Make code re­vi­sions ‘mean­ing­ful’

Businesses should use tran­si­tional pe­riod ex­ten­sion to bet­ter un­der­stand im­pli­ca­tions of new re­quire­ments

Business Day - Business Law and Tax Review - - BUSINESS LAW & TAX REVIEW - OLGA MESHOE

ON May 7 South Africans will go to the polls to ex­er­cise their demo­cratic right to vote and in so do­ing give voice to, as in­di­vid­u­als, the most ef­fec­tive way they have to ex­press their sat­is­fac­tion (or other­wise) with the cur­rent con­di­tions of the coun­try.

Busi­ness has at its dis­posal the frame­work set out in the generic codes of good prac­tice (Govern­ment Gazette 29617 of 2007) (the “old codes”) to make its im­pact on the cur­rent con­di­tions of our econ­omy and so­ci­ety.

Ac­cord­ing to the Depart­ment of Trade and In­dus­try, the ob­jec­tive of broad-based black eco­nomic em­pow­er­ment leg­is­la­tion in­tro­duced for the first time in terms of the Broad-based Black Eco­nomic Em­pow­er­ment Act, 2003 and then fleshed out in terms of the old codes is “an in­te­grated and co­her­ent so­cioe­co­nomic process that di­rectly con­trib­utes to the eco­nomic trans­for­ma­tion of SA and brings about sig­nif­i­cant in­creases in the num­ber of black people that man­age, own and con­trol the coun­try’s econ­omy, as well as sig­nif­i­cant de­creases in eth­nic in­equal­i­ties”.

Twenty years into our democ­racy and five years fol­low­ing the im­ple­men­ta­tion of the old codes, the hope for a bet­ter SA has not be­come a re­al­ity for many cit­i­zens.

The re­vised generic codes of good prac­tice (Govern­ment Gazette 36928 of 2013) (the “re­vised codes”) which were pro­mul­gated on Oc­to­ber 11 2013 pro­vided for a tran­si­tional pe­riod of 12 months dur­ing which en­ti­ties are to fa­mil­iarise them­selves with and un­der­stand the pro­vi­sions of the re­vised codes.

En­ti­ties are also to be­gin to im­ple- ment the sub­stan­tial changes from the old codes that the re­vised codes re­quire with re­gards to the man­ner and in re­spect of whom the pri­vate sec­tor con­trib­utes to trans­for­ma­tion.

On March 18 Trade and In­dus­try Min­is­ter Rob Davies ex­tended the tran­si­tional pe­riod from Oc­to­ber 11 2014 to April 30 2015 in terms of govern­ment gazette 37453.

En­ti­ties have thus been granted a fur­ther six months within which to ab­sorb the step-changes re­quired in or­der to com­ply with the re­vised codes.

The ap­pli­ca­tion of the re­vised codes will thus only be oblig­a­tory where an en­tity be­gins the ver­i­fi­ca­tion process on or af­ter May 1 2015 (en­ti­ties may still choose to be ver­i­fied in terms of the re­vised codes prior to May 1 2015).

While the ex­ten­sion is wel­comed, cau­tion needs to be raised against de­lay­ing the gain­ing of in­sight and

The ap­pli­ca­tion of the Re­vised Codes will thus only be oblig­a­tory where an en­tity be­gins the ver­i­fi­ca­tion process on or af­ter 1 May 2015

un­der­stand­ing of the im­pli­ca­tions of the re­vised codes and in­ves­ti­gat­ing op­por­tu­ni­ties to equip one’s busi­ness to move away from tick-box com­pli­ance (which is easy to suc­cumb to un­der pres­sure) to­wards mean­ing­ful trans­for­ma­tion.

We be­lieve the ex­ten­sion can be best used to pres­sure-test changes in sys­tems and pro­cesses as well as changes in di­a­logue brought on by the re­vised codes so as to cer­tify that they bring about the de­sired re­sults.

As iden­ti­fied in the Na­tional De­vel­op­ment Plan, SA continues to be plagued by (among other things) high un­em­ploy­ment, a poor ed­u­ca­tional sys­tem and spa­tial pat­terns that drive in­equal­ity.

The changes set out in the re­vised codes more ag­gres­sively at­tempt to fo­cus businesses’ ef­forts on en­sur­ing that ac­tual and sus­tain­able eco­nomic em­pow­er­ment oc­curs in the lives of a broader base of black South Africans. The sooner this is ef­fec­tively ad­dressed, the bet­ter for our coun­try.

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