B-BBEE Amendment Bill [B42-2012] Public Hearing Portfolio Committee: Trade and Industry

Presentation Content Purpose for Amendment Harmonisation/ Consistency BBBEE Commission

Kicked started BBBEE initiatives as early as 1995 BBBEE in Vodacom Kicked started BBBEE initiatives as early as 1995 Pioneering SMME development in ICT Sector Skills training focus on Black employees 5% Black equity deal [heavily discounted] in 1996/7 that realised approximately R2bn into economy in 1999 Vodacom/Vodafone involved in BBBEE drafting process since 2004 Vodafone closely engaged in/fully supportive of Vodacom’s BBBEE initiatives – both non-equity & equity View BBBEE as integral part of overall strategy Incorporated into performance rating of senior executive team Proudly Level 3 BBBEE Contributor Concluded 5th largest broad-based BEE deal Current Annual contribution to BBBEE = R2.6bn

Vodacom supports stated purposes to address: Purpose for Amendment Vodacom supports stated purposes to address: Circumvention and strengthen compliance Align all legislation on BBBEE to primary Act monitoring /reporting practices Does this amendment speak to purpose? Inconsistency in provisions on application Removal of trumping provision weakens alignment Conflicting provisions

Is there a need for Policy Stability and why? Harmonisation/ Consistency Is there a need for Policy Stability and why? Yes builds commitment to sustainable initiatives Builds confidence Enables stakeholders to plan for longer term (and systemic initiatives) Does the amendment pass the policy stability litmus test? No Implementation rules different between private and public sector S9(6) read with s10(2) is in conflict with each other s9(6) allows for public entities and Organs of State to set higher targets than those in Codes (subject to Minister approval)…whilst S10(2) provides for Codes/Sector Codes to be the only legally binding instruments for implementation of BBBEE

Could be open to abuse by public entities if Harmonisation/ Consistency Why the concern? Could be open to abuse by public entities if justification for higher targets not based on sound economic principles, sectoral characteristics or empirical research Even more important to bring long-term certainty to BBBEE policy for the communications industry [strategic driver of the SA GDP] so that long-term decisions which will substantially influence broad-based economic growth can be made Create uncertainty in key economic sectors under jurisdiction of an organ of state and negatively affect investment Conflict with the binding provision of Sector Codes - public and private entities within the applicable sector

How should this issue be addressed and why? Harmonisation/ Consistency How should this issue be addressed and why? Alignment is key Substantial degree of consistency between the empowerment requirements of other laws and the BBBEE Act required Certainty in terms of the rules of the game Evenness in implementation Not subject to the specific interest of public bodies BBBEE Act ought to be the official South African “Bible” on BBBEE Any other regulation or law in conflict with the BBBEE Act must be amended and aligned to the Act Clarity can only be achieved through explicit approach (i.e. “trumping”)

Is there a need for BBBEE Commission? Is a new body required? Why will it be superior to existing administrative structures in DTI? Preference to strengthen powers and capabilities of BBBEE Division of DTI Lessens financial burden on government Limits number of bodies with BBBEE responsibility Less confusion on scope and powers of different authorities DTI can increase resources (financial and human capital) If Commission established the Commissioner should be appointed by Parliament Ensures impartiality Ensures accountability to Parliament