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Cablegate: Answers to Key Empowerment Questions

This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS SECTION 01 OF 02 PRETORIA 003831

SIPDIS

DEPT FOR AF/EPS DKRZYWDA AND AF/S/TCRAIG
COMMERCE FOR 4510/ITA/IEP/ANESA/OA/JDIEMOND
TREASURY FOR GCHRISTOPULOS, LSTURM, AND AJEWEL
DEPT PASS USTR FOR PCOLEMAN, WJACKSON AND CHAMILTON

SENSITIVE BUT UNCLASSIFIED

E.O. 12958: N/A
TAGS: EINV ETRD EFIN ECIN ECON SF
SUBJECT: ANSWERS TO KEY EMPOWERMENT QUESTIONS

(U) This cable is sensitive but unclassified. Not for
Internet distribution.

1. (SBU) SUMMARY. Several industry charters are non-
compliant with Black Economic Empowerment guidelines,
according to Teddy Daka, one of the original drafters of the
Broad-Based Black Economic Empowerment (BEE) Bill. He also
explained that sector charters would be issued as Codes of
Good Practice, once approved by the Department of Trade and
Industry (DTI), and that scorecards are just one way of
measuring compliance with BEE targets. Daka said that a
list of names for the National BEE Advisory Council is
before President Mbeki and should be approved soon. END
SUMMARY.

2. (U) Teddy Daka, one of the original drafters of the
Broad-Based Black Economic Empowerment (BEE) Bill and a
consultant to the DTI on the creation of
the National BEE Advisory Council, met with several U.S.
multinational firms on August 23 at the American Chamber of
Commerce (AmCham).

---------------------------------------
ARE SOME SECTOR CHARTERS NON-COMPLIANT?
---------------------------------------

3. (SBU) Daka explained that a number of the existing BEE
charters were drafted before the Broad Based BEE
Bill became law and do not take into consideration its
guidance for creating a document that truly transforms a
sector through empowerment. Consequently, some of the early
charters, such as Liquid Fuels, Mining and to a lesser
extent Financial Services, will need to be redrafted. For
instance, Daka pointed out that the Liquid Fuels charter
does not even contain a scorecard, while in the Mining
Charter, many of the scorecard criteria do not have targets
but are simply yes or no questions such as, "Do you have a
human resources development program in place?" According to
Daka, this type of ambiguity in a charter perpetuates an
environment where a concerted, specific industry target is
difficult to achieve. Consequently, the Liquid Fuels
charter will need a scorecard and the Mining Charter
scorecard will need to be adjusted to include targets for
all seven empowerment criteria.

------------------------------------
WHAT ARE THE CODES OF GOOD PRACTICE?
------------------------------------

4. (SBU) Daka said that the private sector charters would
become Codes of Good Practice for their respective
industries. Once drafted and signed by industry
stakeholders, a charter is submitted to its host government
department for approval (e.g., Mining Charter submitted to
Department of Minerals & Energy, ICT Charter submitted to
Department of Communications) and then on to the DTI for
approval and publication in the government gazette as a Code
of Good Practice for that industry. If either the host
department or the DTI do not feel the charter meets the
goals set out in the BEE Act, then they can send it back to
industry for additional work.

5. (SBU) In addition to the charters, the DTI has nearly
completed Codes of Good Practice governing the accreditation
process for companies who will rate and accredit other
businesses. Rating and accrediting companies will measure
the performance of a firm against the BEE targets of its
respective scorecard. DTI Chief Director for Black Economic
Empowerment Philisiwe Buthelezi said that these Codes have
been completed and are awaiting approval from the minister
and the cabinet before they are published.

-----------------------------
WHAT IS A BALANCED SCORECARD?
-----------------------------

6. (SBU) According to Daka, there is no official government
policy on the balanced scorecard. He said the scorecard in
the DTI's Strategy for Black Economic Empowerment document
is a suggestion on how a balanced scorecard might look.
Daka explained that the term "balanced scorecard" is simply
a scorecard that measures performance in seven empowerment
areas and is not by definition a scorecard that allows
overscoring in one area to compensate for underscoring in
another. Daka also said that a scorecard is not required,
but is a suggested tool for measuring a company's
performance against black economic empowerment targets. He
explained that if industries can devise other ways to
measure compliance with BEE targets that they are free to
use them in place of a scorecard.

--------------------------------------------- -
WILL THERE BE A NATIONAL BEE ADVISORY COUNCIL?
--------------------------------------------- -

7. (SBU) The National BEE Advisory Council will advise
government as well as the private sector on black economic
empowerment. According to Daka, a DTI Task Team submitted a
list of names for the Advisory Council to DTI Minister
Mpahlwa nearly three months ago. The list is now before
President Mbeki, who chairs the Advisory Council. Daka said
that Mbeki reportedly was unhappy with some of the names on
the list because it looked like a "who's who of black
bourgeoisie." Daka expects that Mbeki will make some
changes to the list because he wants people on the Council
who have contributed to empowerment rather than those who
have become enriched through BEE. Until the Council becomes
official, nobody is providing this Advisory service. While
DTI officials are the day-to-day functionaries responsible
for communicating black economic empowerment policy to the
public, Daka criticized many at DTI for insufficiently
understanding the policy.

FRAZER

© Scoop Media

 
 
 
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