Impumelelo 16th Edition

BUSINESS & GOVERNMENT 16TH EDITIONWWW.IMPUMELELO.NET

w w w . t o p w o m e n a w a r d s . c o . z a

AUGUST 2016

13th Annual

BU

SINESS &

GO

VERN

MEN

T 16TH ED

ITION

An exclusive interview with

Chief Director in the Department of Science and Technology

Phethiwe Matutu

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FOREMATTER PAGE

Featured clients 5

Editor’s letter 6

Foreword – BUSA 7

Foreword – Stadium Management SA 9

SECTOR OVERVIEWS

Agriculture 50

Manufacturing 60

Infrastructure 74

Business services and finance 88

Construction 96

Property 102

Health (brought to you by Wildlife Pharmaceuticals) 106

ICT (brought to you by Morvest group) 140

Science and Technology 154

Public Sector 162

Transport (brought to you by Super Group) 166

Education and skills development 180

CONTENTSINTERVIEW WITH PHETHIWE MATUTU

SCIENCE AND TECHNOLOGY SECTOR OVERVIEW 154

I M P U M E L E L O 1 6 T H E D I T I O N 2 0 1 52

20

TOP MEDIA & COMMUNICATIONSCEORalf Fletcher

Editorial DirectorRyland Fisher

Group EditorFiona Wakelin

General ManagerJudy Twaambo-Chileshe

Head of Brand TransformationLee-Ann Bruce

Business Development ManagersOdelia DonieJustin DanielsMalcolm MatoVanessa WallaceJoanne PrinslooBrian QabaThembelihle Lusu

Financial ManagerHaley Fletcher

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DesignerKamiela Abrahams

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ResearchersMajdah RogersSufyaan BanderkerKelly BredeveldtNazreen Harris

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DISCLAIMERAll rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior written consent of Top Media & Communications (Pty) Ltd T/A Topco Media Reg. No. 2011/105655/07. While every care has been taken when compiling this publication, the publishers, editor and contributors accept no responsibility for any consequences arising from any errors or emissions.ISBN: 9780620524063

CONTENTS

KEY FEATURES

Interview with Rob Davies 10

Interview with Jacob Maphutha 14

Interview with Phethiwe Matutu 20

Interview with Fred Robertson 54

Interview with Vivian Reddy 62

Interview with Lynne Brown 76

Interview with Nhlanhla Nene 90

Interview with Aaron Motsoaledi 108

A selection of South Africa's top empowerment leaders 118

Interview with Iqbal Survé 134

Interview with Luvuyo Rani 156

Interview with Thulas Nxesi 164

EDITORIAL

B-BBEE Advisory Council 26

South Africa's most empowered companies 33

Empowerment pioneers 69

Car reviews 178

Future of Empowerment Conference report 195

Oliver Empowerment Awards 204

A - Z Company Listing 225

INTERVIEW WITH ROB DAVIES

A SELECTION OF SOUTH AFRICA'S TOP

EMPOWERMENTLEADERS

10

118

I M P U M E L E L O 1 6 T H E D I T I O N 2 0 1 5 3

CREDITS

TOGETHER ADVANCING SMALL ENTERPRISE DEVELOPMENT

If you have been battling to get paid for services rendered or goods provided to the Public Sector, don’t despair. We’re here to help. Contact the Seda Public Sector SMME Payment Assistance Hotline on 0860 766 3729 during the week between 06h00 and 18h00, fax us: 086 680 2113 or email us: [email protected]. Provide us with a purchase order number, invoice number, invoice amount and the Department involved and you’ll see that IT PAYS TO PLAY BY THE BOOK.

2414

It pays to support the payment of small business and co-operatives

Impumelelo 297x210 watertank.indd 1 18/09/2015 15:52

FEATURED CLIENTS | EDITORIAL

AAfrocentric Health 112 Argon Assessment Management 13Audit Risk Management Solutions 222 Artisan Development Academy 182Artisans Training Institute 224Aurecon 19

BBearing Lynk 87BL Williams Construction 73Britehouse 160Bulichule Training and Consulting 184

CCity of Tshwane 194Conlog 161Corporate Skills Development 190Crane Construction Consultants 98

DDentsu Aegis Network 148Department of Science & Technology 20Desto 188

EEdit Microsystems 177Ekurhuleni Artisans & Skills Training Centre 186Evaluations 94

