mars for instance have met the Triple P requirements so government was not implementing that and they were not whether you implementing it is in little bits and and and corners and not consistent so then you have a problem they the last thing that we then identified was that a whole lot of people that must implement the legislation do not understand it all right some to understand it hence they are able to to be creative around it because you've gotta understand something to be more creative around it so but a large number just did not understand it and the people that are supposed to benefit from this legislation those are black people black women rural people young black South Africans they didn't even know that they've got a benefit out of this legislation so if you are putting something on the ground to benefit me but I don't even know about that benefit how would I take it up so you've got that disconnect so those are the four areas that we identified so now when we then develop our strategy the first thing that we had to reflect on was what is it that we want for this country the first thing is that you want in fact all of the companies to do the right thing right so for them to do the right thing what do they need they need to know what needs to be done and we provide guidance we provide advice for free to every entity even the big ones they jesse listed companies for now we're providing that advice for free so for every initiative that you do for every transaction that you enter into you bring it to us you can bring it on an or name basis we'll give you advice on it and we'll help you to structure it in a way that will achieve what is intended so that's basically where we go it but a lot of damage happened in the past and we need to deal with that and so there are some transactions that took place you know there were much big deals that we announced the knowledge business papers exactly I must tell you that a lot of those are not worth the paper they're written on I'm talking from a perspective triple-b they might achieve other things you know a few cents in somebody's pocket but in terms of really bringing ownership in the hands of a black person in this country No so you'll see those deals when tennis comes then the unwind they deal so everything goes back to normal so there's no black peasant that owns the productive assets of this country so that brings me now back to the issue about the Constitution when I said in 1996 when the Constitution was adopted the one thing that was recognized is that the owner ownership patterns of this country are completely not acceptable yes they still like that today so we needed to make sure that whatever we implementing gets to a point where it brings in the balance and we have not been doing that in the implementation so now the regulator which is a triple big Commission is now there to make sure that we measure this hence we then publish this first report this is the first report which is based on information that comes directly from companies the other posts that you've seen before there would be surveys will be whatever secondary data this is primary data so we've used information to test it to test where we are so at least going forward we'll be able to say this is where we were this is where we're going scary stuff yeah I look at for instance some part of your report you speak about the total number of directors you looked at 121 entities Jayceon - yes and you looked at a percentage of black versus non black and directors specifically and I'm I don't 62% of directors continue to be non black yep this I mean we live in a country where 83% of the population is black African this is black broad so this includes Indians and colors at only 38% which is extraordinary and then I'd looked even further the black females are in the dim the decline at these levels of organizations what what is going on here I mean companies have they not got the message or do they not care okay I'll tell you that one I think we need to have a conversation in a very honest conversation as a country okay to be in a position to understand why this is happening yes all right because one of what what what we've picked up in our engagement with stakeholders is the Commission is that we keep on speaking across each other but we actually forget what was the real purpose of this legislation one with this legislation you'll see it mirrors the Constitution we wanted to make sure that the economy becomes more inclusive how does become more inclusive you need to get black people to participate meaningfully in the economy how do they do that they can only do that if they've got ownership of a pie or a part of the pie you know in the economy all right so that is why you have got ownership to increase the ownership to change the ownership patterns in this country because the ownership pattern cannot remain the way they are but then secondly you want to also even where black people are not owning you want them to have the ability to influence the strategic direction of those companies so that's why we speak about management control but then also recognizing the fact that a whole lot of black people have been deliberately excluded from acquiring these critical skills that are needed in those you then have the element of skills development where companies are required to pay six percent of their payroll every every year to develop non employees and employees so that's an opportunity to actually you know train a whole lot of graduates that are roaming our or our streets and you need to do that they the first one is the enterprise and supplier development with the enterprise development critical in that is recognizing that not every black person is able to access a loan in the bank for their business so it's actually intended to to extend access to finance unfavorable attempts from existing businesses all right to then actually support entrepreneurs to get into the industry of course there's a there's a an inherent conflict with that so if I'm in the in the industry let's say I mean the telecoms and I'm supposed to develop you and you're also in the telecoms industry yes maybe my competitor but the triple B legislation actually says if you develop