Impumelelo 16th Edition

WWW.IMPUMELELO.NET

BUSINESS & GOVERNMENT 16 TH EDITION

13th Annual

BUSINESS & GOVERNMENT 16 TH EDITION

An exclusive interview with

AUGUST 2016 w w w . t o p w o m e n a w a r d s . c o . z a

Phethiwe Matutu Chief Director in the Department of Science and Technology

©2014 TUMI, INC.

deSigned in AmericA f o r g lo b A l c i t i z e n S

O.R Tambo International Airport D uty Free 011 390 2088 Sandton City Shopping Centre 011 783 4636 V & A Waterfront 021 419 4253

CONTENTS FOREMATTER PAGE Featured clients 5 Editor’s letter

6

20

INTERVIEW WITH PHETHIWE MATUTU

Foreword – BUSA 7 Foreword – Stadium Management SA

9

SECTOR OVERVIEWS Agriculture 50 Manufacturing

60

Infrastructure 74 Business services and finance

88

Construction

96

Property 102 Health ICT

(brought to you by Wildlife Pharmaceuticals)

106

(brought to you by Morvest group) 140

Science and Technology 154 Public Sector

162

Transport

(brought to you by Super Group)

166

Education and skills development

180

154 2

IMPUMELELO

SCIENCE AND TECHNOLOGY SECTOR OVERVIEW

1 6 TH E D I T I O N 2 0 1 5

CONTENTS

10

KEY FEATURES

INTERVIEW WITH ROB DAVIES

Interview with Rob Davies

10

Interview with Jacob Maphutha

14

Interview with Phethiwe Matutu

20

Interview with Fred Robertson

54

Interview with Vivian Reddy

62

Interview with Lynne Brown

76

Interview with Nhlanhla Nene

90

Interview with Aaron Motsoaledi

108

A selection of South Africa's top empowerment leaders

118

Interview with Iqbal Survé

134

Interview with Luvuyo Rani

156

Interview with Thulas Nxesi

164

EDITORIAL

CREDITS TOP MEDIA & COMMUNICATIONS CEO Ralf Fletcher Editorial Director Ryland Fisher

B-BBEE Advisory Council

26

South Africa's most empowered companies

33

Empowerment pioneers

69

Car reviews

178

Future of Empowerment Conference report

195

Oliver Empowerment Awards

204

A - Z Company Listing

225

118

A SELECTION OF SOUTH AFRICA'S TOP EMPOWERMENT LEADERS

Group Editor Fiona Wakelin General Manager Judy Twaambo-Chileshe Head of Brand Transformation Lee-Ann Bruce Business Development Managers Odelia Donie Justin Daniels Malcolm Mato Vanessa Wallace Joanne Prinsloo Brian Qaba Thembelihle Lusu Financial Manager Haley Fletcher Head Office Top Media & Communications (Pty) Ltd T/A Topco Media Bree Street Studio’s, 2nd Floor, 17 New Church Street, Cape Town.

Tel: 086 000 9590 Fax: +27 (0)21 423 7576 Email: info@topco.co.za Website: www.topco.co.za

TOPCO STUDIO Production Director Van Fletcher Editorial Assistant Jocelyn Stiebel Creative Director Emil Lime Designer Kamiela Abrahams Traffic Manager Candice Land artwork@topco.co.za Research Manager Sandra Bock Researchers Majdah Rogers Sufyaan Banderker Kelly Bredeveldt Nazreen Harris Distribution & Subscriptions Ingrid Johnstone ingrid.johnstone@topco.co.za Photographer Marnus Meyer Make-up artist Cindy Horton Printers Paarl Media Images ©shutterstock®

DISCLAIMER

All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior written consent of Top Media & Communications (Pty) Ltd T/A Topco Media Reg. No. 2011/105655/07. While every care has been taken when compiling this publication, the publishers, editor and contributors accept no responsibility for any consequences arising from any errors or emissions.

ISBN: 9780620524063

IMPUMELELO

1 6 TH E D I T I O N 2 0 1 5

3

2414

It pays to support the payment of small business and co-operatives

If you have been battling to get paid for services rendered or goods provided to the Public Sector, don’t despair.

We’re here to help. Contact the Seda Public Sector SMME Payment Assistance Hotline on 0860 766 3729 during the week between 06h00 and 18h00, fax us: 086 680 2113 or email us: smme@eohco.co.za. Provide us with a purchase order number, invoice number, invoice amount and the Department involved and you’ll see that IT PAYS TO PLAY

BY THE BOOK.