FForward Air and Sea 73

GGroup Five 82

IIsilumko Staffing 32Ithala Development Finance Corp 131Ithuba Valves & Industrial Supplies 86

KKezla Investments 185Kukua Development Corp 193

LLunthabe Engineering 84

MMaadima 92Mani Industries 100Morvest Group 142/152MTN 146

NNashua 144

OOpen Trade Training Centre 192Orizoe Services 85

PPetro SA 176Phatshoane Henney Attorneys 123Poynting Direct 150

RRed Edge 203

SSea Harvest Corporation 52SEDA 4Senter 360 139SSG Group 200Stadium Management SA 8/78Super Group 168

TTata Africa Holdings 172TOTAL SA 174Tourvest Travel 127Tshwane Air 73Tumi IFC

UUIF 139Umso Construction 202

VVending Solutions 101 Vukile Property Fund 104

WWildlife Pharmaceuticals 114 Woodford Car Hire IBC Work Dynamics 192


F E A T U R E D C L I E N T S

EDITORIAL | EDITOR’S LETTER

It is amazing that more than 20 years into our democracy there are still companies resisting transformation and empowerment. Fortunately, they appear to be in the minority.

Transformation and empowerment are part of South Africa’s reality and are necessary if we want to address the legacy left for us by apartheid and colonialism.

It should be supported because it is a way of broadening the economic base of South Africa which will ultimately benefit us all, including businesses that used to be white-owned.

When we became a democracy in 1994 – and many of us voted for the first time – there was an expectation among the majority that lives were going to change for the better. But the expectation was not that this should happen overnight.

Over the past 20 or so years, government has made many attempts to address the economic disparities in South Africa, including employment equity and black economic empowerment legislation.

There have been many mistakes along the way, but government has always been quick to realise these mistakes and to make amends.

The new B-BBEE Codes are part of the government’s latest attempts to make sure that transformation of our economy happens in a meaningful way. It draws on lessons learnt over the past 20 years.

In Impumelelo, we celebrate empowerment and transformation. In this edition, we look at the implications of the new Codes. But we also celebrate the achievements of black business people who have overcome tough economic realities to succeed. We hope that others will also be able to learn the same lessons business people have learnt over the past two decades.

We celebrate the winners of the Oliver Empowerment Awards and we reflect on our first, and hugely successful, Future of Empowerment Summit.

Enjoy the read and continue to support our country’s economic transformation in which all South Africans will be empowered.

Ryland FisherEditorial Director

EMPOWERMENT FOR ALL


The year 1994 saw South Africans exercise their right to vote, many for the first time. Free and fair elections heralded the birth of the rainbow nation – a nation with a solid constitution and bill of rights, a democratically elected president and parliament. Yet economic empowerment still eludes a large part of the population.

South Africa's disciplined fiscal framework is aimed at promoting domestic competitiveness, growth and employment. Key economic reforms have given rise to a high level of macro economic stability. However, despite its bright prospects South Africa still faces the key challenges of poverty, unemployment and inequality.

Two key economic frameworks aim to address these challenges. They are the New Growth Path – which aims to create a more developed and equitable economy through the creation of 5 million jobs and the Industrial Policy Action Plan which promotes broader participation by historically disadvantaged groups in the mainstream of the industrial economy. This will entail large-scale investment by the state in infrastructure, small business and skills development.

Black economic empowerment is a key policy instrument aimed at broadening the economic base of the country thereby driving transformation and stimulating economic growth through job creation.

Impumelelo celebrates the leaders of transformation who are critical building blocks in realising the objectives of the National Development Plan – the blue print that will see South Africa achieve its vision of a better life for all. A South Africa where every child that is born has the opportunity to become a future president, a future CEO or a future entrepreneur.

Congratulations to organisations that keep the transformation imperative alive. May you grow from strength to strength.

Khanyisile Thandiwe Kweyama Chief Executive OfficerBusiness Unity SA (BUSA)

Member of the National Planning Commission

KEEPING THE TRANSFORMATION IMPERATIVE ALIVE

KHANYISILE THANDIWE KWEYAMA

CHIEF EXECUTIVE OFFICERBUSINESS UNITY SA (BUSA)

FOREWORD


It gives me great pleasure to write this Foreword for Impumelelo – the publication at the forefront of transformation in South Africa – on behalf of Stadium Management South Africa.

