The department of trade & industry's PR machinery has sprung into action to defend its troubled black economic empowerment (BEE) blueprint in what could be a too-little-too-late intervention.
But there is reason to believe that the DTI's recent actions are a gambit designed to contain the voices of dissent. For a while, it looked as if the BEE framework laid out by the DTI was set to implode. Spurred by the fall of the Thabo Mbeki order, detractors of the prevailing BEE system came out in droves to demand a review of BEE policy. These included Congress of SA Trade Unions (Cosatu) general secretary Zwelinzima Vavi, who speaks of a need for a "new BEE deal".
There are stronger demands. "The codes need to be rewritten," says Gavin Hartford, a former trade unionist and executive director of The Esop Shop, which designs and manages employee share ownership plans. "If the primary objective of BEE is to empower previously disadvantaged communities, then the current framework has failed. Outside creating a lucrative market for BEE consultants, the codes do nothing for the economy," says Hartford. "They do nothing to reward activity geared to boost economic growth. Nobody gets a point for creating jobs or coming up with a new product."
Hartford's views correspond with rising calls from the Left - including Cosatu and the SA Communist Party - to transform BEE policy into one that takes job creation, industrialisation, rural development and general economic growth into consideration.
Minister of trade & industry Mandisi Mpahlwa says: "Our view is that a review is always necessary, but we do not think we are at a stage of [needing to change] the existing measures."
There is now no hope that the crucial matter of aligning the Preferential Procurement Policy Framework Act (PPPFA) to the codes will be concluded soon.
When the DTI introduced the codes on August 31 this year, it was in a sense engaging in an academic exercise, because the codes' legal standing depends on alignment to the PPPFA. Without the necessary amendment of the PPPFA, the codes stand on weak legal ground. Administered by national treasury, the PPPFA reigns supreme on the conduct of public entities because it is a section of the Public Framework Management Act, which binds all civil servants.
The PPPFA comes with a narrow focus to BEE: ownership. It makes black ownership plus competitive price enough to earn business in the public sector. The PPPFA uses the 80/20 principle, where 80% represents price competitiveness and 20% black ownership in the assessment of public tenders, whereas the codes were established to shift BEE from a narrow base to a broad-based BEE scale, where price and ownership become insignificant.
Treasury has been reluctant to introduce a blanket alignment of the PPPFA to the codes, arguing that dropping price competitiveness will lead to the raiding of the state's purse.
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