By Andile Khumalo

Co-founder, Sanlam Gauge

I totally underestimated the amount of work required to compile the Sanlam Gauge. I did not know just how broken the system of driving and measuring B-BBEE is and how that affects its implementation. I have come to learn that one of the biggest bottle necks is the incapacitation of BBBEE sector councils.

Almost all sector councils agreed that transformation is happening too slowly, that it is not meaningful particularly at the management and ownership levels and that after 28 years of democracy it is time we reassess the B-BBEE framework and address areas that are not working.

Before publishing the Sanlam Gauge report, my team and I consulted and met with the following sector councils: AgriBEE, Construction, Financial, Forestry, Information Communications Technology, Marketing, Advertising & Communications, Property and Tourism. We also met with a representative of the Department of Transport as well as the Minerals Council of South Africa.

Sector councils were established to measure and drive transformation in accordance with their respective gazetted sector codes. In my interactions with the various sector councils, I made a number of observations that are worth noting.

I noted that the sector councils that had strong representation from the top companies from the industry tended to be financially stable, professionally managed by a full-time executive team, quite open to third party engagements and generally kept up to date with annually reporting on the state of transformation in their industries.

The sector councils which consisted mostly of government representatives were generally unstable financially, had a poor record of BEE scorecard submissions from the industry, and were initially quite closed to third party engagements. This led to major frustrations for the public servants tasked with running these councils on a day-to-day basis. Some council terms had already expired for months and at times, years, awaiting the relevant Minister to sign-off on new sector council members.

We did not meet with the integrated transport sector council because it has been operating on B-BBEE codes of good practice that haven’t been revised since 2013 and its charter council was, according to an insider, after two extensions, labelled ineffective and phased out in 2017 by ministerial decree. Although the process of establishing a new council began immediately, progress was repeatedly stalled because of changing perceptions and priorities.

In the mining sector, legal wrangles have seen provisions of the latest Mining Charter set aside, so companies are reporting according to the 2010 charter which is designed to suit the industry’s conditions. But JSE-listed mining companies and those that supply the likes of Eskom need DTIC-approved scorecards, so they have to score according to the generic code, which caters for sectors that do not have their own code.

The B-BBEE Commission’s stance is that there is no mining sector code that has been approved and gazetted in terms of section 9 of the B-BBEE Act, and therefore by inference there is no official sector council.

With the recent appointment of the new Presidential B-BBEE Advisory Council I sincerely hope that the issue of capacitating and funding sector councils will be addressed. We chose this policy of B-BBEE, and we set up the various structures to ensure it is implemented. We are failing ourselves if we do not give the sector councils the support they need.