Why the BLEEP is B-BBEE so difficult?

In sunny South Africa, there are a few guaranteed ‘conversation starters’: the success or failure of any of the provincial or national sports teams, the state of the economy and business, the shenanigans of politicians, the latest political ‘double-speak’ buzzword (Radical Economic Transformation, White Monopoly Capital)… take your pick.

Depending on the setting and the audience (at the braai after we LOST the rugby match) the bold and the brave can include any topics related to diversity and transformation: Affirmative Action, Employment Equity and of course, B-BBEE or Broad-Based Black Economic Empowerment. In most cases, these topics will spawn a slew of negative comments from the ‘blanc privilégié’ (hint: to make a quasi-derogatory term sound less offensive, translate it to French).

Does this mean that everyone that criticizes B-BBEE is anti-transformation, anti-diversity or even racist? As someone who has been involved with the B-BBEE Codes since 2006, and cut his transformation teeth on the Draft B-BBEE Codes (my therapist says I’m making progress with my PTSD), I don’t think that it is necessarily so. In my humble (and accurate) opinion, the business community and business owners are simply responding to a few of the fundamental flaws in the B-BBEE Codes:

Flaw #1: The B-BBEE Codes are poorly drafted. Anecdotal evidence has it that the set of B-BBEE Codes that was presented to Cabinet for approval in December 2006 was not only voluminous but also complex, with masses of ‘legalese’ (the lingua franca of the legal fraternity). In an effort to make it have more ‘mass appeal’, the Codes were re-worked during December 2006 and January 2007 – not exactly the most productive months of any year. The result: a trimmed-down version was gazetted on 09th February 2007, but one riddled with spelling and grammatical errors, numbering mis-matches (many paragraph references are to sections that were taken out), ambiguously written and thus open to interpretation, as the sections explaining the correct (legal) interpretation were deemed not necessary. This has led to the unenviable position where one can take a ‘grey / interpretive’ area in the B-BBEE Codes, and get three different interpretations from three separate consultants. Their interpretations may or may not align with the interpretation of the Verification Agency that issues the certificate. These interpretive murky waters go directly against what business wants: CERTAINTY. In business, if the rules of engagement are clear, we can strategise and plan, we can prioritise and allocate resources. This is very difficult if there are measurement criteria that are open to interpretation, and also leads to the second flaw…

Flaw #2: The B-BBEE Codes are poorly supported. The ambiguity in the B-BBEE Codes would decrease over time if its architects and custodians showed leadership in clarifying the interpretive grey spaces. In an ideal world (yes, I have a dream…) one could call the infamous Dti (Department of Trade and Industry), SANAS or the BEE Commissioner with an interpretive query, and the telephone would be answered within three rings, with a friendly, willing-to-help, competent and capable EXPERT in the B-BBEE Codes on the other end. One’s query would be resolved within minutes, with a PDF being mailed with the supporting evidence of the correct interpretive stance. Alas, I woke up from my dream and my coffee had gone cold. The reality is that if you are lucky enough to have your call answered, you often know more than the person to whom you are talking. And forget about clarifications: instead, you are referred from pillar to post, with no one willing (or able) to commit to a stance that is defensible for Verification. Oh, and good luck with getting anything in writing. And to further complicate matters…

Flaw #3: The B-BBEE Codes have no legal precedent. The other way the ambiguity in the B-BBEE Codes would decrease over time is if there were legal precedent to guide us. That is the one major advantage that Employment Equity legislation under the Department of Labour has. Even highly complex labour relations matters usually have a labour law case that acts as a precedent, either locally or internationally. How many high-profile B-BBEE court cases have we had to guide us and clarify ambiguities since the BEE Act was gazetted in 2003? Zero, zilch, nada, niks. And so the not-so-merry-go-round revolves again and again…

SO HOW DO WE HANDLE THIS?

Until we have a Black Power-Ranger riding to the rescue on a dark steed brandishing a six-shooter and a light-sabre (with apologies to Louis L’Amour and George Lucas), we have to craft strategies and action plans that can manage these complexities. In my humble (and accurate) opinion, our strategies and project plans have to incorporate at least these three remedies:

Remedy #1: Our B-BBEE initiatives must be strategic. In the current economic climate, most organisations are under pressure to do more with less and to find innovative and creative ways of making budgets stretch further. For an organisation who is under pressure to remain compliant or to maintain a certain level, having to spend the money budgeted for B-BBEE is a certainty. But what other organisational or operational headaches can simultaneously be addressed, if B-BBEE is done right? Attracting and retaining the right talent? Driving down costs by finding cheaper suppliers? Multi-skilling staff so that we can reduce headcount organically over time, or be better positioned to take on new clients?

Remedy #2: Our B-BBEE initiatives must be tactical and pragmatic. While our B-BBEE initiatives should align with the core strategy of the organisation, we should also capitalize on the short-term ‘quick hits’ that the B-BBEE Codes allow. In some scorecard elements, companies sometimes fail to maximise their points simply because they are not aware of what the Codes (and their Verification Agency) will allow. Another huge factor is advance planning: to achieve the maximum points, some initiatives have to start as early in the measurement period as possible. 

Remedy #3: Our B-BBEE initiatives must be integrated and inclusive. The 2007 B-BBEE Codes were, in some respects, rather ‘silo-ed’ with some linkages between scorecard elements. The 2013 Amended B-BBEE Codes are far more fluid, with many more opportunities for ‘cross-pollination’ between scorecard elements and measurement criteria. One example is that there are Skills Development opportunities under SED and ESD, if done right. Increasingly the companies that are getting it right are the ones that empower their key stakeholders with a solid understanding of all the opportunities in ALL the scorecard elements.

Where to from here?

Until the flaws are remedied and there is more certainty around the solid integration of Employment Equity, B-BBEE and the National Development Plan, the organisations that will survive and thrive will be the ones that will take the time and make the effort to learn ‘the rules of the game’. The better that the key stakeholders in the whole organisation understand the ‘rules’, the better they can strategise, plan and implement initiatives that will not only result in points on the B-BBEE scorecard but also drive the business forward. If that organisation is also investing in projects that will have a meaningful, positive impact on our economy and work towards a more inclusive, economically-active society perhaps we can achieve the visions that Nelson Mandela and Desmond Tutu had of the potential of our Rainbow Nation, for all of us and the generations to come.

Need some help?

Thinus Kruger has over a decade of experience in B-BBEE, transformation, diversity and changing mindsets and perceptions. All attendees at his training sessions walk away with new insights, knowledge, strategies and action plans on sustainably implementing B-BBEE in their organisation. Contact him via email on [email protected] to set up a meeting and pick his brain over a cup of good coffee!