Presentation to: PORTFOLIO COMMITTEE: TRADE AND INDUSTRY Old Assembly Chamber, Old Assembly Wing Wednesday 13 March 2013 (09: :05)

 Black Economic Empowerment  Challenges for BBBEE & Management  Key Principles of BBBEE  BBBEE Legislation  Government’s BBBEE Strategy  BBBEE Bill [B ] Input  Input into Function  Input into Form  Appendix A: Background - Legislation and the Disability Applicability  Appendix B: The Challenges facing the Disability Sector in the South African Financial Services Sector  Appendix C: Income Distribution of People with Disabilities  Recommendations  Questions & Answers

“Black advancement” is a means of empowering blacks both to develop the skills and abilities to Successfully fill higher-level positions and to take control of resources. Linda Human

Black Economic Empowerment (BEE)  Legacies of colonial and apartheid disempowerment of black majority  Vast racial inequalities in distribution of and access to wealth, income and skills  Restricted economic potential and contribution of black people to growth and development: limited ability to expand productive base of the economy Rationale for BEE in South Africa *

Challenges for BBBEE & Management (1) A Strategy “To bring about a structural change that will ensure that the participation of black citizens in the economy is commensurate with their demographic dominance” (DTI, 2002) Definition of BEE *

Challenges for BBBEE & Management (2) BEE Commission (2001):  Socio-economic process  Aimed at redressing imbalances of the past  Substantially and equitably conferring and transferring  ownership, management and control of financial and economic / resources  To ensure broader and meaningful participation in the economy by black people  Achieve sustainable development and prosperity - Definition of BEE (cont.) *

1. Black Economic Empowerment is broad-based. 2. Black Economic Empowerment is an inclusive process. 3. Black Economic Empowerment is associated with good governance. 4. BEE is part of our growth strategy.

“In the end the individual will be responsible for his or her well-being. It is through the propagation of this kind of ethos that we will be able to avoid the development of a culture of entitlement which is another form of dependency”  (W Nkuhlu)

Labour Relations Act Employment Equity Act Skills Development Act Basic Conditions of Employment Act Preferential ProcurementPolicy Framework Act Protected Disclosures Act Promotion for Accessof Information Act

11 The Poverty Barrier The Skills Barrier The Business Barrier The Opportunity Barrier Employment Equity/Job creation Corporate Social Investment Skills Development & Employment Equity Affirmative Procurement Ownership And Management Equitable Economic Opportunities Enterprise Development Emerging black middle class & Investors Black entrepreneurs Black workers and job-seekers Black unemployed & rural poor Broad Based Beneficiary Base

 Page 3 Section 1. (c) Add in the definition of broad-based black economic empowerment "This would include black women, black workers, black youth organised and registered groupings, black people with disabilities and black people living in rural areas".  Page 3 Section 1. (c) (e) after local content procurement; and "with the careful screening of BBBEE enterprises that has the full application of an economic benefit for black women, black youth, black people with disabilities and black people living in rural areas".  Page 4 Section 2 (b) (g) Add after informal business sector “and "black people with disabilities.  Page 4 Section 2 (c) (h) Add after increasing effective black owned "; black women-owned and black disabled people owned.“

 Page 5 Section 7 (b) after black owned and managed enterprises "particularly black women; black disabled people and black people living in rural areas;"  Page 7 Section 13F (e) after broad-based black economic empowerment managed by black people; "particularly those of black women; black disabled people and black people living in rural areas;".  Page 7 Section 13I (1) Add after performance of its functions "; for example in areas around rural and urban economic opportunities to black people; economic opportunities for black women; and economic opportunities for black people with disabilities."  Page 9 Section 13I (b) (ii) Add after designated by the Commissioner "(iii) be represented on the basis of race, gender, and disability;"

 Page 4 Section (g) Add after sector charters "That those companies; and or individuals that are found guilty of fronting, be sanctioned by their names; and or those of their companies be put onto a public "white list" or register.  This list shall or register indicate to all organs of state whom not to do business with; i.e. the procurement of goods and services from such entities found to be on this list or register;  This list or register shall be reviewed by the Department of Trade and Industry on an annual basis.“

 Page 4 Section (g) Add after sector charters "That those companies; and or individuals that are found guilty of fronting, be sanctioned by their names; and or those of their companies be put onto a public "white list" or register.  This list shall or register indicate to all organs of state whom not to do business with; i.e. the procurement of goods and services from such entities found to be on this list or register;  This list or register shall be reviewed by the Department of Trade and Industry on an annual basis."  Page 5 Section 9. (b) (e) after codes of good practice for their sector "and that the progress of these charters and codes of good practice be reviewed every 3-5 years;“

