Construction of BEE policies not limited to deal with state
Organised business shouts from the rooftops about how committed they are to SA, its transformation and the eradication of the legacy of a divisive past.
Often this is done for two related but different reasons: first, not to be seen as part of the legion of firms involved in the Gupta drama of state capture, and second, as we’ve seen with KPMG and even with the Voluntary Rebuilding Programme, in response to transgressions of competition laws and the flouting of transformation commitments.
So, it shouldn’t be surprising that KPMG had its Damascene moment and introduced Nhlamulo Dlomu as CE. Black women have traditionally been called in to clean up the mess — in affluent homes after boozy parties, on our streets and, as we are discovering, even in our boardrooms.
Tomes will be written on KPMG, McKinsey and Trillian’s shenanigans, but I would like to focus on another contentious debate that is receiving less attention — transformation policy debates in the construction sector.
At this time in 2016, the government and seven companies in the construction industry that had been fingered for colluding on infrastructure projects in 2010, agreed to a settlement. This involved a contribution of more than R12bn to development projects, commitment to transformation of the sector and to taking all steps to avoid collusion and exposing such activities in future.
However, much like KPMG’s R40m mea culpa, this settlement was just that — a settlement acknowledging fault and a commitment not to do the same in future.
WBHO may need reminding of this, as it might think this is a “policy” binding all players in the industry, even those who weren’t at the 2010 feeding frenzy. The firm’s response to the South African National Road Agency’s (Sanral’s) launch of a draft transformation policy that goes over and above the existing code, offering contracts only to firms with level-two black economic empowerment credentials and those with 51% black ownership, is nothing short of alarmist.
“We take note with concern of Sanral’s draft transformation policy… unfortunately this policy does not take cognisance of the settlement agreement….”
But the question is, should Sanral’s transformation strategy be a carbon copy of the settlement reached by WBHO and others with the government, solely on the basis that Sanral is a state-owned entity?
Second, if this strategy is informed by Sanral’s organisational strategy, Horizon 2030, would it be safe to use the riot act that Economic Development Minister Ebrahim Patel read to the naughty boys as the map for medium-term planning? Surely not.
I caught up with the CEO of Sanral last week, who highlighted some of the complexities WBHO may be unaware of, or wilfully ignoring: “We’ve had interactions with the Construction Charter Council … and we know exactly what the agreed percentages are in terms of ownership. I think it takes us up to about 32%, plus another 4% in the medium term, and we know there is talk of 40% in the VRP [Voluntary Rebuilding Programme].”
WE ARE STILL APOLOGETIC, STILL TALKING 30%, STILL TALKING 40%. WHY CAN’T WE ALL JUST BE BOLD AND TAKE IT TO A LEVEL WE WANT?
Why then the 51%? Largely because the Construction Charter Council makes similar mention of the figure for exempt microenterprises and qualifying small enterprises. “Fifty-one percent is stated very clearly, but when it comes to the large construction sector, we are still apologetic, still talking 30%, still talking 40%, and the question is why can’t we all just be bold and take it to the level that we want?”
One hopes the recognition by WBHO and Sanral that this is a continuing conversation will not only put this matter to bed, but ensure that by 2030, the construction sector is reflective of the society we ought to become.
We shouldn’t have a scenario wherein those who until recently fixed prices in a closed “fashion dictate terms to an entire industry.