TOG ETHER A D VAN C I N G S M AL L ENTERPRISE DEVELOPMENT

Impumelelo 297x210 watertank.indd 1

18/09/2015 15:52

FEATURED CLIENTS | EDITORIAL

F E AT U R E D

CLIENTS

A

G

Afrocentric Health 112 Group Five Argon Assessment Management

13

Audit Risk Management Solutions

222

I

Artisan Development Academy

182

Isilumko Staffing

Artisans Training Institute

224

R 82

Ithala Development Finance Corp

131

Ithuba Valves & Industrial Supplies

86

B

K

Bearing Lynk

87

Kezla Investments 185

BL Williams Construction

73

Kukua Development Corp

Bulichule Training and Consulting

184

193

L Lunthabe Engineering

C

84

City of Tshwane 194

M

Conlog 161

Maadima 92

Corporate Skills Development

Mani Industries 100

Crane Construction Consultants

190 98

Department of Science & Technology

148 20

Desto 188

E Edit Microsystems 177 Ekurhuleni Artisans & Skills Training Centre

186

Evaluations

94

F Forward Air and Sea

142/152

SEDA

52

4

Senter 360

139

SSG Group

200

Stadium Management SA

8/78

Super Group

168

T Tata Africa Holdings

172

TOTAL SA

174

Tourvest Travel

127

Nashua 144

O Open Trade Training Centre

192

Orizoe Services

85

P Petro SA 176

73

Tumi

IFC

U UIF 139 Umso Construction

N

Phatshoane Henney Attorneys

Sea Harvest Corporation

Tshwane Air

MTN 146

D Dentsu Aegis Network

Morvest Group

203

S 32

Aurecon 19

Britehouse 160

Red Edge

202

V Vending Solutions

101

Vukile Property Fund

104

W Wildlife Pharmaceuticals

114

Woodford Car Hire

IBC

Work Dynamics

192

123

Poynting Direct 150 73

IMPUMELELO

1 6 TH E D I T I O N 2 0 1 5

5

EDITORIAL | EDITOR’S LETTER

EMPOWERMENT FOR ALL It is amazing that more than 20 years into our democracy there are still companies resisting transformation and empowerment.

Fortunately, they appear to be in the minority.

Transformation and empowerment are part of South Africa’s reality and are necessary if we want to address the legacy left for us by apartheid and colonialism.

It should be supported because it is a way of broadening the economic base of South Africa which will ultimately benefit us all, including businesses that used to be white-owned.

When we became a democracy in 1994 – and many of us voted for the first time – there was an expectation among the majority that lives were going to change for the better. But the expectation was not that this should happen overnight.

Over the past 20 or so years, government has made many attempts to address the economic disparities in South Africa, including employment equity and black economic empowerment legislation.

There have been many mistakes along the way, but government has always been quick to realise these mistakes and to make amends.

The new B-BBEE Codes are part of the government’s latest attempts to make sure that transformation of our economy happens in a meaningful way. It draws on lessons learnt over the past 20 years.

In Impumelelo, we celebrate empowerment and transformation. In this edition, we look at the implications of the new Codes. But we also celebrate the achievements of black business people who have overcome tough economic realities to succeed. We hope that others will also be able to learn the same lessons business people have learnt over the past two decades.

We celebrate the winners of the Oliver Empowerment Awards and we reflect on our first, and hugely successful, Future of Empowerment Summit.

Enjoy the read and continue to support our country’s economic transformation in which all South Africans will be empowered.

Ryland Fisher

Editorial Director

6

IMPUMELELO

1 6 TH E D I T I O N 2 0 1 5

FOREWORD

KEEPING THE TRANSFORMATION IMPERATIVE ALIVE The year 1994 saw South Africans exercise their right to vote, many for the first time. Free and fair elections heralded the birth of the rainbow nation – a nation with a solid constitution and bill of rights, a democratically elected president and parliament. Yet economic empowerment still eludes a large part of the population.

South Africa's disciplined fiscal framework is aimed at promoting domestic competitiveness, growth and employment. Key economic reforms have given rise to a high level of macro economic stability. However, despite its bright prospects South Africa still faces the key challenges of poverty, unemployment and inequality.

Two key economic frameworks aim to address these challenges. They are the New Growth Path – which aims to create a more developed and equitable economy through the creation of 5 million jobs and the Industrial Policy Action Plan which promotes broader participation by historically disadvantaged groups in the mainstream of the industrial economy. This will entail large-scale investment by the state in infrastructure, small business and skills development.

