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Media Centre  |  COSATU Press Statements

COSATU's perspective on amendments to the Broad-based Black Economic Empowerment Bill

22 August 200

The Broad-based Black Economic Empowerment (BEE) Bill was amended for the second time in deliberations between the Department of Trade and Industry (DTI) and the Portfolio Committee on Trade and Industry (the Committee) on 19 August 2003. Amendments to the Bill are now nearing finalisation. However, recommendations and concerns raised by COSATU remain largely unaddressed and unresolved.

Some positive recommendations were made. These include shifts in definitions from 'fixed assets' to 'productive assets' and amending the objectives of the Act to encourage broad-based ownership.' Definitions have also been expanded and amended to include some of our concerns. We are also pleased that women and people in living in rural areas have been included in the definition of broad-based BEE.

Another positive step is that, prior to the Minister issuing, replacing or amending a code of good practice, he/she must publish the draft code or amendment for public comment and grant interested persons at least 60 days to comment. This allays previous c oncerns that the Minister had too much discretion in this regard.

One of our key concerns is that the private sector has been excluded from being regulated by this Bill. The private sector only scantily mentioned when dealing with a strategy for BEE, but the Bill in no way regulates its accountability and compliance. The Bill does not regulate in any meaningful way for the content and plans to be drawn up the private sector or for the criteria for the scorecard.

Despite the definition of broad-based BEE being reworked significantly, it does not adequately integrate the definitions adopted at the GDS Summit. Specifically, no mention is made of the GDS definition of BEE that includes the increase in household i ncomes, extension of basic services, expansion of literacy and skills development and an increase in the levels of employment in the formal economy'. These omissions remain unacceptable.

The composition of the Black Economic Empowerment Advisory Council is also a pressing issue. COSATU is disappointed that the Bill states that the President shall have regard to the need for the Council to represent different relevant constituencies inc luding trade unions, business, community based organisations and academics'. The wording merely acknowledges regard, and does not ensure fuller representation.

The section on Broad-based black economic empowerment plans' was deleted in the second amendment. A significant deletion is that the Minister may issue a strategy to provide for mechanisms to finance black economic empowerment'. We are concerne d about the implications of this deletion. Effectively, strategies for the financing of broad-based BEE remains firmly in the domain of the National Treasury.

Finally, there appears to be tentative progress regarding the policy linkages between the DTI broad-based BEE strategy document and the Bill. The amendments in the Bill will now shape changes to the strategy document and hopefully address some of our con cerns. In particular, the call for the criteria and weighting of the BEE scorecard to ensure a broader approach, in favour of employment creation and support for co-operatives now needs to be addressed. We remain opposed to the sale of state-owned ente rprises and it's close linkages to broad-based BEE.

On the whole, the amended policy has made tentative progress, but the fundamental principles and assumptions underlying the policy remain unacceptable and flawed. We will continue to engage government in this regard.

Patrick Craven
Acting COSATU Spokesperson

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