me if you develop over C as an entrepreneur in the value chain and you help them to move in throughout the value chain you actually get to be recognized you get points for that so that's what Enterprise Development does but what has happened is that people have turned it into what do you call it this facilitators yeah middle middle people and all of that exactly there are facilitating these things on behalf of companies and they actually get they don't really say what the purpose of this is they then sell it as if it's some charity thing that companies are doing or that they're doing them a favor and they don't explain the whole thing they don't monitor that when they have actually provided that support is the entity actually moving into the next step because if you were an intrapreneur that is not even in the supply chain the next step should be for you to be in the supply chain then they can then claim points for you for supplier development all right but that chain is not explained and people have got benefits and opportunities that exist but they are actually referenced by a few people that know it and they don't expand it that is why people will then say but B it doesn't doesn't benefit the majority of this of the country it's only a few connected people of course it will be connected people that know the information so what has the Commission we are saying is that we need to expand the knowledge the information about what is they let more people actually know what exists so that they can get that benefit that is another thing but so the last element is there one around socio-economic development which basically says as an entity you can do anything as long as whatever you're doing is going to bring a black person that was not in the mainstream economy into the mainstream economy that's the main thing so now if we go back to exactly what was the purpose we will be in a position to say if we've got 38% black representation on the boards of the JC listed companies why are we they so but you you can look at in located in isolation if you go to the employment equity report that has been and the data is different remember because we get complaints reports that are purely based on the peer requirements they get the reports that are based on employment equity purely but the information is actually the results actually the same so it tells you that to date the bottoms are still dominated by white people and they shouldn't where they applied people is only a few black people that get to be circulated around that are being recycled so you find exactly in some instances you find one person that's occupying tempered positions so that's also very counterproductive because you can't have that unless the person is actually left their job they do nothing else except to sit on the boards in fact I would imagine from exactly it's completely wrong so those are some of the reflections when I said we must have just honest conversations because sometimes when we say exactly what is wrong even the black person that is supposed to even know better they actually don't know that that is wrong so if I've got ten board positions there's five other black women that need an opportunity we're gonna get it so we need to be able to also spread that yes of course the figures are showing us that not enough board positions are becoming available but even those that are becoming available it seems like we've got a whole lot of recycling so if you look back last year you'll see that we had women I think I do a twelve percent and this year they seem like they've increased to eighteen percent but it's because this year's figures did not distinguish between foreign nationals in South Africa yes so it's possible that there isn't really a significant movement but what we have seen over time was that even when you find that black women increase the black man will drop so it's just a you know so you don't have like a real change in the composition of pause and there is still a big drive towards the executive who is held accountable on the strategy of the business and reports to shareholders remember when I said to you that I will explain to you how sophisticated fronting even gets so for companies they're more the black person is not involved in the business the better that's the model that consultants a lot of them are selling to them that we actually can give you a level 2 or level 1 you don't have to be poor that will get you black partners that don't get involved and all of that that's completely against the Triple P legislation the Triple P legislation is saying that if I'm going to be whether a 15% shareholding the company there must be participation and that participation must be as if I'm actually a manager in the company it likens it to that because what you what you want for black person to just have ownership a passive ownership it doesn't give us the knowledge to actually run this business so even if you were to increase your stake you you're not getting the benefit that the whole legislation was intended for exactly their knowledge transfer so where are you gonna get that exactly so now the models that are being sold to companies is that daughter's fine we'll get you loosey-goosey is actually extremely busy as long as you give him 15% he'll be fine then you get your 15% but that opportunity that you got somebody else that could have given it more value has lost that opportunity because it's with you another black person that could have participated that could have actually made the real impact and in fact participation with the view of acquiring the business itself has lost an opportunity so fronting does happen because of those mortals that are being sold around that nor we can so they're less and less participate participation companies want one day on their own the board's on the business is actually the counter they triple B legislation that's what fronting is all about you've got people that you tick and say I've got pleb ownership but then if you even speak to those people they don't even know what the business is doing they have no clue that they're shareholders some of them they don't even get invited to just a basic shareholders meeting that happens once a year