Stadium Management South Africa (SMSA) manages four multi-million rand venues in Johannesburg in the form of FNB, Orlando, Dobsonville and Rand Stadiums.

Like Impumelelo, these stadiums have a long and proud history of celebrating outstanding achievements – people who have struggled against what seemed like insurmountable odds – and been victorious.

The FNB Stadium held the first rally to celebrate Nelson Mandela's release from prison in 1990, which drew over 100 000 people – and was the main venue for the 2010 Fifa World Cup, hosting the opening and closing ceremonies. In December 2013 the three stadiums, FNB, Orlando and Dobsonville in Soweto carried capacity crowds for Madiba’s memorial service.

Orlando Stadium, which has hosted many of Soweto's famous derbies between Orlando Pirates and Kaizer Chiefs, celebrated its fiftieth anniversary in 2009, the same year in which Rand Stadium hosted the Nedbank Cup final between Moroka Swallows and Pretoria University – and the year we celebrated our appointment by the City of Johannesburg to manage these venues.

SMSA is committed to stimulating enterprise opportunities for the local community and we strive to continuously provide world-class services and professionalism.

We are looking forward to what 2016 holds – and are proud to be associated with this leading empowerment publication.

CELEBRATING OUTSTANDING ACHIEVEMENTS

JACQUES GROBBELAARCHIEF EXECUTIVE OFFICERSTADIUM MANAGEMENT SOUTH AFRICA

FOREWORD


THE NEED FOR TRANSFORMATION IN THE SOUTH AFRICAN ECONOMYAN INTERVIEW WITH TRADE AND INDUSTRY MINISTER, ROB DAVIES BY RYLAND FISHER


Black Economic Empowerment has been a key weapon in the government’s arsenal as it tries to transform our society, not only politically and socially, but also economically.

The Department of Trade and Industry (dti), under the leadership of Minister Rob Davies, has been at the forefront of this battle, mainly because the Department and its agencies have been, in most cases, the first port of call for companies – both local and international – wanting to do business in South Africa.

But BEE has not been without its problems – from fronting, to companies finding loopholes in the legislation. This forced government to review the BEE Act and establish a new set of Codes which were set to be implemented from the beginning of May 2015.

In an interview at his Pretoria office, in the dti’s Sunnyside offices, we asked the Minister to tell us about some of the problems that government has encounted with BEE over the years and how these will be addressed in the new Codes.

“I think previously BEE had been spread across the economy without any real link to the issues we’re talking about – which is changing the growth path and empowering people to play a role in that.

“Typically, much of what’s been called BEE has been a share deal of some sort or another where a consortium or individual gets a minority role in a business. Sometimes you find there has been the crude outright fronting of a subordinate in a company as CEO, or a prority position.

“The more sophisticated forms are when people sign a deal, thinking they are going to play a role in the management of the company and they’re actually confined to PR and other minor functions. In the amendments to the Law, to the Act and also to the Codes which are due to come into effect on the first of May this year, we’ve decided to strengthen BEE in the direction of supporting stronger empowerment of people in the real economy.

“Fronting is a form of fraud. Why attempt to do this? Either because you want to tell government that you’ve got a level of empowerment that you don’t have so that you can gain benefits that are available to empowered companies; or you are trying to pretend to the market that you’re something that you are not.

“We have now introduced a commissioner who will receive all fronting complaints. The commissioner will receive complaints and in some cases may be able to find a solution; in the worst cases, there will be prosecutions under the statutory definition. That is the one part of it, but that’s not really the only focus. You have been able to earn points for supplier development and skills development but we found that in practice this has not really worked.

“International companies have been seeking what are called equity equivalents. These companies say they don’t do share deals because their shares are internationally traded.

“Yet the real empowerment of small businesses in manufacturing doesn’t come only because you get a government contract or when you deal with an importer and then come and tell us to acknowledge you because you’re empowered.

“BIG COMPANIES DON’T WANT TO GET INVOLVED OUTSIDE OF THEIR CORE BUSINESS SO THEY DEVELOP A NETWORK OF SUPPLIERS AND THEY ACTUALLY WORK AND EMPOWER THOSE PEOPLE.”

