Dali Mpofu, chairman of the working group that is creating an empowerment charter for SA's information & communications technology (ICT) industry, says he is exhausted, but declares himself satisfied. The charter process, he says, has drained him and his team. The upside? The end is finally in sight, he says.
" Last year was a hell of a year. It was difficult. It took something from each of us."
The charter, which Mpofu hopes will come into effect on March 1 as scheduled, has been in the planning stage for nearly two years. The idea was first mooted around the time of the mining charter fiasco. The mining charter was leaked to the media by disaffected commercial interests.
It was with this is mind that the IT industry first began discussing the possibility of a sector charter in early 2003. But unlike the mining and financial services sectors, the IT sector doesn't have a dominant industry association. Mining has the Chamber of Mines and the financial services sector has the Banking Council, but the IT industry has more than 20 small, fragmented associations.
The solution was to create yet another association, the ICT Charter Working Group, with all the industry bodies represented as members of it. Mpofu, who is president of the Electronics Industries Federation and a director of Altron, was named chairman of the working group.
At the time, the mining and financial sector charters were in midstream. Mpofu was keen to devise a better, less confrontational approach. "In mining, there wasn't enough consultation with business. In financial services, it was perceived to be white business versus black business. We didn't have these problems."
In April 2003, the working group released its first internal discussion document.
On March 9, the working group released publicly the first draft of the charter, minus any specific empowerment targets.
Mpofu says the decision to release the draft publicly was an important step and a break from the other charters. "If you have a consultative process, you can't do anything behind closed doors," he says.
Members of the working group then went on a roadshow, presenting the details of the proposed charter to various stakeholders, including business and community groups, in all nine provinces. "The participation was excellent. People had done their homework and had strong views on certain issues."
Feedback from the roadshows and from industry was incorporated into a second draft, released on April 8.
A third draft followed on May 10, which for the first time contained a proposed scorecard. The process began to turn ugly at this point. Some US multinationals signalled deep unhappiness about the possibility of being forced to sell at least 25% of their local operations to black partners. If they didn't, the implication was that they would be excluded from lucrative corporate and government contracts.
"People took polarised views on the issue," Mpofu says. The Black IT Forum and the SA Communications Forum (SACF) argued strongly that there should be no equity exemptions for multinationals. In turn, the multinationals, through the American Chamber of Commerce (Amcham), argued that their principals would not allow them to sell equity.
A secret meeting was called to thrash out the issues. "There was a lot of posturing," Mpofu says. A 10-man committee was formed to continue discussions. Members of this committee included Mpofu, IT Association chairman Mthunzi Mdwaba, SACF chairman Eddie Funde (who also chairs the SABC), Arivia.kom CEO Zeth Malele (who represented the Black IT Forum), Dell SA MD Stewart van Graan, Amcham executive director Luanne Grant and IBM SA MD Mark Harris (who is also president of Amcham).
A breakthrough of sorts was reached in August. An agreement meant there would be no blanket exemption on selling equity. Instead, provision was made for the issuing of "certificates of permitted noncompliance" by a proposed ICT empowerment council. Companies would be eligible for this certificate only if they could demonstrate that "compliance with the equity requirements of [the] charter [would] cause inherent commercial harm to [their businesses]".
The two sides signed the agreement, with the working group calling it the end of the matter. The multinationals, however, felt they still needed the approval of their principals and cited this as a condition of the agreement.
While the talks with the multinationals were taking place, the working group also engaged government and labour in a more formal way. Once agreement was reached with the multinationals, it wasn't long before a fourth and final draft was issued.
Mpofu says the end of the process is finally in sight, but several issues still need to be resolved. Some of these he hoped would be sorted out before March 1. Others will have to be resolved by the proposed BEE Council.
Mpofu says he doubts he will make himself available to sit on this council.
Asked what he'd do differently if he had the opportunity of starting again, Mpofu laughs loudly and says only half-jokingly: "I wouldn't have chaired it."