just take me a step back yeah so there is a part of me that is tried to learn how not to judge so much there are some things that it seems to me are simply common sense when I put my signature to something I am agreeing to the thing about which I'm putting my signature next to yeah if I'm being made a shareholder in an entity and I sign and I say I'm agreeing how do I not understand the responsibilities and I'm not talking about going to the Institute of Directors and doing force on the directors responsibilities and what it means to be derelict of those duties I'm talking about simple basics guys I have signed a piece of paper that says Michelle can you just explain to me what is the strategy where are we going who's going to drive it and how are we going to ensure that we're acting in a manner that is consistent with the law of South Africa so I suppose what I'm saying is indeed there is a responsibility on the corporates yes who benefit from this fronting yeah but I also think there was there is equal responsibility on those who are allowing themselves to front yeah you know for exchange of a German sedan I don't get it it seems to me very short-sighted it is extremely short-sighted and what if explained now is is what is ideal that if you are director in a company first you know what their responsibilities are you know what the company does but that's not what happens in this country and I think particularly because people are taking advantage of the vulnerability of the majority of South Africans I'm going to for now exclude the people that should know all right a person like yourself I'm not judging but if you a direct any company and you do not know what your responsibilities are I think there'll be no excuse for you if you've if you've done something wrong they cipc with which deals with you know the duties of directors must take you up and they must probably even declare you as a delinquent director and remove you but I'm talking about the majority of the country where one you've got employees that are actually approved to become directors and already they power relations and all the same exactly you've got that but even not even through a soaps director that is surely from just an employee so already even if you could be a knowledgeable person immediately the power relations of me being an employee and you being my employer already put us here if you don't invite me to board meetings I'm even afraid to ask you a question so we see a whole lot of that so even people that you are wanting to say they should have asked the question you know at this at the same time you also say but they are a worker they could lose their jobs they saw just so there's that so I'm saying that there are extremes but there's no excuse for any black person to take up an ownership position or directorship position without them knowing I can I can really understand it for those people that really do not have the knowledge about that but we see that increasingly the vulnerability of black people purely because of the historical background is taken advantage of but also they I mean people can't continue to to plate in you know ignorance that we didn't know that we're supposed to do this because they're perpetuating the very same fronting so that is why when we do our investigations if you come in allege that you have your frontage we don't only look at the company we look at you as well what was your role so we then have an instance where we are dealing with what we call willing frontiers so how if you a willing participant in the fronting arrangement then certainly if we are referring anybody for prosecution you'll be part of it so we're saying that of course we'll look at the circumstances there are people that certainly could not have done anything about it especially employees especially communities cause the companies that make community members shareholders the participation is extremely remote so the company virtually just continues as if nothing has changed the owner hasn't changed so they can make a lot of decisions you don't know about it cause you just a community member who is either represented through a trustee a trustee that you know may or may not exactly so there are instances where we we look at it very objectively we look at it we we consider what the circumstances may have been but I can tell you that I think for the first year of this work I was traumatized every day because every day I get to sit with people that I expected to know better and they actually who had no clue that they were in a fronting deal it was a big deal it's worth billions they were told the projections are this way but then when you get into the detail of the agreement that was unlikely to be achieved so you were basically sold something and because you do not know much about that they they sold you something that the financial projections could not have I mean for instance a lot of vendor financing they say you'll pay it in five years but then I don't even get a penny and dividend how are you going to even repay that loan yes because what they do is they control the dividends policy so a whole lot of people got introduced those schemes the the contracts that they stick of course so but we expect you to have ready but we can't say that to everybody say but you should have read this big fancy law firms incent yes so there again the negotiation the bargaining power is completely not balanced building school of thought and I referenced some research by a funder Martha at our link embedded around 2014 and a specific research looked at the economics of black economic empowerment and what they sought to prove admittedly there were some issues with a methodology but what they were doing was they were trying to to prove that actually companies that have done black economic empowerment have seen a reversal of fortunes or even a loss of value relative to the market so here's the question should we when we're looking at the conversation about black economic empowerment even entertaining the conversation about the market value of a business you see there's a lot of studies that can actually contradict that so but we're not going to get into that now but if you let's just take other