Black economic empowerment is a key policy instrument aimed at broadening the economic base of the country thereby driving transformation and stimulating economic growth through job creation.

Impumelelo celebrates the leaders of transformation who are critical building blocks in realising the objectives of the National Development Plan – the blue print that will see South Africa achieve its vision of a better life for all. A South Africa where every child that is born has the opportunity to become a future president, a future CEO or a future entrepreneur.

Congratulations to organisations that keep the transformation imperative alive.

May you grow from strength to strength.

KHANYISILE THANDIWE K W E YA M A CHIEF EXECUTIVE OFFICER BUSINESS UNITY SA (BUSA) Khanyisile Thandiwe Kweyama Chief Executive Officer

Business Unity SA (BUSA) Member of the National Planning Commission

IMPUMELELO

1 6 TH E D I T I O N 2 0 1 5

7

FOREWORD

CELEBRATING OUTSTANDING ACHIEVEMENTS It gives me great pleasure to write this Foreword for Impumelelo – the publication at the forefront of transformation in South Africa – on behalf of Stadium Management South Africa.

Stadium Management South Africa (SMSA) manages four multimillion rand venues in Johannesburg in the form of FNB, Orlando, Dobsonville and Rand Stadiums.

Like Impumelelo, these stadiums have a long and proud history of celebrating outstanding achievements – people who have struggled against what seemed like insurmountable odds – and been victorious.

The FNB Stadium held the first rally to celebrate Nelson Mandela's release from prison in 1990, which drew over 100 000 people – and was the main venue for the 2010 Fifa World Cup, hosting the opening and closing ceremonies. In December 2013 the three stadiums, FNB, Orlando and Dobsonville in Soweto carried capacity crowds for Madiba’s memorial service.

Orlando Stadium, which has hosted many of Soweto's famous derbies between Orlando Pirates and Kaizer Chiefs, celebrated its fiftieth anniversary in 2009, the same year in which Rand Stadium hosted the Nedbank Cup final between Moroka Swallows and Pretoria University – and the year we celebrated our appointment by the City of Johannesburg to manage these venues.

SMSA is committed to stimulating enterprise opportunities for the local community and we strive to continuously provide world-class services and professionalism.

We are looking forward to what 2016 holds – and are proud to be associated with this leading empowerment publication.

JACQUES GROBBELAAR CHIEF EXECUTIVE OFFICER

S TA D I U M M A N A G E M E N T S O U T H A F R I C A

IMPUMELELO

1 6 TH E D I T I O N 2 0 1 5

9

THE NEED FOR TRANSFORMATION IN THE SOUTH AFRICAN ECONOMY A N I N T E RV I E W W I T H T R A D E A N D I N D U S T RY M I N I S T E R , R O B D AV I E S B Y RY L A N D F I S H E R

10

IMPUMELELO

1 6 TH E D I T I O N 2 0 1 5

ROB DAVIES | INTERVIEW

Rob Davies is South Africa’s Minister of Trade and Industry and was appointed in 2009. He previously served as Deputy Minister of Trade and Industry and was Chairman of the Parliamentary Portfolio Committee on Finance.

Black Economic Empowerment has been a key weapon in the

“Fronting is a form of fraud. Why attempt to do this? Either

government’s arsenal as it tries to transform our society, not

because you want to tell government that you’ve got a level

only politically and socially, but also economically.

of empowerment that you don’t have so that you can gain benefits that are available to empowered companies; or you

The Department of Trade and Industry (dti), under the

are trying to pretend to the market that you’re something that

leadership of Minister Rob Davies, has been at the forefront of

you are not.

this battle, mainly because the Department and its agencies have been, in most cases, the first port of call for companies

“We have now introduced a commissioner who will receive all

– both local and international – wanting to do business in

fronting complaints. The commissioner will receive complaints

South Africa.

and in some cases may be able to find a solution; in the worst cases, there will be prosecutions under the statutory definition.

But BEE has not been without its problems – from fronting,

That is the one part of it, but that’s not really the only focus.

to companies finding loopholes in the legislation. This forced

You have been able to earn points for supplier development

government to review the BEE Act and establish a new set of

and skills development but we found that in practice this has

Codes which were set to be implemented from the beginning

not really worked.

of May 2015.

“International companies have been seeking what are called In an interview at his Pretoria office, in the dti’s Sunnyside

equity equivalents. These companies say they don’t do share

offices, we asked the Minister to tell us about some of the

deals because their shares are internationally traded.

problems that government has encounted with BEE over the years and how these will be addressed in the new Codes.

