WHILE South Africa’s Broad Based Black Economic Empowerment (BBBEE) requirements are viewed by some as yet another impediment to conducting business as usual, others see them as an opportunity to make positive changes for themselves, their employees and the country.
Roxanne Da Mata Goncalves, Director of Strata-G Labour Solutions, which assists companies in improving their BBBEE scorecards, believes South Africa needs to think differently about BBBEE and transformation.
“Many organisations are disenchanted with consultants who propose questionable BBBEE schemes. Their number one objective is to be profitable and they are tired of bleeding money into initiatives that are not sustainable or that they have no way of measuring.”
This is particularly true when it comes to enterprise development and supplier development. “Depending on their turnover category, companies are obliged to contribute a percentage of their net profit after tax (NPAT) to organisations that are 51% (or more) black-owned small or medium micro-enterprises. This contribution can be in the form of money, time, attendance or materials – or a combination of these.
“Unscrupulous consultants will get their clients to hand over 1% of their NPAT to donate to a relevant SME, with the promise that the SME will deliver a service in return. The service never materialises, but the BBBEE scorecard arrives in the mailbox – with the tacit understanding that no one is any the wiser and no questions are asked,” said Da Mata Goncalves.
When Strata-G entered the market, the labour solutions company quickly became aware of how widespread BBBEE fronting was. “In one meeting after another with prospective clients, the response was invariably: ‘I’ve heard this all before. All you want is our money. We’ll never see what you do with it. We want to make a genuine, tangible contribution’,” she added.
Understanding that many organisations buy into the BBBEE ethos and want to be actively involved in the process, Strata-G develops relevant and sustainable strategies that are mutually beneficial to all parties involved.
“By adopting this approach, we eliminate the distrust and resentment inherent in having to pay over a large sum of money without any feedback, significant change or improvement to the donor company.
“Importantly, we encourage our clients to donate time, material, attendance or services rather than make monetary contributions. This allows them to get more involved in the process and it becomes a mutually beneficial relationship.”
She cited business furniture solutions company, Cecil Nurse, as an example. “Cecil Nurse was required to spend 1% of NPAT on enterprise development and 2% on supplier development. While an enterprise can be any black-owned micro-enterprise that the organisation has an interest in, a supplier must be a black-owned business that supplies services or products to the donor company.”