Lack of BEE targets causes division

Johannesburg, 08 Apr 2004

The second draft of the ICT black economic empowerment (BEE) charter is to be released later today, amid a debate over the omission of targets or a scorecard in the draft.

The second draft includes input from the empowerment working group`s roadshow to all nine provinces to promote discussion around the principles of the proposed charter.

Dali Mpofu, chairman of the working group, said this week that the roadshow had been a success as stakeholders had been able to focus on the principles of the proposed charter without focusing on the issue of BEE targets.

"There will be no targets in the second release of the draft as we have wanted to focus more on discussing the principles of the charter during the roadshow," he said.

However, the process has drawn criticism from some members of the ICT sector who feel the omission of specific indicators is detrimental to players who want to know what milestones will be met in implementing BEE.

'Key areas of debate`

Soria Hay, executive director of integrated equity and debt company Bravura, says she does not think the June target for the final charter draft can be met, given that the very issues stakeholders wish to debate are omitted from this draft as in the previous draft.

"The second draft charter once again does not stipulate targets or percentages, yet these are the key areas of debate. By leaving out targets, the new draft charter does not go far enough in providing practical motivation for enterprises in the ICT sector to take the necessary steps to truly work toward BEE," she says.

She adds that the omission of targets is disappointing when one compares this charter to that of the financial sector, which was compiled in the same amount of time as a detailed and broad-based document.

While it has been the working group`s intention to focus on BEE principles, Hay says the BEE principles included in draft charters are the same principles applied across all industries, certain of which are government-prescribed.

She says BEE principles have already been clearly outlined and accepted, particularly in light of the strategy document and balanced scorecard published by the Department of Trade and Industry in March 2003.

The balanced scorecard specified weightings to be applied to BEE components, and these are standard across all industries, she says.

Hay concludes that the only component of the balanced scorecard specific to the ICT sector, which the draft charters address and which requires discussion, is the residual component, which aims to motivate industries to identify-specific initiatives that result in the formulation of sustainable programmes.

"In this instance the ICT charter favours enterprises that take part in industry-accredited projects aimed at accelerating access to the sector."

Not that simple

However, Terence Sibiya, principal at executive search company Heidrick & Struggles, says the issue is not that simple.

"On the one hand, government has laid down a framework for BEE, but it is up to industry to work within that framework. Government has tried to be non-prescriptive in this framework and it is only if the industry is unable to work within it that government may intervene.

"It is not just a matter of taking up targets that government has set, but rather laying down specific targets for ICT," he says.

However, Sibiya believes the omission of targets and a scorecard is a cause for concern and could potentially derail the process.

"It is important to remember that the market needs stability and the people want to know what targets they are going to be required to meet. There has been some wonderful comment on principles of the BEE charter, but the targets are a point of interest and their omission is postponing inevitable debate that could bring further delay and open up the possibility of derailment."

Sibiya disagrees with Hay`s comment that there is not enough time to meet the final draft deadline of June.

"There is still enough time to talk about targets and to give people opportunity to give their input. The working group is aiming to release the final draft at the end of June and I expect that this will happen," he says.

The spirit of the charter

Zeth Malele, CEO of arivia.kom, says he understands why the working group has excluded the targets.

"There has been a lot of debate about targets and debate takes away from the energy that should go into reaching consensus on key elements of the charter, including skills and enterprise development and ownership rather than debate targets forever," he says.

People should remember the spirit that drives the process of transformation, and that it is not solely about meeting targets, he says.

"We are not wanting to bash the heads of people to get them to conform to targets, but create players who will work in the same spirit to bring about change. Numbers and targets are there to measure BEE, but we should rather focus on the issues and bring about change."

Malele says he understands that some companies will not be able to make 100% of all the targets, but will be able to contribute more in different areas.

Malele believes the process of consultation has been important to bring "buy-in" from the industry. He says the working group will have to conduct the change management carefully in order to line up BEE within ICT to the other sectors.

Mpofu was not available for comment at the time of going to publication.