ICT BEE charter in limbo in South Africa
The ICT steering committee has not yet met to finalise the drafting and adoption of its black economic empowerment (BEE) framework - and no dates for a future meeting have been set.
This meeting was supposed to mark the completion of the four-year, troubled process in the drafting of the ICT Sector Codes of Good Practice on Broad-Based Black Economic Empowerment.
Industry opened consultations on the development of the charter in 2003, resulting in four drafts and three “final” versions during the last few years, which had subsequently seen additional amendments.
Chairman of the steering committee Norman Munzhelele stated in an interview with ITWeb on 20 February that a meeting would be held within a week. He added that following the outcome of the meeting, he would make a decision.
Munzhelele spoke to ITWeb again, stating “he has nothing to report” as a meeting of the steering committee had not been held - and no future dates had been set.
Thabo Mosumboka, director for BEE at the DTI, states the process could go on indefinitely - and that the ICT industry needs to reach consensus on the sector codes soon. “No timeframes have been set by the DTI for this process. It all depends on how soon stakeholders can reach consensus on the sector codes.”
Mosumboka adds that, if the steering committee reports it cannot reach consensus on contentious issues highlighted by the DTI, the department's General Codes of Good Practice will apply to the ICT sector.
This, however, is unlikely to happen due to the mandate of the steering committee and political pressure. Munzhelele stated the steering committee has been mandated to sign off on the sector codes - so consensus has to be reached. Communications minister Ivy Matsepe-Casaburri is also likely to be disappointed if consensus cannot be reached on the sector codes. The minister has communicated her expectations to the committee and the DTI - to no end.
“Last year, we were given assurances by the minister that we would receive the draft sector codes from the steering committee before the end of the first quarter of this year - and obviously this hasn't happened yet. The urgency of this matter is growing - especially for the industry,” Mosumboka states.
While other sectors of the ICT charter are complete, stakeholders have failed to reach agreement on issues surrounding the BEE framework. Munzhelele previously stated the codes were referred back by the DTI over two issues: ownership and social investment clauses.
The last draft of the steering committee recommended the inclusion of a R7.5 billion cap on ownership, which would lower the barrier of entry for BEE companies. Deals with a value of at least R7.5 billion would then be judged to be in compliance with the codes. Munzhelele said the DTI requested an economic rationale for this ownership clause and also instructed the steering committee to iron out issues around proposed social investment programmes.
Mosumboka states the DTI sent back the proposed draft as the proposed sections did not “speak to the principles set out by the DTI”. He adds that it would be a shame if the years of work done on the charter went to waste over “a single matter”.