BOKAMOSO | The DA’s version of BEE will deliver real Black Economic Empowerment

About this Article

I want to start by making it crystal clear that the DA unequivocally supports truly broad-based black empowerment. This is important, because it is a widely held misconception that we do not. A systematic, well-designed mechanism to open up equity, employment, educational and entrepreneurial opportunities to the vast majority of South Africans who were denied these under Apartheid is a moral imperative.

The DA is committed to making South Africa a fairer society. This requires a targeted effort to correct for the inequities that persist in our society as a direct result of Apartheid’s injustices. An explicit BEE mechanism, if well-designed for practical implementation, is in everyone’s best interest – it is the fastest way to unleash the massive untapped black talent and energy in our society, and to unite us all around common interests.

Some maintain that empowerment should be poverty-based rather than race-based. Understandably, they wish to move away from using race in public policy. But combating widespread poverty will not in itself succeed in helping black people to become successful entrepreneurs, or give them a stake in the economy. To normalise our society we must break down race-based structural inequality at every level.

Current BEE system

BEE compliance is currently measured by means of a points system, in which companies earn points based on their performance in 5 areas: ownership, management control, skills development, enterprise and supplier development (through preferential procurement policies – those which favour BEE compliant businesses for government tenders and contracts), and socioeconomic development.

Unintended negative consequences

The system is certainly well-intentioned, but to date, BEE has not delivered meaningful broad-based empowerment – neither in scale nor pace. This is largely because the system has been captured by a well-connected elite within the ANC that abuses it to become extraordinarily wealthy. So the same small group of beneficiaries are ‘re-empowered’ over and over again, amassing incredible fortunes.

Worse still, it has harmed everyone outside of this golden circle by enabling corruption, discouraging investment, retarding economic growth, and squandering skills.

As a result, BEE in its current form is almost universally distrusted and disliked by South Africans. It has come to be seen as nothing more than a venal, corrupt, crony enrichment scheme.

The public’s scorn for crony BEE has severely weakened the social consensus for redress that is so necessary for progress. But it does not mean the underlying moral and economic imperative for real empowerment is no less urgent. Racial inequality is still there, and it still needs to be redressed.

Being overly complex and without sufficient built-in rewards, the system has created a culture of compliance: businesses have tended to box-tick rather than meaningfully engage.

That’s why we need to overhaul the BEE system. It must keep sharp focus on desired outcomes, be based on positive incentives, and must add value to the economy by helping to create black entrepreneurs and expanding the middle class.

Simply put, we need a BEE system that enjoys broad support from the majority of South Africans, black and white. Crucially, it must spur the business community into action. This requires that it is simplified, flexible, and easily measurable on its key objectives.

DAs approach to broad-based empowerment

From this logic, the DA supports a much-simplified system that measures real empowerment:

Firstly, award significant weight to Employee Share Ownership Schemes (ESOS), so that employees as a group become substantial stakeholders in the business. This would grow black equity while the company would benefit from the increases in productivity that ownership confers.

Employees should be represented at board level to reflect their position as shareholders in the business.

Secondly, recognise all spending on growing the skills and expertise of your workforce, be it schooling, skilling, training, bursaries, mentoring, internships or apprenticeships, whether conducted in-house or not.

Thirdly, reward companies for growing their work-force. This would mitigate against the incentives to mechanise and makes sense – ultimately, if you can’t be an entrepreneur, the best form of real empowerment is to get your foot on the ladder of opportunity through a job.

And finally, reward companies for their development of new black entrepreneurs, whether achieved through direct mentoring of sub-contractors or suppliers, or through donations to organisations whose core competency it is to identify, incubate, finance and nurture black entrepreneurship, such as the National Empowerment Fund.

This would incentivise local procurement from a wider number of diverse suppliers, rather than from a single large, established supplier. Importantly, there must be in-built incentives for businesses to go out and find people who have not yet benefitted from the BEE system, so the metric needs to be based on the number of new successful entrepreneurs.

All businesses in the SMME sector (the definition of which should be reasonably broad) should be automatically classified as having the highest empowerment status. This would effectively accelerate the growth of this sector, which has the combined effect of growing both entrepreneurs, innovation and, mostly important of all, jobs.

The current BEE codes run into hundreds of pages of complex formulae and scores. I’ve outlined here some top-level reforms that could begin to restore public support for the redress project, and for truly broad-based empowerment. I believe that the system I have outlined above would involve enough reward and incentive that it would be a win-win for benefactors and beneficiaries alike. It would establish the virtuous cycle of growth and transformation it needs to achieve real redress and win the support of the majority of South Africans. Converging interests and shared prosperity is what we mean when we speak of “one nation with one future”.

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  • Christina Engela

    So it seems that rather than doing away with the undeniably racist BEE system which excludes white people from the job market (white people being a minority in this country), the DA intends to perpetuate injustice?

    Yes, the poor – including people of all races – need to be uplifted. They need JOBS and education, Mr. Maimane, and the dignity of getting those jobs because they were the best person for the job – not because of the color of their skin, or because government has a quota system in place. Make sure there are enough jobs for everyone, and you won’t need to ‘re-engineer’ frivolous, malicious and racist ANC policies that were intended to perpetuate a form of reverse-Apartheid from the get-go.

