Eskom is one of SA's most formidable players in the black economic empowerment (BEE) arena. The group, which owns assets worth R80bn, took a decision in the early days of democracy to back affirmative procurement and moved swiftly to develop a BEE strategy.
In 1995 a corporate commercial division was set up to formulate and implement a policy to support emerging black entrepreneurs. These entrepreneurs were to form a significant part of the organisation's approved supplier list, which has grown substantially to about 4 000 suppliers.
In the first year of implementation, contracts worth R15m were awarded to emerging black businesses. In the next five years , Eskom, headed by CEO Thulani Gcabashe, spent R13bn on BEE companies. The past two years showed a substantial increase, R5,5bn in 2002 and a targeted R5,3bn last year.
Eskom spokesman Fani Zulu says the group is working towards spending 50% of its budgeted discretionary expenditure with BEE companies in the current year.
After a period of refinement, Eskom's BEE policy has become a lot more sophisticated than those of many other state-owned companies. Benefits have expanded to a wider spectrum, the group says. Businesses run and owned by black women have been brought into the affirmative procurement net.
There's a firm commitment to promote black women entrepreneurs and facilitate their participation in the mainstream of the economy. A total of R197m was spent on businesses run and owned by black women in 2002, exceeding the R74m target. The target for last year was R310m.
When measuring a company's empowerment status, Eskom checks the percentages of direct black shareholding and to what extent black shareholders are involved in running the business.
If the company's turnover is R25m, at least 50% of equity must be in black hands for the company to qualify. As regards management, Eskom would expect the company to have significant black representation on the board as well as at middle and senior-management level. The bidder's own procurement commitments to BEE also count in awarding the tender.
For all its good measures, Eskom might need to review transparency issues. The head of procurement has in the past been reluctant to supply information on the breakdown of how the billions have been spent and who the major beneficiaries were. Internal slips have occurred within the group but auditors were quick to pick them up and investigate. Some cases are pending.
In as much as affirmative procurement has made an impact, internally, Eskom's gender and demographic profile has undergone a radical transformation. The figures speak for themselves:
- In 1993, only 5,2% of Eskom's managerial, professional and supervisory staff were black South Africans. By the end of 2002, this number had increased to 54,6%.
- In 1994, only 10% of Eskom's managerial, professional and supervisory staff were women. By the end of 2002 the figure had increased to 24,5%.
