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

2. Presentation Content Purpose for Amendment Harmonisation/ Consistency
BBBEE Commission

3. 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

4. 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

5. 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

6. 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

7. 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”)

8. 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