BEE ver­i­fi­ca­tion is a new dom­pas

Muzi Kuzwayo

CityPress - - Business - Business@ city­press. co. za Kuzwayo is the founder of Ig­ni­tive, an ad­ver­tis­ing agency

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.

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