Sector Codes backed by Government

Posted by Transcend
Monday, 11 March 2013  |  Comments

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THE Department of Trade and Industry has argued against scrapping sectoral black economic empowerment charters and codes — as demanded by the Commission of Employment Equity (CEE) and the Black Business Council (BBC) — on the grounds that they are an important instrument to get industries involved in economic transformation.

The two organisations on Friday discounted the value of sectoral charters and codes to transformation during public hearings in Parliament on proposed amendments to the Broad-Based Black Economic Empowerment (BEE) Act. They said the law on broad-based BEE should trump all sectoral charters and codes of good practice to ensure that government objectives would be achieved uniformly across the economy.

Deputy director-general of the department’s broadening participation division Sipho Zikode said that rather than abolishing the sector charters, the government would like them to be the main mechanism for empowerment, "as that is where the stakeholders in a particular sector come together and decide how it is to be done".

"But obviously, the standards and implementation are not equal, which was why we introduced the scorecard as a minimum performance target for empowerment. Sector charters cannot propose empowerment targets below what the codes demand. Some charters are not performing to the required level but the department would not agree to repealing them."

African National Congress MP Sue van der Merwe said the charters were meant to create a social compact to get the social partners to work together to achieve a common vision. If they were not working, another instrument should be found to replace them.

Manufacturing Circle executive director Coenraad Bezuidenhout said a review of the sectoral codes should be considered.

"Sectoral codes lead to complications for companies with activities that span sectors. Investigating a simplification of the … system may therefore be warranted," he said.

Commission of Employment Equity chairman Loyiso Mbabane stressed that implementation of BEE should not be voluntary and left to the discretion of industries, as was the case with sectoral charters and codes. The broad-based BEE law should trump all other empowerment instruments to encourage synergy and alignment of all the role players in the economy.

Black Business Council CEO Xolani Qubeka supported the inclusion of a "trumping clause" in the bill.

"By their very nature the sector codes are reformational and amount to window-dressing, in that they seek to legitimise current untransformed practices by simply providing new ‘BEE’ labels to such practices.

"All the sectors with gazetted sector codes are today no better transformed than the sectors without sector codes ," Mr Qubeka said.

Mr Mbabane said the commission opposed the proposed collapsing of the employment equity element of the scorecards with the management element and urged that all organs of state without exception be obliged to comply with the act.

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