“Yet the real empowerment of small businesses in manufacturing doesn’t come only because you get a

“I think previously BEE had been spread across the economy

government contract or when you deal with an importer and

without any real link to the issues we’re talking about – which is

then come and tell us to acknowledge you because you’re

changing the growth path and empowering people to play a role

empowered.

in that.

“Typically, much of what’s been called BEE has been a share deal of some sort or another where a consortium or individual gets a minority role in a business. Sometimes you find there has been the crude outright fronting of a subordinate in a company as CEO, or a prority position.

“The more sophisticated forms are when people sign a deal, thinking they are going to play a role in the management of the company and they’re actually confined to PR and other minor functions. In the amendments to the Law, to the Act and also to the Codes which are due to come into effect on the first of May this year, we’ve decided to strengthen BEE in the

“BIG COMPANIES DON’T WANT TO GET INVOLVED OUTSIDE OF THEIR CORE BUSINESS SO THEY DEVELOP A NETWORK OF SUPPLIERS AND THEY ACTUALLY WORK AND EMPOWER THOSE PEOPLE.”

direction of supporting stronger empowerment of people in the real economy.

IMPUMELELO

1 6 TH E D I T I O N 2 0 1 5

11

INTERVIEW | ROB DAVIES

“It comes because there’s a symbiotic relationship between big and

He said that transformation should not only be about numbers. It

small companies. Big companies don’t want to get involved outside

should involve a change in mind-set.

of their core business so they develop a network of suppliers and they actually work and empower those people. We want to

“We need to reach a point where race and gender will not be

encourage more of that and skills development is critical.

the first consideration when people employ you or decide to do business with you. That’s where we need to get to. We had

“What we are saying is that in those two areas, you are going to

the BEE summit two years ago and the President said that the

have to score a minimum of 40 percent of the target; but this is

eventual destination is one where we don’t bother about who is

not to let you off ownership. If you don’t score that you’ll go down

who, and where they come from. However we’ve come from a

a place. You’ll draw up your score and then you’re at level four;

past and that has to be factored in.

but you if didn’t score the minimum then you go down to level five. This is what will come in (with the new Codes). It will be an

“We want to try and move away from racial and gender definition.

incentive to score in those areas where you make a difference.

I don’t know how many times I’ve heard people say that whilst a black person makes an appointment, the actual person who

“There will also be a special programme on black industrialists so

knows the answers is not black. That means that people are

we want to have a special focus there.

not being brought into the business and being empowered.

They don’t learn the technology but are there rather as a human

“We’re trying to work on the calibration of that. It needs to create

resource and government relations person.”

many more opportunities for black people to be players in the productive economy. If you get involved in a big company in the

Asked whether he had any targets in sight, Davies said that one

productive economy then you mustn’t just be a PR executive, you

of the targets is to develop 100 black industrialists.

should be involved in the main business.

“It is not a very big target but at least we can showcase a few “If you are a small business, your horizon shouldn’t just be just to get a contract from government; you need to ask questions about the relationship between yourself and other companies.

people as serious industrialists in the economy.”

IS BEE STILL A FACTOR FOR INTERNATIONAL COMPANIES? IS IT STILL A CONCERN FOR THEM?

“We want an increase in small BEE companies that do not simply define themselves as being involved in the area of supply

“Some of the multinationals noticed that we changed the rules.

chain or procurement which just look for any old contract from

We’ve changed them on the basis of an assessment that was

government and then go and take the business to the real

done. Our view is that we haven’t set the level of ambition so high

company that does the work – and then the BEE company takes

that no one can qualify. We also gave a long timeframe

a cut. We want people to get involved and learn the particular

– I think it was 18 months; they had until May before the new

business from whom they are going to seek a contract.

Codes came into force. When we explain to people what the objective is, nobody can say that it is not right.

“That’s what we’ve been trying to do and I’m sure we will monitor the progress. I’m sure that there will still continue to be

“If you want one of our incentives you will need to reach a

challenges but nobody has been able to say we are going in the

particular level within a particular timeframe.”

wrong direction.

“We get lots of complaints about how difficult the new codes will be, but my answer to that is if we were just going to make you tick the boxes differently and come up with the same thing, then there’s no point. It must be something that encourages those sorts of changes in behaviour.”

Davies said that those companies who complained about their ratings possibly changing under the new codes would now have an opportunity to improve them.