ROB DAVIES | INTERVIEW


Rob Davies is South Africa’s Minister of Trade and Industry and was appointed in 2009. He previously served as Deputy Minister of Trade and Industry and was Chairman of the Parliamentary Portfolio Committee on Finance.

“It comes because there’s a symbiotic relationship between big and small companies. Big companies don’t want to get involved outside of their core business so they develop a network of suppliers and they actually work and empower those people. We want to encourage more of that and skills development is critical.

“What we are saying is that in those two areas, you are going to have to score a minimum of 40 percent of the target; but this is not to let you off ownership. If you don’t score that you’ll go down a place. You’ll draw up your score and then you’re at level four; but you if didn’t score the minimum then you go down to level five. This is what will come in (with the new Codes). It will be an incentive to score in those areas where you make a difference.

“There will also be a special programme on black industrialists so we want to have a special focus there.

“We’re trying to work on the calibration of that. It needs to create many more opportunities for black people to be players in the productive economy. If you get involved in a big company in the productive economy then you mustn’t just be a PR executive, you should be involved in the main business.

“If you are a small business, your horizon shouldn’t just be just to get a contract from government; you need to ask questions about the relationship between yourself and other companies.

“We want an increase in small BEE companies that do not simply define themselves as being involved in the area of supply chain or procurement which just look for any old contract from government and then go and take the business to the real company that does the work – and then the BEE company takes a cut. We want people to get involved and learn the particular business from whom they are going to seek a contract.

“That’s what we’ve been trying to do and I’m sure we will monitor the progress. I’m sure that there will still continue to be challenges but nobody has been able to say we are going in the wrong direction.

“We get lots of complaints about how difficult the new codes will be, but my answer to that is if we were just going to make you tick the boxes differently and come up with the same thing, then there’s no point. It must be something that encourages those sorts of changes in behaviour.”

Davies said that those companies who complained about their ratings possibly changing under the new codes would now have an opportunity to improve them.

He said that transformation should not only be about numbers. It should involve a change in mind-set.

“We need to reach a point where race and gender will not be the first consideration when people employ you or decide to do business with you. That’s where we need to get to. We had the BEE summit two years ago and the President said that the eventual destination is one where we don’t bother about who is who, and where they come from. However we’ve come from a past and that has to be factored in.

“We want to try and move away from racial and gender definition. I don’t know how many times I’ve heard people say that whilst a black person makes an appointment, the actual person who knows the answers is not black. That means that people are not being brought into the business and being empowered. They don’t learn the technology but are there rather as a human resource and government relations person.”

Asked whether he had any targets in sight, Davies said that one of the targets is to develop 100 black industrialists.

“It is not a very big target but at least we can showcase a few people as serious industrialists in the economy.”

IS BEE STILL A FACTOR FOR INTERNATIONAL COMPANIES? IS IT STILL A CONCERN FOR THEM?

“Some of the multinationals noticed that we changed the rules. We’ve changed them on the basis of an assessment that was done. Our view is that we haven’t set the level of ambition so high that no one can qualify. We also gave a long timeframe – I think it was 18 months; they had until May before the new Codes came into force. When we explain to people what the objective is, nobody can say that it is not right.

“If you want one of our incentives you will need to reach a particular level within a particular timeframe.”


“WE WANT TO TRY AND MOVE AWAY FROM RACIAL AND GENDER DEFINITION.”

INTERVIEW | ROB DAVIES

Impumelelo_Argon press ad_297x215_v1_28 August 2015 (Outline).pdf 1 28/08/2015 10:42:47

THE ABC OF THE B-BBEE CODESAN INTERVIEW WITH JACOB MAPHUTHA BY RYLAND FISHER


We wanted to find out whether we were on track with the implementation of the codes, the implications of the codes for business and some of the issues that will be dealt with by the codes.

WHY WAS THERE A NEED FOR NEW B-BBEE CODES? COULDN’T WE JUST HAVE IMPLEMENTED THE OLD CODES BETTER?

Jacob Maphutha: That’s a good question. We believe five years were enough for us to be able to establish that there needed to be a change in terms of how we implement the codes and the makeup of the codes.

The decision that we made as dti, together with the B-BBEE Advisory Council, was to say that if we continue with the old codes, we are not going to expect any kind of radical change.

Rather than just continuing with the codes as they were, we needed to look at some of the loopholes that had resulted in their not achieving what we intended. If you look at the new codes you’ll find that most of the targets are still more or less the same.