jurisdictions for for for an example look at the Malaysian economy weight started and weight cut because of a policy that was in fact our PE policy is actually based on that one if you look at them they are working around single digit unemployment figure the last time I checked they were at two percent unemployment as a country moving from two digits you know over a period of time so if you've got a proper plan and and and and I mean anyway research has also shown that if your economy is more inclusive you're likely to be more competitive more productive so it can't be that you your valuable job so there may be other consequences that are not really long term that could be immediate because of the change in approach the change in policy but they're not necessarily going to continue going forward so what we've seen is that in fact the more transformative the more inclusive the more growth in the economy and the more jobs you can create so yeah well you and I had the conversation about it seems that there was a narrative and I'm not sure who said it but I think that's us how people have understood it that black economic empowerment net white economic impoverishment but that almost the more of the one you did the more of the other there was it end and I'm not sure where that comes from I also by the way before asking you this question I must tell you that I hesitate to ask it because at a personal level I don't believe black people bear the burden of making white people feel comfortable about anything right that that said what is what would be imagine that I am the middle-aged white male who sits in middle management in a large corporate because that's where the action happens oh I'm the middle-aged white males 50s I've been in this organization for 30 years single degree and I Drive a P&L and I make decisions about procurement about who to hire who to fire who to promote who descend on training courses I am that guy and every time I hear this thing be the one thing that happens in my head is all I see is I'm out of a job because I'm white now how should I be approaching this conversation what should be my demeanor my energy my disposition look I think we must that for me you know as a business part of your strategy must embrace the laws of the country that's the first thing so now if your strategy as a business is the one that says this is how I'm going to drive my procurement this is how I'm going to drive inclusive it this is how I'm going to drive you know my pot representation and it's because you are good corporate citizen you want to comply with the laws of the country then there shouldn't be any what can I say any misconception about what Triple P is all about so so again we go back to the basic what is the purpose of this legislation and I think that then takes us back to a consistent message around triple B is very important we need to know exactly what the purpose of it is so that we are able to drive towards the same direction what I mean is you know if if if we speak on a policy in different ways that are actually even contradictory you make it very difficult for the person that is supposed to implement it to actually embrace it because your messaging is completely wrong so what we're saying is that the messaging must be found in the legislation itself and it must be found in the intention of the legislation which is there in the objectives of the Act in section 2 it tells you exactly what is it that we're seeking to achieve so if that is the message and everybody who embraces our Constitution whether black or white African if they embrace our Constitution they will understand why we need to do that and if you are again a good corporate citizen then you should be able to have it in your strategy as part of your strategy not a tick box exercise that sometimes people do their point just the one black person in the organization they say you deal with PE all they want you want a certificate yes we want exactly we just want a certificate that says no level below - all right that's the mandate that you have that that can be so strategically do you completely wrong but I do think it was it just to agree with you that we should not create excuses for implementation of triple BG and at the same time again the debates that are coming you know from various direction they're actually normal but they should not detract from what is intended I think what we need to do is to go back to effects all right like we said we are measuring now effects based on our reports this is what the country is at this is what this is what we look like so how do we what do we do then to make sure that we move from that the 18% representation of females when actually females are in the majority in this country it's completely out of order so we need to say what are the plans then their various entities in the private sector in government they must then say we then lift our targets to this so if this year you actually just wanted 20 percent black ownership next year it means that at the game so your target must be act so you need to do that progressively so that ultimately we get to a point where we can really can achieve the editing now I want to change my complexion and I want to give you two scenarios I'm employed in a company I'm not in management at all okay what are my rights and responsibilities as it pertains to this conversation of being one I think if you're not in management so you're not in control of the policies but you are still a citizen and you are an employee in the organization the one thing that you need to be able to know is that you are entitled to being chained to being developed you know not only on things that have got to do with the work here in your position that's what the skills development element says it says it's actually training over and above your normal 1.5 percent payroll of companies so in addition to your normal training in the organization this says you must actually give me more skills for me to actually move higher either higher in the organization or higher elsewhere all right that's basically what it means so and again we're not looking only in South Africa if it means that you're giving the skills that are going to make me even marketable