We need more time Minister Patel!

1
186

Dr Ivor Blumenthal | CEO | ArkKonsult | mail me |


The DTI has failed business in exchange for being BBBEE politically correct!

The Department of Trade and Industry have shown an astonishing naivete at best and total disregard at worst for business sustainability, in not extending current BBBEE certificates for at least a year, because of COVID-19.

The pressure placed on BBBEE verification agencies, in this time of COVID-19, has seen an increasing number of obvious errors. It is also notable that there is a conscious disregard for the principles of BBBEE on both the side of businesses, presenting their compliance profile for re-verification, and verification agencies having to audit the current status of these businesses.

Why has Minister Patel, in the State of Disaster, led the way concerning everyone else’s portfolios except for his own? BBBEE is his domain. His responsibility! Yet there has not been a single consideration, relaxation or compromise even discussed concerning the current cycle of BBBEE certificates?



The reality is that it is going to be virtually impossible for the majority of BBBEE-verified companies to sustain their pre-existing BBBEE levels, given the impact of the recession before COVID-19 and then the pandemic itself.

It is well-within Patel’s power, in the light of this State of Disaster, to issue an edict extending the life of BBBEE certificates, thereby providing companies with sufficient time to catch-up.

Whichever element of a BBBEE scorecard one focuses on, they all scream the same thing. ‘We need more time.’ ‘We cannot be expected to deliver the scorecard requirements under these circumstances.’

Ownership

Shareholders have to look beneficiaries of a BE or BB trust in the eye. S189 processes which result in retrenchments and exemption applications to Bargaining Councils are hard to justify.

At the same time, they are forced to deny trusts dividends and economic benefits because there are no relaxations or mechanisms in-play. This results from a tick box, work-to-rule, unimaginative and spectacularly anti-business-Patel, whose particular interest is the destruction and replacement of industries and sectors in South Africa.

Management control

What does a business do in a situation where the lockdown and co-morbidities have severely impacted production and profitability cycles in workplaces? How do you EAP (Employee Assistance Program) – balance your management cohorts and ensure new entrants, as trainee managers, to encourage management development activities in your workplace, in the time of COVID-19? All in-time for the routine of the annual re-verification exercise?

Skills development

The Department of Higher Education and Training (DHET) has been awake enough during this State of Disaster to have recognised the effect of the pandemic on ordinary training and development agendas of companies and seen fit to freeze skills levy payments for four months.



There is no way that companies will be able to complete what they have projected in either their Employment Equity (EE) plans or their Workplace Skills plans. The implication is that companies will struggle to comply with any of 2.1.1.1-3 in either spending 6.3% of payroll timeously or in implementing and completing sufficient learnerships, internships or apprenticeships and certainly not be able to evidence enough absorption to maximise skills points earned for their scorecards.

The question is whether they will even achieve the required 40% sub-minimum necessary to avoid being penalised a BBBEE level?

Suppose the Minister of Higher Education and Training knows this and has acknowledged it in creating a moratorium on the payment of Skills Levies for four months. Why then has Patel, our Minister of Trade and Industries done nothing to follow-suit?

Preferential procurement

Companies are going to struggle to evaluate their Net Profit After Tax (NPAT) in-time for their verifications, where the lockdown has not only disrupted their accounting services but also their ability to initiate or maintain the required programs necessary to comply.



Looking solely at the preferential procurement component of this element of the scorecard, one should ask how companies are expected to secure sufficient BBBEE measurement evidence? That is, copies of actual current verification documents from their many suppliers, where those suppliers have been out of action and closed for at least three months of lockdown if not longer and whose administration staff are invariably working remotely, if at all, because of COVID-19.

Let’s not even try and discuss the impact of COVID-19 on Enterprise and Supplier Development activities.

Socio-economic development

How can it be expected of the business community, to spend 1% of NPAT when firstly very few businesses know what that amount is? Firstly, given the intervention of the pandemic on the progress of completion of annual financial statements, and secondly given the fact that the majority of recipients being schools and charity institutions (typically the province of the Lotto and Social Security) are not open during this pandemic and therefore not capable of receiving and accounting for funds?

If other Government Ministries have realised the logistical IMPOSSIBILITY of regular compliance, in the time of this pandemic, then why is it that Minister Patel appears to have taken leave of his senses in not doing anything to relieve businesses of the excessive stress and pressure of complying with the re-verification impossibilities under COVID-19?



We do not expect organised labour and in-particular COSATU to lift a hand to help business, but where is organised business at NEDLAC on this issue? Why have they not exerted an ounce of pressure on Patel to extend the life of BBBEE certificates given these realities which their supposed constituency faces?

Where are the voices of either Sipho Pityana or Cas Coovadia from organised business, who supposedly represent the best interests of the business community at NEDLAC?

Where is Mpho Phaloane, the ‘Acting’ CEO of SANAS (South African National Accreditation System) on this issue? He has the job of looking after and guiding hundreds of verification agents and yet not a single peep from him in this time of crisis. (The fact that SANAS does not have a CEO speaks volumes for Patel’s priorities).

A conspiracy theorist may believe that Minister Patel, and his organised business deployees’, together with SANAS, have agreed to leave this issue well alone because it’s only the business community that suffers in this time of inaction. They’re this social partnership’s real enemy!


 



1 COMMENT

  1. There is no doubt that government has failed business through BBBEE, but equally business has failed South Africa.

    By the late 60’s engineering had provided SA with the industrial systems to transform SA into an world leader not only in mining but in manufacturing. China only obtained these skills needed to develop large transactional industrial businesses in the early 90 and it was these industrial skills that enabled China to transform.

    Local business leadership did not and still does not have the entrepreneurial skills to use these industrial system as China did. So it is not only government that holds back SA but business leaders poor entrepreneurial skills.

LEAVE A REPLY

Please enter your comment!
Please enter your name here