In a wide-ranging interview with Mining Weekly's Martin Creamer recently, the Chairperson of Gold Fields Mining group, Dr Mamphela Ramphele, said South Africa was destined for greatness. She said the mining industry must take the gap and use this period where we've got a 'supportive Minister, a supportive union, to get our house in order'. She mentioned a few things, including: investing in people, promoting entrepreneurship, mopping up unemployment, and enhancing the infrastructure of the country, "because the more we get people out of shack sites, out of hostels into proper homes, the higher the quality of our infrastructure, then the world will take note".
She added that if the mining industry is seen, given the fact they already have a tripartite arrangement, and a strategic review in which the mining industry has committed to do certain things, to be improving housing, to improve skills, to improve safety, and to invest in new technology - not just to mechanise. She said the industry has got a mining charter in place and it is flexible enough to do some of the things that they have got to do.
"First of all, housing. Starting with mining industry, which in any case is obliged to re-house its workers, if they were to take advantage of that obligation, and retrain some of their workers some of whom are illiterate, and choose those who want to go into bricklaying, those who want to go into carpentry into welding and  so on, and train them by the hundreds and by the thousands". They then become part of the new workforce and by the time they finish, they don't want to go back into mining quarters. "It allows you to restructure your head count, because we need to go towards highly skilled workers with fewer people at the coal face, with more mechanisation, but we can't do that", she said.
When you've got a huge headcount with the majority of those people illiterate, you can't move them any more, she maintained. "But when they are skilled they are mobile". she said.
"Many of them will actually choose to go into entrepreneurship, again in terms of the charter entrepreneurship is one of the things that you get points for promoting".
She added that if we were to encourage small and medium entrepreneurship in this country, this would help mop up unemployment because for every entrepreneur that you have, they can employ eight to ten people and as they can grow - more people.
She also pointed out that poor productivity has to do with the fact that we have unskilled labour, unsafe practices in the mining sector, mines stopping to work with fatalities - all detracting from productivity. But with more training and more skills,  we can shift much of the headcount this can free up money for capital investment to mechanise, and those people will happily become part of your supply chain. She added the three problems of lack of productivity, unemployment and lack of skills could be put together, to create a real prosperous mining industry.
If most employers approached the challenges of turning around the mining and indeed other industries, and regard the opportunities opened up by the Mining Charter and proper application of the BEE policies, it seems many huge problems could be significantly reduced if not overcome. But why are these policies not put into practice in the very mining industry which Dr Ramphele is part of? At Gold Fields, what prevents them from leading the way and implementing the very strategies that she is promoting? Why is there so much criticism of and resistance to BEE in so many places? Are there  any other black business leaders who think like Dr Ramphele does, and if so, are their voices being heard? Which companies are leading the way in finding viable solutions? What are they doing right, and why is it not being emulated across the board? Why is corporate South Africa unable to come up with viable solutions? Is it all because of the legacy of apartheid, and if so, how can this be turned around, and at what cost? Who should lead the way? Who should follow? Is this a shared responsibility of government, labour and business - and what about civil society, where do they fit in? Would the cost be too huge to bear? What about the benefits of such bold initiatives, are we looking at them?
There are hardly any business or trade union leaders that would find fault with what is being suggested here by Mamphela Ramphele, as all or most of the agreements regulating the market in South Africa are arrived at after lengthy negotiations, which give them the force of law. The different charters in various sectors were equally the result of lengthy research, discussions and negotiations. Why is it that after so much spade work they don't seem to work? is there something essentially wrong or missing in the way South Africa does business, or tackles its challenges of develop the economy and overcoming the legacy of apartheid? Is is all because of lack of political will among all the stake holders? What does all this cost  our country in terms of human development, competitive  advantage and creating a climate of self-sufficiency and stability?
 These are the questions we intend to explore in Thuso Links in our endeavour to contribute in the search for solutions in our country.

Are we making progress?

This week I was struck by an article which appeared in Business Report looking at the attention we pay to BEE and the return it has yielded. It made the point that is often repeated that “most companies have focused on the ownership element because it is easier to implement compared with the other elements and because government departments and public sector entities, through the old preferential procurement framework regulations, focused heavily on it”.

The article makes the point that “the media has great power in filtering what we invest our attention capital in by virtue of what they publish”. It goes on to make the point that attention capital is a resource, on which society, businesses, celebrities and politicians depend. The it adds:“what makes attention capital valuable is its scarcity, which is linked to time”.

What is clear is wherever our attention is invested there is energy that is unleashed, which yields a return”. One wonders whether South African business pays attention to such ideas. However, what is evident is the steady 'progress' towards more and more BEE deals being struck.

