As the process of formulating the black economic empowerment (BEE) ICT charter draws to a close, some multinationals have called for more time to discuss the relevant issues and a return to the principles of BEE.
The issue of equity ownership re-surfaced after the third draft of the charter, which includes BEE targets, was released on Monday.
Dali Mpofu, chairman of the charter working group, said at the release of the third draft that the majority of the sector believed there should be no exclusions in the equity ownership debate. The charter scorecard also states that there will be no exclusions on any of the scorecard`s core components and there will be a minimum score that needs to be obtained in each of the components.
These issues, and others, are to be debated at a one-day indaba tomorrow ahead of the final cut-off date for contributions to the charter in about 10 days.
Back to the principles
Stafford Masie, Novell SA country manager, calls for discussions to return to the principles of why BEE was called for in the first place.
"While equity ownership is an important issue, we need to focus on achieving true empowerment and not only wealth-sharing. Skills transfer, the composition of staff and management, procurement and corporate social investment [CSI] are important issues and we need to get back to them," he says.
Masie says while equity ownership is important, more time is needed to discuss the multinational equity ownership issue and the equity ownership targets.
"I don`t think we have the time to resolve this issue before the cut-off for submissions. The timeframe is unrealistic. Novell SA cannot give up equity as it is not a local company - its shares are not traded here and the company has no financial wing in the country."
Microsoft SA MD Gordon Frazer echoes Masie`s concerns, saying it will be unfair if multinationals are not recognised for the BEE done in other areas if they do not meet an equity minimum requirement.
"What worries me most is the process of formulating the charter and the timeframe that is being worked to. There are a lot of issues that are not clarified in the third draft and given the very short, almost unrealistic timelines, one has to question how much discussion can be done in the 10 days left to resolve these issues before the deadline for submission closes," says Frazer.
Kelvin Reynolds, CEO of Oracle SA, welcomes the fact that the third draft states that the working group has committed itself to finding a solution after the majority of local submissions recommended that equity equivalents should not be considered in any form.
"It is a positive indication that the particular circumstances affecting multinationals are being acknowledged. Oracle will continue to provide the ICT Charter Working Committee with input."
What about CSI, enterprise development?
The residual category of the charter, which assigns 11 points on the scorecard for bridging the digital divide, is another key issue to be discussed at the indaba tomorrow. Novell, Microsoft and Oracle have stated that the weighting of eight points assigned to projects accredited by the future ICT council and three points for CSI is lopsided.
Reynolds comments: "The three points assigned to CSI could be increased. In Oracle`s case, much of this investment is targeted at projects involving upskilling and education of the youth, which has been identified as an important element in the charter."
Masie says the balance of the residual category should have gone to CSI.
The multinationals have also expressed concern about the seven points assigned to enterprise development. Frazer and Reynolds commented earlier in the week that much of their business is conducted in the channel and aims at uplifting smaller enterprises. By only assigning seven points instead of the government`s recommended 10, they feel they will not be properly credited for work done in enterprise development.
Masie believes targets should be set for enterprise development based on the kind of services they offer. "For example, the companies we buy our stationery from should be 100% black-owned, then as we move up the ranks, hardware partners could be 25% black-owned," he says.
The indaba will be held at Vodaworld tomorrow. A period of about 10 days will then be given for final submissions, after which the working group will collate all the information for the final draft, which is scheduled to be released on 25 June. The working group has said in the past that it will allow an extension if more time is needed to resolve issues.
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