outside this country then good shot you see so if you're an employee does marine management that is got no control over the policies you just need to know what is it that you're entitled to and ask questions and requests ask for a plan to say I need to be developed this is from the areas that I think I need to be developed in be proactive and I think that is the part when I said that a number of people that are beneficiaries or as opposed to be beneficiaries uneditable P legislation do not even know that they are beneficiaries and as a result they're not able to even ask that question I will turn it this way I think you must do a very proposition and presented to a company and say this is me fuzzy this is what I do I would like to see myself here is your enterprise development program able to help me with this for me I think that will work because you creating a relationship yes you are creating a relationship of you moving with this company helping you so it's not a matter of demand it's a matter of knowing what is it that the legislation allows for because the triple P legislation is more an enabler right it enables you to do certain things but you must know what is it that it enables you to do so if you approach a company and you're asking them this is me and then if they their program would not be able to cater for you they'll tell you and they'll give you reasons and then you'll move to another one and to those of us and I say Oscars I include myself in this who have the responsibility and privilege of sitting in those boardrooms who are board members who are shareholders what is our responsibility as it pertains to fixing the status quo I'm looking at a decline of women in Agra being in forestry in construction in tourism in ICT I mean this is it's extraordinary to say the least one not only that it's a decline but that is a decline of such a low pace you're doing worse than bad it's extraordinary yeah so for those of us who are sitting in those borders and have a voice what should we be thinking and say look III do you think that when you are on a border you're even more strategically positioned to make sure that the trip will be a legislation but not only that but all the transformation and legislation like your Employment Equity they find a place in the strategy of the company because your job is to oversee the company from a strategy point of view so often they say that if you're a board member of course your hands must not be too much in there you must but your ear must be there so certainly you need to make sure that you you've got part of your strategy involves what is it that you're going to be doing in the short term and in the long term I don't triple B so for me I do think that you you do have a role to play in that but I think what we are finding is that like I indicated earlier a whole lot of black executives or non-executive directors sometimes they find it difficult to to have that conversation in the bottle because the the environment has not been enabling but what we've said as the Commission is that now that is a regulator remember that even where you feel previously that you are unable to to to voice your or your views in a board or in a in a management meeting whatever we away to help facilitate that so if you find that it's very difficult in your pot you can tell us we will then organize a session for your board we will then go through and have that conversation with your board so that going forward it's not only your debate it's not only your view but it's actually a view that is appreciated by everybody so in as much as we are regulator but I do believe that our job is also to to give a voice to those that were a bit voiceless because they were afraid of intimidation if you bring it through us we are able to do it for you in not in an investigation investigation manner but in a manner that says to a company would love to to to to speak to your party regarding 1 2 3 final question yes so as as as the Commission what is your plan to we're not having this kind of conversation again and secondly what is your hope for house of Africans will take okay the first thing that I should say is that you know last week you know when we released the report they then coincidentally there was a whole lot of debate on PE whether it's working or it's not working the first thing that I really wish we could have is because if we're going to be very honest we're going to have to approach them in a very honest manner as well to be able to measure whether there's any success or no success I wish the real beneficiaries of PE can stand up and say I did benefit so that we can then be in a position to say oops so if this legislation could take you from here today then it means this is where we need to take you you know for me that will really help the country to have a much more honest conversation but also help us as the regulator to see and and be able to integrate when we do our own studies and research we're able to integrate that kind of feedback that comes from the real beneficiaries because from 2003 I promise with there's a whole lot of people that have benefited but not enough because the majority has not benefited so yes we've got a number of people that benefited but but I take your point let's say not enough is not is different to no one at all exactly yeah yeah I think that's the point that I wanted yes what you're saying is nobody's exactly so we wanted there the second thing that I also wanted to say is that again we need to also move away from a conversation that wants to take black people to a point where they are viewed as like serial beneficiaries of cards like income beneficiaries as opposed to real participant in the economy all right so so the conversation that was taking place last week for me was actually bordering on something like that that we actually are not looking at what exactly was the intention of this legislation so income beneficiaries are not necessarily empowerment initiatives you're just putting money in somebody's pocket so that they can buy food today but they're gonna need that money again so you cannot reduce blood people to that you need to empower them so that they're able to do it themselves so they