BEE verification is a new dompas
The way an African company operates is very different to the way European and even American companies work. Europeans are big on data. Almost everything has to be supported by some kind of evidence, often historical. American companies are driven by rules and processes. The result is assumed to be correct for as long as the process that was followed was correct.
The African company is about sales – as long as the till keeps on ringing, all is forgiven. Innately, the African executive is a dealmaker. “Leave it to me, I’ll see what I can do,” is the quintessential South African business line. The rules can be flouted if they are vaguely suspected to be blocking progress.
Several South African executives have been fired from multinationals for doing just that. No crime was committed, no corruption suspected – but they bent the rules. The problem is that most local businesses and government managers are fed US case studies at business school. As a result, the South African business environment is booby-trapped with onerous laws and tedious processes.
Add to that our country’s fascination with policing and punishment. Many legislators, for instance, went to Bantu education schools, where fascism was quietly inculcated. They were probably class monitors – those snitches who wrote down the names of “noisemakers” and submitted the list to the teacher. The teacher would then take out the sjambok and whip the offenders.
Now we have verification agencies that are nothing more than paid-by-the-client monitors. They add no value to a business, but are kept alive by a modern dompas system.
A family business started and owned by a black father-and-son team is regarded as not being BEE compliant because the shares are owned in a trust.
The problem with that trust, says the verification agency, is the beneficiaries are discretionary and there is no female representation.
The father says he wants that trust to remain discretionary because he has grandchildren and lots of nephews and nieces.
If any of them needs money, he wants to have the ability to assist them, and when that person’s situation improves, he wants the right to help the next one. After all, he worked hard for that money. Not according to the new BEE codes. Many white-owned businesses, on the other hand, are level 1 compliant, which means they are the most BEE compliant.
We may well say it now: legislators and black business owners are on a collision course. The new BEE codes have inadvertently denied many black businesses the opportunity to sell their services to government.
In South Africa, we call them “tenderpreneurs”. What a load of rubbish. Governments around the world are often the largest purchasers of goods and services.
The US government is by far the largest purchaser of goods and services in the world, awarding $500 billion in contracts almost exclusively to American companies.
South African legislators must start making it easier for black companies to sell to government. They should make rules and processes less onerous. The rising and dangerous trend to demand data for everything must also be considered for what it is.
Data is like a rear-view mirror, it doesn’t tell you what is lurking around the bend.
It is time to allow the narrative of the African corporation to be heard.