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Send  Share  RSS  Twitter  20 Sep 2016

BEE: BBBEE or Bust

 





Recent Gauteng Business News

The South African business sector is facing a tough challenge in meeting the revised, more stringent Broad-Based Black Economic Empowerment (BBBEE) Codes that came into effect last year. Many companies have already felt the impact, recording lower scorecard ratings – an outcome which mires their trade potential with new prospects, as well as existing, trade and business partners. Added to this, the resulting loss of income means that retrenchment or maybe closure become the next challenge.

It’s a double edge sword: the business community – which includes many of South Africa’s larger employers – needs support and tools in order to comply with legislation and retain their competitive edge. This is their only option if they are to remain viable commercial entities and continue their contribution to much needed job creation. On the other hand, there’s no denying their battle to achieve the goal of the codes – worthy though they are in their efforts to create an inclusive working environment, particularly for those from previously disadvantaged communities, and – ultimately – a changed society.

What, precisely, has changed? For a start, the pillars of BBBEE have been revised and consolidated, so that instead of having five pillars, there are now four. The compliance levels for each pillar has also been adjusted; in many cases, becoming more stringent.
The challenge in meeting these new BBBEE goals is especially pressing for medium sized entities, particularly those which are privately owned. Indeed, the issue of ownership is often a formidable one. Past experience has shown that despite good intentions, the codes have benefitted a few self-enriching individuals at the expense of the truly disadvantaged, and have damaged companies instead of assisting them in their endeavours to be eligible to win tenders. The end result? The intended outcomes of the Act – the advancement of economic transformation and enhancing the economic participation of black people in the South African economy – are not met.

An elegant solution is provided by Afrika Tikkun Services, an entity which connects marginalised youth to entry level job opportunities and helps companies of all sizes both demystify the new BBBEE code and gain the maximum points possible.
“We are a link between the youth in South African townships and the corporate world. We act as a facilities company that understands the BBEEE codes and environment and assist businesses improve their scorecard while uplifting the youth,” explains the organisation’s Marc Lubner. “We also have the means to offer them shareholding in a trust with minimal interference. This helps to optimise their rating and ownership while affecting the lives of the many beneficiaries of our programme; rotational learners who come through the Afrika Tikkun centres.

“We don’t believe in a quick fix solution,” Lubner continues. “We believe that individuals from townships require the same support as their counterparts from the leafy suburbs; namely, a holistic education that provides a good moral compass and the necessary healthcare and education to become an active citizen in tomorrow’s economy.”
The annuity stream derived from the trust enables the Afrika Tikkun NPO to deliver and extend its mandate and grow its model. In supporting Afrika Tikkun’s non-profit arm, companies earn up to five socio-economic development (SED) points. Meanwhile, ATI provides the vehicle for cementing black ownership, earning companies another 25 points, and ATS enables companies to contribute 20 points towards skills development and another 40 towards supplier and enterprise development.

It’s a solution that meets the very mandate of the Broad-Based Black Economic Empowerment Amendment Act, addressing the need for job creation, and companies’ requirements for learners, skills development and training and supplier and enterprise development. By partnering with a solutions provider to focus on these areas, companies can focus on their company strategic objectives, grow and become more profitable - and generate more job opportunities.


 
 
 
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