BBEEE deals announced – in spite of criticism

In spite of enormous opposition to the government's Black Empowerment policies, every week sees more announcements of new deals. The criticism comes even from members and supporters of the ruling party. We will endeavour to keep tabs on the recent and past developments to understand where Black Economic Empowerment (BEE) is going.
Last week AFRICAN Bank Investments (Abil) said that it had created "real" value of the shares it sold to black shareholders under two empowerment schemes launched separately in 2005 and 2008.
According to Abil executive director Tami Sokutu said that the value of the shares had increased more than fivefold since the schemes were formed, reported Business Day.
The combined value of the two empowerment schemes at inception was about R700m.
The first scheme, Eyomhlaba Investment Holdings, was formed in 2005 with a target of 10% ownership of Abil shares by 2010.
This was followed by IHlumisa, which was formed in 2008 following the acquisition by Abil of the Ellerines retail furniture unit.
Abil provides credit to customers to buy from Ellerines units, ensuring effective cross-selling of both financial and furniture products within the group.
Mr Sokutu said the two black economic empowerment (BEE) schemes now had a target of 10% black ownership by 2015.
"In order to give value at the inception of the two BEE schemes, Abil sold 31-million shares to the BEE schemes at a significant discount, thereby giving the investors to the BEE schemes combined value equivalent to approximately R700m," said Mr Sokutu.

There are huge opportunities for banks to get involved in the transformation of South Africa's agricultural sector by providing finance to small-holder farmers and farm workers, and advice to established farmers seeking black economic empowerment (BEE) partners.

This is according to Standard Bank, which foresees an increase in BEE activity in the country's agricultural sector in the medium term as large-scale farmers come under more pressure to comply with transformation requirements.

"[The] government's Agri-BEE policy includes a target that calls for 50% of South Africa's agricultural produce sold by retailers to be procured from previously disadvantaged producers, partly as a means of improving market access for previously disadvantaged producers," Standard Bank's Diale Mokgojwa said in a statement this month.

"Most big farmers produce for the local market, especially large retailers, who are now insisting on their suppliers being more compliant with BEE requirements."

He said Standard Bank was considering financing farm worker equity stakes, especially in the Western Cape province, where "there is a huge appetite" among existing large-scale farmers to have black equity partners.

How much of the JSE do black South Africans own? Is it 8%, the figure claimed by JSE CE Russell Loubser ? Is it 5%, the “optimistic” guess of the Black Management Forum, shared by ratings agency Empowerdex? Or is it 36%, the proportion of shares held by black individuals (as opposed to white South Africans) once direct foreign holdings on the exchange are excluded?

It is an emotive debate without a firm conclusion. For those who stand to benefit from BEE, what has been done so far is not enough. For those who don’t, too much has been done already.

While BEE was initiated with good intentions — the idea was to give black people a stake in every level of the economy — along with it have come deals for the politically well-connected and pay-offs for the ruling party.

Since BEE has increasingly become a system for the redistribution of wealth rather than one to draw black people into productive activity as owners of capital, it is viewed by large portions of society as unfair and a wellspring of corruption. But despite — or because of — the social costs and poor image of BEE, there is a need to return to a serious discussion about its future and where it is going.

April 14 2011
By Ayanda Mdluli

Date: 03 Apr 2011

Pretoria - One of the major shortcomings in the implementation of Black Economic Empowerment (BEE) was the over-emphasis on diversity of ownership and senior management.

This was one of the key issues raised at the Black Economic Empowerment Advisory Council meeting, chaired by President Jacob Zuma a few days ago,  which discussed how to take the agenda of economic transformation forward and to promote inclusive growth.

"The unintended consequence of this over-emphasis is fronting and tender abuse. We are happy that the Council spoke out so strongly against fronting which is one of the major obstacles to the implementation of BBBEE.

"Fronting is an insult to the dignity of the poor and we have to act decisively against it. I am pleased that the Council is so determined to work with us to act against this heinous practice,'' Zuma said.

According to the Presidency, there was special emphasis on the implementation of the New Growth Path and the role of Broad-Based Black Economic Empowerment (BBBEE) in creating jobs at the meeting.

In particular, the meeting stressed that BBBEE was not just about big business deals for a few individuals in society but also had to have a hand in empowering ordinary people.

It is saddening to see for someone like me whose country had to go through all the ideological nonsense of the 20th century that a nation of Zimbabwe’s quality, with its outstandingly high level of education and its penchant for serious hard work, should be guided by ideological obsession rather than commonsense.

Broad-based elements ’seemed elusive’
February 5, 2010

By Mzwandile Jacks

Black economic empowerment (BEE) – a key government policy intended to redress the wrongs of the past that left South Africa’s black majority economically disenfranchised – has failed reported a Johannesburg daily recently.

Association of agencies accused of interpreting BEE codes outside government policies

March 1, 2010 By Mzwandile Jacks

BLACK economic empowerment (BEE) verification industry leaders on Friday slammed the Association of BEE Verification Agencies (Abva), accusing it of indiscriminately setting rules and policies aimed at “protecting its own interests”.