    In what way does perpetuating a racially segregated job market provide an ‘open opportunity society’ to all South Africans? After 20 years the black majority in South Africa is somehow STILL threatened by a shrinking minority of white and colored/asian job seekers?

    After two decades of ANC corruption and mismanagement and the collapse of SA’s education system, and two decades of black domination of the job market, we are expected to believe there is somehow STILL no ’employment equity’ in South Africa? Does ‘transformation’ mean having NO white folks employed anymore? Does ’employment equity’ mean no more white-owned businesses? Are we all supposed to be forced out of the job market to eke out what living we can as ‘entrepreneurs’?

    “Transformation” is and always has been an ANC goal, Mr. Maimane, not a DA objective. BEE doesn’t need ‘new management’ – it needs to be done away with altogether because it is racist in its very concept! The new South Africa, we were told by the ANC back in 1996, was supposed to be about EQUALITY – how does closing the job market to a minority section of South Africans based on their race NOT equate to racism?

    I believed in the DA for many years, Mr. Maimane – because of the promise of an ‘open opportunity society’ – a promise made to all South Africans. As a gay transgender woman, in a country that spat on my right to exist, that notion appealed to me. As a white person who had to stick to the job I had because I was ‘too white’ to have the option of finding a better job for 20 years, that notion appealed to me. As a Pagan in a country dominated by Christianists who still force their religion into every aspect of South African society they can, that notion appealed to me.

    Everywhere I post about BEE racism, I am met with black folks making racist comments to say that ‘this is what white people deserve’, and even more hateful remarks involving threats of violence and death. BEE it seems is not about correcting actions of the past, it is about vengeance and spite and greed. People who were not alive to be offended are attacking the right to exist and the right to work of people who were not alive to do the offending. Is that an ‘open opportunity society’? I understand – the DA is not running the country – yet. It is not responsible for BEE, and it isn’t responsible for the smoldering racist hatred in this country – but if it supports BEE, then it supports racism. If the DA supports racism, then what sort of demographic does it appeal to? What has become of its ethos?

    The DA is supposed to stand for an ‘open opportunity society’ aka ‘the best person for the job, no matter what race’, not just for ‘cleaning up’ failed and biased ANC policies that will remain racist no matter how you try to represent them or face lift them – even to try and score a few extra votes. Winning isn’t everything – its also about how you fought – and about sticking to your principles. I’m sorry to say, Mr. Maimane, that the principles of the ‘Democratic Alliance’ under your leadership appear to be departing quite radically from democratic ethos.

    The solution to this issue should surely be to create enough jobs for everyone, not to simply play musical chairs with the number of unemployed people of each racial demographic in SA for whom jobs are reserved based on race! By making promises of putting BEE under ‘new management’ and keeping it in place, you are appealing to the same racist demographic which supports the ANC and even worse, the EFF. By making such promises, you are lowering the DA to the same level as the ANC – handing out chickens and loaves of bread to get poor desperate people to vote for them in the vain hope that they might get a job and improve their unhappy lives – while doing nothing.

    By supporting racism, no matter how sweet the wording of your electioneering, the DA plays a dangerous game where it risks losing its soul to become the very thing it purportedly opposes.

    It’s quite ironic to note that the very same thing happened to the ANC…

  • Estelle Marie Bower

    More and more we find that white people are completely excluded from everything. White men have absolutely no chance of getting a proper job anywhere. Go and visit pubs / bars during the day and see how many white men (qualified) are sitting there. 90% of them are being treated for depression because they cannot look after their families the why it was intended. Now white woman are going to be excluded as per ANC. So I guess we will have to join the men in the pubs.
    This is so unfair most of us white people did not benefit from apartheid. We did not get free housing, free schooling, free medical, free electricity, free water, ect The little we have we have had to buy and pay for ourselves.
    Please understand I am all for uplifting people, but why must this happen at the expense of the white minority group. All that is happening is a reverse situation which has been created over the past 21 years.
    Look at our TV – all the VIP people attending major functions (social / sport / ect) are black people. No other race groups.

  • Jaco Brand

    You miss the only tool that supports economic empowerment of any person. Education. Nothing else will do it in the long run. Don’t you realize that everything you talk about will fail without education? Your five point plan, and ultimately the country, will fail if you don’t employ the best person for any position.

    You cant have water, electricity without paying. You cant have land, houses, without paying. You need a job to pay for those. You need education to get a job on merit.

    You need more taxpayers as the 3.3mil current taxpayers simply can not support 50milion people! You can only get more taxpayers with an educated bunch that are employable.

  • Bongani Khonjelwayo

    This is the most vague policy I have ever heard of. Other than the employee share incentive scheme, the rest of the stuff is fluffy and non-implementable. It is designed to entrench white privilege. The private sector is untransformed and if white people had an opportunity to reverse any gains black people have made in the public sector, they will use it.Humans have the natural instinct to take care of their own and without an from government intervention, the pie will be unevenly shared, always.

  • Dallas Quirk

    not once did i read the white man is safe of owning his own business with out a black man i might as well vote for the ANC words have just changed