12

IMPUMELELO

1 6 TH E D I T I O N 2 0 1 5

“WE WANT TO TRY AND MOVE AWAY FROM RACIAL AND GENDER DEFINITION.”

THE ABC OF THE B-BBEE CODES A N I N T E RV I E W W I T H J A C O B M A P H U T H A B Y RY L A N D F I S H E R

14

IMPUMELELO

1 6 TH E D I T I O N 2 0 1 5

JACOB MAPHUTHA | INTERVIEW

The Department of Trade and Industry (dti) is tasked with driving the government’s agenda on Black Economic Empowerment and the transformation of the economy. In the engine room at the dti’s campus in Sunnyside, Pretoria, is a small team. One of the key members of that team is Jacob Maphutha, Director of BEE Partnerships. In an interview in the middle of March 2015, we sought answers to some questions many people have about BEE and the proposed new codes, which were supposed to come into effect in May.

We wanted to find out whether we were on track with the

merely being compliant. What we have seen is that people

implementation of the codes, the implications of the codes for

are usually obsessed with compliance. They want to see

business and some of the issues that will be dealt with by the

how they can do the bare minimum to achieve the highest

codes.

score. That should not be the obsession. The B-BBEE score

WHY WAS THERE A NEED FOR NEW B-BBEE CODES? COULDN’T WE JUST HAVE IMPLEMENTED THE OLD CODES BETTER?

is important, but it should be the end result of doing things right, of making sure that as a company, as an individual, we implement the codes in accordance with the spirit of transformation.

Jacob Maphutha: That’s a good question. We believe five

We found that the problem is that once people are obsessed

years were enough for us to be able to establish that there

with labels they go and identify loopholes. Like any other

needed to be a change in terms of how we implement the

policy, you can never have 100% compliance. People tended

codes and the makeup of the codes.

to go to the codes and say ‘where are the areas where I can do the bare minimum and get the higher levels’.

The decision that we made as dti, together with the B-BBEE Advisory Council, was to say that if we continue with the old codes, we are not going to expect any kind of radical change.

WHAT ARE SOME OF THE MOST PERTINENT POINTS

Rather than just continuing with the codes as they were, we

BUSINESS? HOW WILL THEY ACHIEVE THAT MIND-SET

needed to look at some of the loopholes that had resulted in their not achieving what we intended. If you look at the new

OF THE NEW CODES AND HOW WILL THEY IMPACT ON THAT YOU’RE TALKING ABOUT?

codes you’ll find that most of the targets are still more or less

Jacob Maphutha: It takes time to change mind sets, but we

the same.

are trying to lead people in the right direction by pointing out that there are certain areas that are priorities for us and, as

This means that we are happy with the targets, but in terms

corporate South Africa, we expect that they would implement

of the touch and feel of transformation, we were just not

them sufficiently and appropriately. For example, the issue of

achieving anything.

skills development is important. Even the NDP acknowledged

WHAT ARE SOME OF THE MAJOR LESSONS THAT

GOVERNMENT HAS LEARNT WITH RELATION TO B-BBEE THAT IT’S HOPING TO ADDRESS THROUGH THE NEW

CODES. WHAT COULD HAVE BEEN DONE DIFFERENTLY IN THE PAST?

Jacob Maphutha: What we, as government, would like to see is a mind-set that talks to doing the right thing as opposed to

that if you don’t capacitate the country, if you don’t build skills among the people in the country, you are not going to achieve the intended growth.

Skills development is one of the priority elements that should be compulsory for all entities to implement and to equip their workers or their employees; we have broadened it even further by allowing companies to also skill people that are not necessarily their employees.

IMPUMELELO

1 6 TH E D I T I O N 2 0 1 5

15

The old codes did not allow for that. You could do it but you were

minister will be appointing a B-BBEE commission very soon

not going to score points. If you employ graduates and students

and the commission’s role will be to be a watchdog in terms of

and give them the experience they need to get employed you will

implementation.

get the points.

We will have a commissioner, deputy commissioner and other That is just one example. The key issue concerns supplier

members and they will deal with fronting. As you know now, the

development. It is, in my view, our industrial policy as the dti. In the

new Act criminalises fronting.

new codes we say that companies should focus on developing their own suppliers, black suppliers in particular, especially those that are still emerging.

