ICT Empowerment Charter on track

Johannesburg, 15 Apr 2004

The issue of indirect ownership has emerged as one of the key concerns in the run-up to a final draft of an Empowerment Charter for the ICT industry. This is according to the Empowerment Charter Working Group, which released a second draft of the Charter for the ICT industry this week. Earlier, industry players said another key issue was the lack of scorecards in the first and second drafts of the Charter.

A third draft of the ICT Empowerment Charter is to be released after a series of workshops over the next three weeks, ahead of another mini-summit on 6 May, where players will finalise work on the Charter. Submissions will close on 17 May and the projected date to launch the final Charter is 25 June this year.

The Empowerment Charter Working Group said in a statement this week that it had conducted exhaustive research during its national roadshow in the past two months. Working Group chairperson Dali Mpofu said there had been a positive response to the roadshow process, which was designed to gather input from as many stakeholders as possible.

The statement said: "A serious concern that materialised from the roadshows is the issue of indirect ownership, whose role needs to be clarified as it is allegedly open to abuse. It has been argued that ownership by entities such as the Public Investment Commission or other pension funds not be considered for BEE purposes. However, a counter argument has been advanced that where such equity is held on behalf of employees in a form of vehicles such as pension funds investment companies, affiliated nominee BEE shareholding need to be taken into account for purposes of BEE. This issue is currently being debated by the Task Team."

"By giving all the relevant stakeholders the opportunity to hear first hand the ideas in and behind the Draft Charter in an open forum, the workshops were able to elicit an in-depth debate from the participants to give their input."

"We`ve had extremely positive responses to the workshops, thereby showcasing the levels of interest and legitimacy of the entire process and vindicating our decision to take the process to the people," Mpofu said.

Challenges that emerged from the working sessions include concerns regarding access to funding by black businesses to acquire equity in ICT enterprises. Venture capital markets available for investment should be broadened to include prospective entrepreneurial black-controlled enterprises. It was submitted that State Owned Enterprises (SOE`s) when wholly owned by government, should not be regarded as black empowered enterprises. However, if partially owned by government, the balance of the equity in the hands of black people shall determine the extent to which such an SOE is empowered.

Issues that will be redressed in the Final Charter include a lack of access to funding and unfavourable dividend policies. Proposals regarding preferential procurement, management control and skills and enterprise development will also be deliberated in the conclusion phase of the final version.

The final draft of the Charter will also include BEE targets. Last week, some stakeholders voiced concern about the omission of a scorecard from the first drafts. Mpofu responded by saying the scorecards had been omitted to allow players to focus on the principles of the proposed Charter first.