20 February 2013

South Africa: No Sunset Yet for BEE

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A "sunset clause" for Black Economic Empowerment led to a vibrant discussion today in the Portfolio Committee on Trade and Industry with some members feeling it is not yet the right time in South Africa to suggest this.

Chairperson of the Committee Ms Joanmariae Fubbs intervened at one point and informed members that most policies and codes of good practices were likely to be reviewed under the National Development Plan (NDP). In her view Broad-Based Black Economic Empowerment (B-BBEE) was a realistic attempt to address the challenges of South Africa's past.

"We have to realise that we need economic transformation. It is dangerous if we continue to delay this. All codes are likely to be under review in the NDP: the focus will be on how the codes have performed up to now and if there is still a need for them."

The issue of the "sunset clause" arose when the Director-General of the Department of Trade and Industry, Mr. Lionel October, mentioned it during a presentation to the Committee on the Amended B-BBEE Codes of Good Practice. "At some point there will probably have to be a 'sunset clause' for this. We can't go on (with it) forever. Maybe there should be timelines or clear objectives, say, by 2020 or 2025, as we can't go on with this B-BBEE story forever," he said.

Committee member Mr. Bheki Radebe responded that B-BBEE was needed "as long as there are racial disparities in the country that need to be addressed. We must work hard to illuminate the disparities. We want a society that will have equal opportunities for all races. I want to seriously discourage the Department about (considering) a sunset clause."

Committee member Dr Mario Oriani-Ambrosini wanted to know why his children should be disadvantaged today in South Africa compared to, for example, a black colleague who had more money than him. Dr Oriani-Ambrosini has written a letter challenging the constitutionality of B-BBEE legislation.

Ms Fubbs said the Committee was mindful of young white South Africans, and stressed that it was important for South Africa to be inclusive.

Mr October also said white entrepreneurs would not be marginalised by the Codes but until now there had been too little empowerment of black suppliers.

Regarding the constitutionality of such legislation, the Director-General said the legislation was already more than 10 years old. "If something was untoward, someone would have challenged it long ago. We are not introducing new legislation now, we are just perfecting it. We are confident that the legislation is fully constitutional."

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