The commission will play a critical role in terms of administering issues around fronting and also monitoring a proper impact

Gone are the days of doing enterprise development for the sake of

assessment. The B-BBEE unit here will still remain focussed on

compliance. We have heard stories of companies who have been

policy and decision making, but in terms of implementation the

dumping money on black companies and then calling that supplier,

commission will be monitoring and providing relevant information

or, enterprise development. That’s not what we want. We want to

that will inform the minister, the B-BBEE unit and council with

encourage the integration of small black companies into the supply

regard to whether we are making progress or not.

chains of the large established companies.

YOU TALKED ABOUT THE NDP. THE MAIN FOCUS OF THE NDP IS REDUCING INEQUALITY AND POVERTY IN SOUTH AFRICA. DO YOU THINK THE NEW CODES WILL ASSIST WITH THIS?

YOU’VE SAID THAT FRONTING IS GOING TO BE CRIMINALISED IN THE NEW CODES?

Jacob Maphutha: It’s already criminalised in the memo for the Act which is the primary legislation that went through the

Jacob Maphutha: Yes. The other issue is to make it broader, in terms of having as many people benefitting from B-BBEE. We have to broaden skills development so that there’s no limit to who companies train. We have strengthened the area around procurement and enterprise development. In terms of the ownership element, we have made provision for companies to identify shareholders – not the traditional ones, but communities,

parliamentary process. The codes are secondary to the Act. They don’t have to go to parliament. The minister is empowered to issue them into gazette.

WHAT KIND OF PENALTIES ARE THERE FOR PEOPLE

WHO ARE FRONTING OR FOR PEOPLE WHO ARE NONCOMPLIANT?

youth, women and people who are disabled. This will give

Jacob Maphutha: The Act talks about people being sent to jail

opportunities to people who would not otherwise have had those

for a period of up to ten years. People can be jailed and their

opportunities.

entity’s turnover can be docked up to 10%; this is dependent

WHAT IS THE ROLE OF THE B-BBEE ADVISORY COUNCIL IN RELATION TO ALL OF THIS?

Jacob Maphutha: The B-BBEE Advisory Council is appointed in terms of the B-BBEE Act, which says that there should be a body that advises the president.

on the nature and value that was derived from that particular transaction. If you are a mature person, you can be taken to jail for up to ten years. If it’s an entity, your turnover can be docked.

HOW MUCH EMPHASIS IS THERE ON PROCUREMENT IN THE NEW CODES?

Jacob Maphutha: The entire enterprise and supplier

The president is the chairperson of the Council - and the

development element constitutes about 40% of the B-BBEE

Council’s main role is to serve as an advisory body to the

scorecard.

president and government on the direction which B-BBEE should take. They meet about four times a year to discuss pertinent

You can see the importance of this. With regard to enterprise

issues around B-BBEE and its linkage with other policies, such

and supplier development, the emphasis is now on procurement

as the NDP and other industrial policies. Their main role is an

from companies that are at least 51% black owned. There

advisory one.

are targets for women and for designated groups, youth, unemployed people, disabled people and supplier development.

You’ve then got the B-BBEE Policy Unit which sits within the dti. This is where the policy is refined and implemented. The

16

IMPUMELELO

1 6 TH E D I T I O N 2 0 1 5

JACOB MAPHUTHA | INTERVIEW

This is key because we want to create as many opportunities

disadvantaged – and their role is to ensure that they fund

and sustain them by ensuring not only that there are market

B-BBEE and industrialisation.

opportunities for black enterprises but also that they get the opportunity to be developed by the large established enterprise so that they are integrated into the mainstream economy.

The issue of ownership is something that was exploited, not only by whites but also by blacks in terms of the old B-BBEE Act. WHAT ARE THE MAJOR CHANGES FOR THE SHIFT IN OWNERSHIP IN THE NEW CODES?

Jacob Maphutha: The target is still the same – 25%. We haven’t

OBVIOUSLY UNEMPLOYMENT IS ONE OF THE COUNTRY’S BIGGEST PROBLEMS. DO YOU THINK THAT THE NEW CODES WILL ASSIST WITH JOB CREATION?

Jacob Maphutha: Yes they will. Interestingly, the Commission on Employment Equity has shown that companies don’t necessarily have a problem employing or complying with employment equity at a lower level – junior management and entry level; the problem is in middle management, senior management and top management. For some reason, you

changed the target as it is; the key change was to ensure that the

find there’s a concentration of black people around junior

ownership scorecard is more broad based. It is not narrow in terms

management level.

of only encouraging one or two people to benefit.