 Page 6 Section 13 (b) iii Add after public entity may have "(c) Shall by being publicly published a "white list" which shall include all enterprises, legal entities, companies, in whatever form and individuals who are found guilty of committing "fronting".  "(d) Shall be precluded from providing any procurement of goods and services for a period of 10 years; OR any other punitive fines as deemed reasonable by the Ministers of Finance and Trade & Industry and in consultation with the BBBEE Commission“.  Page 7 Section 13F (h) after broad-based black economic empowerment and "and thereby holding these organs of state accountable (i.e. Including their Performance Management Contracts); whether it be a CEO; CFO; COO; an Executive Chairman; a Deputy Director-General; Director-General; Deputy Minister and Minister;” 

 Page 7 Section 13G (b) (3) after Add new point "(4) These reports be published in the public domain and that the appropriate monitoring and evaluation mechanisms are put in place to hold the management; directorships; accounting officers and political heads accountable, responsible and if need be to recommend disciplinary measures and sanction against these individuals;"

 Legislation 1: South African Constitution of The Republic of South Africa (Act No. 108 of 1996) - Chapter 2: Bill Of Rights  Legislation 2: Equality Legislation Promotion of Equality and Prevention of Unfair & Discrimination Act (Act No. 4 of 2000)  Legislation 3: Empowerment Legislation - Broad-Based Black Economic Empowerment Act (Act No. 53 of 2003)  Legislation 4: PIC Legislation as an Example for Disability Empowerment - No. 23 of 2004: Public Investment Corporation Act,  United Nations Convention on The Rights of Persons with Disabilities Article 27 - Work and employment

 The intent of the Financial Services Charter (FSC) should be converted to implementation by amongst others, the PIC, NEF, IDC and other Financial Sector Role Players.  The element of Corporate Social Investment of the FSC in terms of Sections 9 and 10, needs to be developed to include and integrate the Disability Sector into mainstream financing (Corporate Social Investment % of post tax operating profit directed p.a. to CSI 0.5% 3 points).  Internationally, corporations spend under 1% of their income on CSI.  If the PIC, NEF, IDC AND OTHER FINANCIAL SECTOR ROLE PLAYERS invests 0.30% of its equity, it could serve as a catalyst for the rest of the Financial Services Sector to also invest and assist in the management of the Mechanisms providing Access to Finance for Disabled People (AFDP) with the Disability Sector.  This would ensure that the Disability Sector globally becomes not only a shining example of being a Business Case, but is integrated into mainstream Broad-Based Black Economic Empowerment and thereby the growth of the South African economy.

Black AfricanColoured Indian or AsianWhiteTotal No income R 1 - R R R R R R R R R R R R R R R R R R R R or more Total Gauteng Statistics South Africa - Census 2001 Geography by Monthly income by Population group for Disabled, Person weighted

Recommendations to the Portfolio Committee to:  Advise the Ministers of Finance, the Trade & Industry, Public Enterprises, Economic Development, Monitoring & Evaluation, Women, Children & Persons with Disabilities and the Minister : National Planning Commission to co-ordinate Mechanisms providing Access to Finance for Disabled People (AFDP).  Invite the PIC, NEF, IDC and other Financial Sector Role Players to participate in this initiative.  Provide timelines and accountability mechanisms to report-back to this Portfolio Committee annually, every three years and every five years.  Building the economic basis for people with disabilities and thereby begin to address the economic injustices that face 5.2 million persons living with disabilities. If we as a collective will make any meaningful difference in this country, then it is by building a sustainable capital base.  Advise the Ministers of Finance, the Trade & Industry, Public Enterprises, Economic Development, Monitoring & Evaluation, Women, Children & Persons with Disabilities and the Minister : National Planning Commission to co-ordinate Mechanisms providing Access to Finance for Disabled People (AFDP).

Recommendations to the Portfolio Committee to:  Invite the PIC, NEF, IDC and other Financial Sector Role Players to participate in this initiative.  Provide timelines and accountability mechanisms to report-back to this Portfolio Committee annually, every three years and every five years.  Building the economic basis for people with disabilities and thereby begin to address the economic injustices that face 5.2 million persons living with disabilities. If we as a collective will make any meaningful difference in this country, then it is by building a sustainable capital base.  Currently, disability is being left out of the economic empowerment framework. This obviously points to the fact that Disabled Persons (estimated at 4,8 million - based upon the fact that 10% of the South African population is people with disabilities) are once again not granted the full citizenship we so clearly deserve (let alone black disabled people marginalized even further.  Disability Economic Empowerment is constantly not always being integrated in Broad-Based Black Economic Empowerment.  Therefore, it appears that disabled people are required to accept citizenship without the economic empowerment rights that is guaranteed by legislation.  The process followed with the Department of National Treasury and the PIC, NEF, IDC and other Financial Sector Role Players must be as follows:  Integrate People with Disabilities into ALL Programmes

“We are Africans not because we are born in Africa, but because Africa is born in us. Look around you and behold us in our greatness. Greatness is an African possibility; you can make it yours.” Chester Higgins Jr.

Presentation to: PORTFOLIO COMMITTEE: TRADE AND INDUSTRY Old Assembly Chamber, Old Assembly Wing Wednesday 13 March 2013 (09: :05)