Gauteng Business News

Send  Share  RSS  Twitter  16 Mar 2010

BEE: BEE Verification Industry in Need Of Regulation


Recent Gauteng Business News

As the infant verification industry grows with demand, it is an area of grave concern that the industry has no official regulator. This lack is a critical issue for an industry that has the mandate from government to issue official BEE Certificates for companies who in turn use these Certificates for obtaining tenders.

Currently There is a huge amount of legal risk that a verification agency incurs when issuing BEE Certificates and therefore it is vital that there is a consistent approach to the application of the Codes and that this is regulated.

The dti is the custodian of the BEE program, but does not play the role of a Regulator to the industry. Neither is it in the proper position to pronounce on legal interpretation of legislation. SANAS accredits the agencies and monitors adherence to the requirements of SANAS R47, the standards for accreditation. Even the recently established BEE Council has not been tasked with the regulation of the industry.

ABVA (the Association of BEE Verification Agencies) is a voluntary membership body for the verification industry. And while ABVA has attempted to regulate the industry by instituting disciplinary actions against members found to act outside of its rules, since it is not an official regulatory body it remains without teeth. A recent example of this was the resignation of a member who had no desire to adhere to the ABVA guidelines that are in place to encourage a consistent set of standards. In other words, if verification agencies do not wish to act within a specified framework, they simply resign their membership with no repercussions. The dti, SANAS, the BEE Council nor ABVA would have any regulation over this agency.

ABVA believes that it is well placed to take on the role of the regulatory body and has applied to the dti to be considered for this function. Plans are also afoot to present this strategy to the BEE Council. It is in the interest of all role players in this industry, as well as stake holders especially the companies being measured, that there is a consistent well understood application of the BEE measurement tools.

This consistency brings credibility and professionalism to the industry and provides a sense of certainty that if a company initiates transformation activities there are clear points that one will achieve, irrespective of which agency is retained to handle the verification.

An unregulated verification industry is a potential hurdle to effective transformation of the South African business landscape, and as such the issue must urgently be addressed.

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