Of course we do need entrepreneurs and those are the drivers of growth, we have to accept that but also we’ve made a provision

WHY ARE PEOPLE NOT MOVING UP TO MIDDLE

MANAGEMENT AND SENIOR MANAGEMENT WHERE DECISIONS ARE MADE?

to have the broad business of the B-BBEE incorporated into that ownership element. We have also ensured the issue around

The new scorecard puts greater emphasis on middle

investing because one of the things that we see is black people

management, senior and top management. We have introduced

are shareholders on paper but whatever profits they make go

what we call absorption; in other words, if you skill and absorb

to the funders – whether it’s banks or the companies themselves.

people that were not employed before, points accumulate. This should encourage companies to train not for the sake of training,

We have also ensured that there is net equity, to ensure that

but to ensure that at the end of it people are being absorbed.

black people who take shares in companies are not forever

This should also contribute towards addressing the issue around

indebted even though you are a shareholder. What we have

unemployment.

seen is that the company is benefitting; but when you dissect what value has been created in my hand, you find that there’s nothing that has been created in your hands as a black. We have tried to ensure that when people take loans to buy shares, they

HOW MUCH EMPHASIS IS THERE ON LOCALISATION AS

OPPOSED TO BLACK ECONOMIC EMPOWERMENT IN THE NEW CODES?

are not forever indebted and there’s no vesting of their shares.

HOW WILL YOU ADDRESS THE ISSUE OF FINANCE –

BECAUSE WE ALL KNOW THAT ACCESS TO FINANCE IS

A MAJOR IMPEDIMENT FOR MANY PEOPLE WHO GO INTO BUSINESS? FOR INSTANCE, WILL YOU BE ABLE TO PUT

PRESSURE ON BANKS TO BECOME MORE RECEPTIVE TO SMALL BUSINESS, TO BLACK BUSINESS?

Jacob Maphutha: Yes. In fact, the Financial Services Charter is

Jacob Maphutha: We have tried to link the two. Because one of the things that we saw emerging was the issue around what you might call black import fronting when a black person goes to China to buy goods and resells them without adding any value to that product. Some black companies do this because they think they can easily score points and make money; however that’s not how B-BBEE should be implemented.

being aligned and reviewed. One of the things that is going to be

In the new codes, companies – whether they are black or white

addressed is the issue around access to funding - or access to

– are not allowed to import in this manner. If the product has

finance for SMEs.

been designated by government for local production you will lose points if you decide to import.

We expect that the financial houses will ensure that there is sufficient funding for B-BBEE. However, we have institutions

B-BBEE should help us in creating competence among black

such as the IDC (Industrial Development Corporation) and

people. They should be able to own factories; they should be

the National Empowerment Fund, which serve the previously

able to add further value in South Africa if they import.

IMPUMELELO

1 6 TH E D I T I O N 2 0 1 5

17

INTERVIEW | JACOB MAPHUTHA

We have also introduced a gatekeeper to ensure that 25% of your cost of sale should be coming from non-imports.

Some might say that 25% is too low but this is a start and it is something that we can always upscale. These are some of the things that we’ve done to ensure that we encourage not only

“ WE HAVE AL SO ENSURED THE ISSUE AROUND INVESTING BECAUSE ONE OF THE THINGS

white companies, but black companies to localise, too.

THAT WE SEE IS BL ACK PEOPLE

DO YOU BELIEVE THAT THE NEW CODES WILL ASSIST IN

ARE SHAREHOLDERS ON PAPER

MAKING SOUTH AFRICA A MORE COMPETITIVE ECONOMY?

BUT WHATEVER PROFITS THEY

Jacob Maphutha: Yes, they will if they are implemented properly.

MAKE G OES TO THE FUNDERS –

But there is this notion that B-BBEE equals poor quality.

I don’t know where it comes from, but we have never stated that a company should take on someone who is not interested in business, who knows nothing about business – and make them a

WHETHER IT ’S BANKS OR THE COMPANIES THEMSELVES.”

supplier. businesses. This is why a company that has a turnover of under All that B-BBEE is saying is that there are black people who

R10-million is exempted from B-BBEE.

have potential, either as employees or suppliers. They need opportunities which might be closed to them for many reasons

However, B-BBEE should not be seen as just compliance. We

linked to the past, linked to many factors.

want you to promote people with potential and ensure that you build your suppliers. It benefits you as a company.

We are saying that you should give those people the opportunity to be at the level where you, as a company, want them to be, and we don’t believe any company would want to procure a product that they think will not assist them in being competitive.