can own the productive assets of this country but as the Commission what we did as I indicated to you that we looked at what was the problem and of course every year we look at that and see if we decide these are still relevant so we then adopted a compliance strategy and a corrective enforcement strategy all right so now our and compliance strategy looks at being open to every entity in this country whether big or small if you want to do anything one be talk to us we'll help you from a to the end we'll have time for you so that what we're trying to avoid is that ten years down the line we don't want those deals that are winding up with no ownership in the hands of black people so we want to prevent it now so that we don't have that situation because the 2003 situation created a fallacy that there was empowerment of PE but when the deals are winding up there is no ownership so it resets so now when we see them the figures regressing here we are asking ourselves why are we regressing if it was never a real ownership deal it it can't it can't be alright cause there's not gonna be that so we've seen that we in the industries the studies are showing us that from 32 percent we have no requests on ownership to 20 to 27 percent alright so that's not good that's not good so now our empower complain strategy is going to assist the country to then go step by step making sure that whatever we do now is perfect and that it's implemented properly going forward so that is targeting all companies private sector but also largely government government you'll see from our report that from government departments we did not even receive a single report submitted last year only this year that is coming up so we are not even able to measure you can probably where the government exactly where the government is doing what government is supposed to be doing we only received about four from state-owned entities so again we are not able to measure and those account for a big exactly so if we cannot have the data for that so how do you actually measure impact so you already measure it from ages enlisted companies so we are saying that if we mount all out our compliance strategy which we are doing and in fact we started it last year we started with it from the beginning the compliance strategy what is interesting is that in fact our compliance requests are increasing more than the complaints so and this is what we wanted to achieve if we are doing it right then we should have more people approaching us directly so that we can help them than people fronting others so that you know so we don't want more people coming to other they I've been frantic action however our corrective enforcement strategy basically what it says is that if you come to us Elya will help you and you make a mistake in the implementation we can at least be a bit lenient on you and help you to correct it all right but there will be a little bit of punishment because now you're in the corrective side of things but we'll give you an opportunity to correct it but where we find plate and criminality of pure fronting will refer you for criminal prosecution so there there will be no excuse so now that is where we are thinking those are the gaps that is I will see that when we started doing our investigations more of our proactive in Asians are in relation toward the verification and then secondly the protease schemes so we've got that so our strategy really we're hoping that if we do the right thing from a compliance side of things and companies to implement this deals properly we should then prevent situations where we're going to get a lot of people saying that no but this was not a real Peter all right but we do not have like a what can I say there's no silver bullet all right but government is going to increase how it actually performs on its side it is a huge yes so let me just say again just in conclusion that also when we're now looking at this be if it is our focuses the Commission is we look at the quality of that initiative and the sustainability thereof so it's not long about the the deal and then then we shake hands then they cut reborn and everybody's happy they say there's a pata no no well we're looking Twitter's the commission will look at the quality of it and whether it's going to be sustainable and also whether it's going to make the impact so if it's not gonna bring that ownership in the hands of black people transfer of ownership then it's not a real big deal so we think that if we can do it the right way then certainly I don't think we'll have this conversation 20 years down the line certainly not but we're going to have to throw a few people in jail I think just to send a message that you know where this blatant criminality it can be it can be tolerated here and in fronting is a crime actually thank you so much for joining us thank you we really appreciate it this is the robot en del engine and as you get a sense we have a long way to go just a few closing comments from me first you have a responsibility to know what your rights and responsibilities are you should know what the Act says but more importantly get involved get involved in the organization you work the community you live the spaces Wade that you occupied make sure that you have the information the knowledge the power the tools that you require to be a person of impact but if all else fails the Commission is available you get a hold of the Commission and they will help you to get a better sense of your situation and where you are at ultimately the project of a black economic empowerment is not about the enrichment of a few it is about lifting the status of the whole country so people who were systematically systematically disenfranchised and disempowered can become part of a system of inclusion and until we get that right project South Africa is not sustainable thank you so much for joining us on another episode of I see Knowledge Bureau 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Channel: IC Knowledge Bureau

Views: 17,582

Rating: 4.8736844 out of 5

Keywords: BEE, South Africa, Join the conversation, Vusi Thembekwayo, IC Knowledge Bureau

Id: T7h3af-PAxE

Length: 50min 9sec (3009 seconds)

Published: Mon Sep 10 2018