This means that we are happy with the targets, but in terms of the touch and feel of transformation, we were just not achieving anything.

WHAT ARE SOME OF THE MAJOR LESSONS THAT GOVERNMENT HAS LEARNT WITH RELATION TO B-BBEE THAT IT’S HOPING TO ADDRESS THROUGH THE NEW CODES. WHAT COULD HAVE BEEN DONE DIFFERENTLY IN THE PAST?

Jacob Maphutha: What we, as government, would like to see is a mind-set that talks to doing the right thing as opposed to

merely being compliant. What we have seen is that people are usually obsessed with compliance. They want to see how they can do the bare minimum to achieve the highest score. That should not be the obsession. The B-BBEE score is important, but it should be the end result of doing things right, of making sure that as a company, as an individual, we implement the codes in accordance with the spirit of transformation.

We found that the problem is that once people are obsessed with labels they go and identify loopholes. Like any other policy, you can never have 100% compliance. People tended to go to the codes and say ‘where are the areas where I can do the bare minimum and get the higher levels’.

WHAT ARE SOME OF THE MOST PERTINENT POINTS OF THE NEW CODES AND HOW WILL THEY IMPACT ON BUSINESS? HOW WILL THEY ACHIEVE THAT MIND-SET THAT YOU’RE TALKING ABOUT?

Jacob Maphutha: It takes time to change mind sets, but we are trying to lead people in the right direction by pointing out that there are certain areas that are priorities for us and, as corporate South Africa, we expect that they would implement them sufficiently and appropriately. For example, the issue of skills development is important. Even the NDP acknowledged that if you don’t capacitate the country, if you don’t build skills among the people in the country, you are not going to achieve the intended growth.

Skills development is one of the priority elements that should be compulsory for all entities to implement and to equip their workers or their employees; we have broadened it even further by allowing companies to also skill people that are not necessarily their employees.

JACOB MAPHUTHA | INTERVIEW


The Department of Trade and Industry (dti) is tasked with driving the government’s agenda on Black Economic Empowerment and the transformation of the economy. In the engine room at the dti’s campus in Sunnyside, Pretoria, is a small team. One of the key members of that team is Jacob Maphutha, Director of BEE Partnerships. In an interview in the middle of March 2015, we sought answers to some questions many people have about BEE and the proposed new codes, which were supposed to come into effect in May.

The old codes did not allow for that. You could do it but you were not going to score points. If you employ graduates and students and give them the experience they need to get employed you will get the points.

That is just one example. The key issue concerns supplier development. It is, in my view, our industrial policy as the dti. In the new codes we say that companies should focus on developing their own suppliers, black suppliers in particular, especially those that are still emerging.

Gone are the days of doing enterprise development for the sake of compliance. We have heard stories of companies who have been dumping money on black companies and then calling that supplier, or, enterprise development. That’s not what we want. We want to encourage the integration of small black companies into the supply chains of the large established companies.

YOU TALKED ABOUT THE NDP. THE MAIN FOCUS OF THE NDP IS REDUCING INEQUALITY AND POVERTY IN SOUTH AFRICA. DO YOU THINK THE NEW CODES WILL ASSIST WITH THIS?

Jacob Maphutha: Yes. The other issue is to make it broader, in terms of having as many people benefitting from B-BBEE.We have to broaden skills development so that there’s no limit to who companies train. We have strengthened the area around procurement and enterprise development. In terms of the ownership element, we have made provision for companies to identify shareholders – not the traditional ones, but communities, youth, women and people who are disabled. This will give opportunities to people who would not otherwise have had those opportunities.

WHAT IS THE ROLE OF THE B-BBEE ADVISORY COUNCIL IN RELATION TO ALL OF THIS?

Jacob Maphutha: The B-BBEE Advisory Council is appointed in terms of the B-BBEE Act, which says that there should be a body that advises the president.

The president is the chairperson of the Council - and the Council’s main role is to serve as an advisory body to the president and government on the direction which B-BBEE should take. They meet about four times a year to discuss pertinent issues around B-BBEE and its linkage with other policies, such as the NDP and other industrial policies. Their main role is an advisory one.