We encourage companies to implement B-BBEE for competitive

WE OFTEN HEAR PEOPLE QUESTION THE NEED FOR

B-BBEE. DO YOU THINK THAT THERE WILL EVER COME A

TIME IN SOUTH AFRICA WHEN THERE WILL NO LONGER BE A NEED FOR B-BBEE?

reasons. Black companies should be competitive. That is why

Jacob Maphutha: I want to believe so; sometime in the future,

there are certain thresholds. For instance, we expect that as

if we reach a level where the past has been addressed and we

a black company, you should be able to stand on your own

are well integrated as a society. But as long as we have this

above R15-million. At this level, we feel that you don’t need

inequality, B-BBEE will still be necessary.

development. You don’t need assistance. We expect that you should be able to compete in the market with any other company

All we need is diversity in the workplace, with wealth being

whether local or international.

created among black people; and, once that has been done we can look back and ask whether we still need B-BBEE. The

We cannot compromise on quality and B-BBEE is not there to

President recently talked about the 3% black ownership of

degrade any sort of quality and competitiveness.

the JSE as one of the indicators of the transformation of our economy. It shows that we still have a long way to go if we want

Many business people complain about the red tape and

to reach a situation where all of us are satisfied that the playing

bureaucracy that face people wanting to do business in South

field has been levelled. Only then might we ask whether we still

Africa.

need B-BBEE.

HOW CAN YOU ENSURE THAT THE NEW CODES DO NOT ADD TO THAT RED TAPE AND BUREAUCRACY?

Jacob Maphutha: As dti we are against red tape. We used to have a project (when we still had the unit for small business) that dealt with the reduction of red tape, especially for small

18

IMPUMELELO

1 6 TH E D I T I O N 2 0 1 5

SUBSCRIBE

TO 5 OF THE BEST B2B Publications for only R995

WORLD’S500

WORLD’S

ESG

WORLD’S

500

WORLD’S500

WORLD’S

500

WORLD’S

It provides a comprehensive, go-to reference guide for public and private enterprises and individuals to showcase the strides they are making in this field.

The publication is the official publication for COP17, RIO+20 and COP18 in Qatar.

Organisations choose to profile in ESG as part of their communication strategies and to highlight these business critical issues to peers and the broader public.

ESG SOUTH AFRICA ENVIRONMENTAL SOCIAL GOVERNANCE W W W . E S G G R E E N P A G E S . C O . Z A

SOUTH AFRICA

ESG South Africa is the communication space of choice for role players that operate in the fields of environmental sustainability or social and corporate governance.

WORLD’S500

WORLD’S

ESG

WORLD’S

500

ENVIRONMENTAL

Climate change, transparency, responsiveness

SOCIAL

Community, rights, people

SOUTH AFRICA

GOVERNANCE

Accountability, disclosure, responsibility

INSIDE

WATER FOR LIFE | PPP WORKING TOGETHER | AFRICA’S MEGA CITIES DURBAN’S DUBE TRADEPORT | HOW TO DRIVE SUSTAINABILITY KEEPING THE LIGHTS ON | FUTURE OF MOTOR INDUSTRY | JSE SRI LEADERS EVENT PARTNER

SUSTAINABLE BUSINESS THAT CARES FOR THE ENVIRONMENT ISSUE NO.4

ISSUE 4

MEGA CITIES AFRICA conference

Untitled-1 1

&

expo

RSA: R145.00 (INCL. VAT) UK: £10.00 USA: $20.00

WWW.ESGGREENPAGES.CO.ZA

PARTNERS

PUBLISHED BY

topco

2012/11/17 2:52 PM

media

MEGA CITIES AFRICA

A TOPCO MEDIA PUBLICATION

conference

Untitled-1 1

final cover-for approval.indd 1

&

expo 2012/11/17 2:52 PM

2012/11/17 3:02 PM

And receive the following publications: Top Women in Business, Impumelelo – South Africa’s Top Empowered Companies, Top 500, 20 Years of Success, Top Performing Companies.

Email: Ingrid.johnstone@topco.co.za

TO PURCHASE THE FULL PUBLICATION

CONTACT INGRID JOHNSTONE ingrid.johnstone@topco.co.za 086 000 9590

WWW.IMPUMELELO.NET

BUSINESS & GOVERNMENT 16 TH EDITION

13th Annual

BUSINESS & GOVERNMENT 16 TH EDITION

An exclusive interview with

AUGUST 2016 w w w . t o p w o m e n a w a r d s . c o . z a

Phethiwe Matutu Chief Director in the Department of Science and Technology