Black economic empowerment (BEE) charters are set to become a reality for the most critical industries in the SA economy.
Sector charters are likely in those industries over which government has most leverage through licensing and in those with greater proportions of government business.
Other industries will be encouraged to "voluntarily" agree on BEE programmes . In industries where government has strong influence , it appears that BEE charters or strategies will be developed either by the industry players in consultation with government or the other way round.
In information technology (IT), transport, tourism, and construction & engineering, the respective government departments have already initiated the development of BEE strategies.
The transport department's charter is well advanced . A draft charter is expected in the second half of the year. In IT, the department of public service & administration has begun drafting a BEE strategy. The communications department is working on a BEE strategy, but the department has decided not to call it a charter, because of the controversy over the mining charter last year.
The environment affairs & tourism department finalised a tourism transformation strategy more than a year ago. The strategy, agreed to by the industry, provides targets for government when procuring supplies from the travel and tourism sector.
Perhaps the most significant and sensitive of them all, the financial services charter, is expected in the second half of the year.
In construction and engineering, the department of public works has started work on a plan.
Government's broad BEE strategy, released by the department of trade & industry this year, does not impose ownership or other targets. But most of the departments will have equity ownership as a starting point.
A scorecard, an innovation of the department of minerals & energy, will be a common factor in all charters and companies will be able to score empowerment points .
The scorecard has three core elements:
- Direct empowerment: ownership and control;
- Human resource development; and
- Indirect empowerment: procurement and enterprise development.
In industries where government has limited influence , BEE strategies or charters will be encouraged on a voluntary basis (through the implementation of the scorecard), particularly in those sectors with higher growth potential. These include agri-business; manufacturing-related industries such as automotive, chemicals, clothing and textiles and metals fabrication; and high value-added services.
Andrea Brown, former director in charge of BEE at trade & industry, says: "The media and advertising sectors would be likely candidates for industry-driven charter processes. The strategy also argues that government will seek to conclude enterprise charters with key corporates in priority sectors to inject momentum into the empowerment process.
"This is likely in concentrated industries such as metals fabrication, chemicals and sugar. Here, empowerment may also be seen as a priority as a result of government's involvement in these industries as a funder and investor."
Brown says the biggest flaw in government's programme is the omission of targets or even guidance on targets. "The underlying objective of setting a national target for empowerment is to outline a vision towards which all should strive and against which progress should be measured," she says. "It would also provide guidance to companies and industries when setting specific targets. Targets are intended to unleash a momentum, which will be robust enough for the private sector to sustain without the heavy hand' of government."
Perhaps the biggest problem with the absence of targets is that it makes it difficult to compare companies . It leaves some of the decision-making processes in granting contracts and tenders to the subjective choices of government officials.