You’ve then got the B-BBEE Policy Unit which sits within the dti. This is where the policy is refined and implemented. The

minister will be appointing a B-BBEE commission very soon and the commission’s role will be to be a watchdog in terms of implementation.

We will have a commissioner, deputy commissioner and other members and they will deal with fronting. As you know now, the new Act criminalises fronting.

The commission will play a critical role in terms of administering issues around fronting and also monitoring a proper impact assessment. The B-BBEE unit here will still remain focussed on policy and decision making, but in terms of implementation the commission will be monitoring and providing relevant information that will inform the minister, the B-BBEE unit and council with regard to whether we are making progress or not.

YOU’VE SAID THAT FRONTING IS GOING TO BE CRIMINALISED IN THE NEW CODES?

Jacob Maphutha: It’s already criminalised in the memo for the Act which is the primary legislation that went through the parliamentary process. The codes are secondary to the Act. They don’t have to go to parliament. The minister is empowered to issue them into gazette.

WHAT KIND OF PENALTIES ARE THERE FOR PEOPLE WHO ARE FRONTING OR FOR PEOPLE WHO ARE NON-COMPLIANT?

Jacob Maphutha: The Act talks about people being sent to jail for a period of up to ten years. People can be jailed and their entity’s turnover can be docked up to 10%; this is dependent on the nature and value that was derived from that particular transaction. If you are a mature person, you can be taken to jail for up to ten years. If it’s an entity, your turnover can be docked.

HOW MUCH EMPHASIS IS THERE ON PROCUREMENT IN THE NEW CODES?

Jacob Maphutha: The entire enterprise and supplier development element constitutes about 40% of the B-BBEE scorecard.

You can see the importance of this. With regard to enterprise and supplier development, the emphasis is now on procurement from companies that are at least 51% black owned. There are targets for women and for designated groups, youth, unemployed people, disabled people and supplier development.


This is key because we want to create as many opportunities and sustain them by ensuring not only that there are market opportunities for black enterprises but also that they get the opportunity to be developed by the large established enterprise so that they are integrated into the mainstream economy.

The issue of ownership is something that was exploited, not only by whites but also by blacks in terms of the old B-BBEE Act.

WHAT ARE THE MAJOR CHANGES FOR THE SHIFT IN OWNERSHIP IN THE NEW CODES?

Jacob Maphutha: The target is still the same – 25%. We haven’t changed the target as it is; the key change was to ensure that the ownership scorecard is more broad based. It is not narrow in terms of only encouraging one or two people to benefit.

Of course we do need entrepreneurs and those are the drivers of growth, we have to accept that but also we’ve made a provision to have the broad business of the B-BBEE incorporated into that ownership element. We have also ensured the issue around investing because one of the things that we see is black people are shareholders on paper but whatever profits they make go to the funders – whether it’s banks or the companies themselves.

We have also ensured that there is net equity, to ensure that black people who take shares in companies are not forever indebted even though you are a shareholder. What we have seen is that the company is benefitting; but when you dissect what value has been created in my hand, you find that there’s nothing that has been created in your hands as a black. We have tried to ensure that when people take loans to buy shares, they are not forever indebted and there’s no vesting of their shares.

HOW WILL YOU ADDRESS THE ISSUE OF FINANCE – BECAUSE WE ALL KNOW THAT ACCESS TO FINANCE IS A MAJOR IMPEDIMENT FOR MANY PEOPLE WHO GO INTO BUSINESS? FOR INSTANCE, WILL YOU BE ABLE TO PUT PRESSURE ON BANKS TO BECOME MORE RECEPTIVE TO SMALL BUSINESS, TO BLACK BUSINESS?

Jacob Maphutha: Yes. In fact, the Financial Services Charter is being aligned and reviewed. One of the things that is going to be addressed is the issue around access to funding - or access to finance for SMEs.

We expect that the financial houses will ensure that there is sufficient funding for B-BBEE. However, we have institutions such as the IDC (Industrial Development Corporation) and the National Empowerment Fund, which serve the previously

disadvantaged – and their role is to ensure that they fund B-BBEE and industrialisation.

OBVIOUSLY UNEMPLOYMENT IS ONE OF THE COUNTRY’S BIGGEST PROBLEMS. DO YOU THINK THAT THE NEW CODES WILL ASSIST WITH JOB CREATION?

