S.Africa’s B-BBEE policy: Should it have a sunset clause? - CNBC Africa

S.Africa’s B-BBEE policy: Should it have a sunset clause?

Southern Africa

by admin 0

B-BBEE was introduced in 2007 to remedy apartheid's unfair opportunity system. PHOTO: Getty Images

“The introduction of the codes, which has been with us since 2006, has resulted in a lot of focus being placed on empowerment by government. It has worked, [but] I think there has been a lot of problems with the implementation of the codes,” Stephan Van der Walt, head of corporate finance at Bravura, told CNBC Africa.

“I do think a lot of good has come from the codes, and companies are starting to see it not just as compliance, but starting to also see it as a strategic benefit of complying with the codes.”

Broad-based Black Economic Empowerment (B-BBEE) has been one of many the key policies that have been implemented by the democratic government since 1994.

Some have however argued that the policy has not been correctly implemented, and has created an even wider gap between the privileged and disadvantaged in South Africa.

(WATCH VIDEO: Changes in sector-specific BEE codes)

Van der Walt however explained that the B-BBEE codes were however difficult to implement as the codes themselves were quite complex. The upside nevertheless is being able to implement and integrate the codes’ elements into a holistic policy within an organisation.

“It’s a mind shift. It’s like any other legislation: first it’s a tick-box approach, then after that once you’ve accepted it, people start to look at ways in which they can use the legislation to their advantage,” said Van der Walt.

Keith Livingstone CEO of EconoBEE, added that B-BBEE should however not be perceived as the policy that will solve all of the country’s problems, especially within the business environment.

“In a way, it’s a small policy, [but] I’d love it to be a more important policy than it is. It only came into effect a couple of years ago. The Act itself was passed in 2003 [and] the first codes came into being in 2007,” said Livingstone.

“That is about 13 years after the new democratic government came into effect in the first place. So we should maybe make a difference between transformation and the B-BBEE codes of good practice.”

Livingstone explained that for the first 10 to 12 years, government may have struggled with the successful implementation process of transformation, but the need for its application nevertheless allowed the first objective measurement of transformation to come about in the form of the B-BBEE codes.

B-BBEE however needs a cut-off time to reach full implementation and sustainability, which, according to Van der Walt, is still far from being reached.

“I think there would be a need for the sunset clause in the codes, [but] I think we haven’t made progress as yet to really start to talk about when the end is. I think the codes always envisaged a 10-year review period," said Van der Walt.

"There was a lot of speculation whether that’s going to be the end of the codes or not. I think we are strongly of the view that it won’t be, which is also evident by the new codes that have been issued. It is just a very long process.” 

(READ MORE: Changes needed in S.Africa's BEE policy)

Livingstone however described the sunset clause as an indicator of the full implementation and fulfilment of the policy’s aims within the broader South African context.

“If B-BBEE has achieved its objective – we haven’t yet done so – we should have a target date in mind in order to achieve the targets that we need, in order to ensure that this democracy is a lot more equal than it has been.”