Jacob Maphutha: Yes they will. Interestingly, the Commission on Employment Equity has shown that companies don’t necessarily have a problem employing or complying with employment equity at a lower level – junior management and entry level; the problem is in middle management, senior management and top management. For some reason, you find there’s a concentration of black people around junior management level.

WHY ARE PEOPLE NOT MOVING UP TO MIDDLE MANAGEMENT AND SENIOR MANAGEMENT WHERE DECISIONS ARE MADE?

The new scorecard puts greater emphasis on middle management, senior and top management. We have introduced what we call absorption; in other words, if you skill and absorb people that were not employed before, points accumulate. This should encourage companies to train not for the sake of training, but to ensure that at the end of it people are being absorbed. This should also contribute towards addressing the issue around unemployment.

HOW MUCH EMPHASIS IS THERE ON LOCALISATION AS OPPOSED TO BLACK ECONOMIC EMPOWERMENT IN THE NEW CODES?

Jacob Maphutha: We have tried to link the two. Because one of the things that we saw emerging was the issue around what you might call black import fronting when a black person goes to China to buy goods and resells them without adding any value to that product. Some black companies do this because they think they can easily score points and make money; however that’s not how B-BBEE should be implemented.

In the new codes, companies – whether they are black or white – are not allowed to import in this manner. If the product has been designated by government for local production you will lose points if you decide to import.

B-BBEE should help us in creating competence among black people. They should be able to own factories; they should be able to add further value in South Africa if they import.


JACOB MAPHUTHA | INTERVIEW

We have also introduced a gatekeeper to ensure that 25% of your cost of sale should be coming from non-imports. Some might say that 25% is too low but this is a start and it is something that we can always upscale. These are some of the things that we’ve done to ensure that we encourage not only white companies, but black companies to localise, too.

DO YOU BELIEVE THAT THE NEW CODES WILL ASSIST IN MAKING SOUTH AFRICA A MORE COMPETITIVE ECONOMY?

Jacob Maphutha: Yes, they will if they are implemented properly. But there is this notion that B-BBEE equals poor quality. I don’t know where it comes from, but we have never stated that a company should take on someone who is not interested in business, who knows nothing about business – and make them a supplier.

All that B-BBEE is saying is that there are black people who have potential, either as employees or suppliers. They need opportunities which might be closed to them for many reasons linked to the past, linked to many factors.

We are saying that you should give those people the opportunity to be at the level where you, as a company, want them to be, and we don’t believe any company would want to procure a product that they think will not assist them in being competitive.

We encourage companies to implement B-BBEE for competitive reasons. Black companies should be competitive. That is why there are certain thresholds. For instance, we expect that as a black company, you should be able to stand on your own above R15-million. At this level, we feel that you don’t need development. You don’t need assistance. We expect that you should be able to compete in the market with any other company whether local or international.

We cannot compromise on quality and B-BBEE is not there to degrade any sort of quality and competitiveness.

Many business people complain about the red tape and bureaucracy that face people wanting to do business in South Africa.

HOW CAN YOU ENSURE THAT THE NEW CODES DO NOT ADD TO THAT RED TAPE AND BUREAUCRACY?

Jacob Maphutha: As dti we are against red tape. We used to have a project (when we still had the unit for small business) that dealt with the reduction of red tape, especially for small

businesses. This is why a company that has a turnover of under R10-million is exempted from B-BBEE.

However, B-BBEE should not be seen as just compliance. We want you to promote people with potential and ensure that you build your suppliers. It benefits you as a company.

WE OFTEN HEAR PEOPLE QUESTION THE NEED FOR B-BBEE. DO YOU THINK THAT THERE WILL EVER COME A TIME IN SOUTH AFRICA WHEN THERE WILL NO LONGER BE A NEED FOR B-BBEE?

Jacob Maphutha: I want to believe so; sometime in the future, if we reach a level where the past has been addressed and we are well integrated as a society. But as long as we have this inequality, B-BBEE will still be necessary.

All we need is diversity in the workplace, with wealth being created among black people; and, once that has been done we can look back and ask whether we still need B-BBEE. The President recently talked about the 3% black ownership of the JSE as one of the indicators of the transformation of our economy. It shows that we still have a long way to go if we want to reach a situation where all of us are satisfied that the playing field has been levelled. Only then might we ask whether we still need B-BBEE.


INTERVIEW | JACOB MAPHUTHA

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