Portfolio Committee on Trade and Industry, 13 May 2025

Estimated read time: 1:20

Summary

The Portfolio Committee on Trade and Industry of South Africa met on May 13, 2025, to discuss critical issues like the implementation of reforms and challenges surrounding the Broad-Based Black Economic Empowerment (B-BBEE) act. The focus was on the need for transformation in the South African economy to address entrenched structural inequalities. Challenges such as non-compliance in the private and public sectors, fronting practices, and insufficient enforcement powers for the B-BBEE Commission were extensively discussed. Calls for legislative reform, re-evaluation of the B-BBEE scorecard, and enhanced collaboration across governmental bodies were prominent, aiming to enforce accountability and drive genuine economic transformation.

Highlights

The committee meeting focused on strategies to tackle structural inequities in the South African economy 🌍
Members suggested an urgent amendment to the B-BBEE Act and stronger enforcement powers for the Commission 🛡️
A proposal for a comprehensive review of the B-BBEE scorecard to truly reflect needed economic changes was discussed 📈
Reports of insufficient compliance and enforcement in B-BBEE practices highlighted underlying systemic issues 🚔
The need for legislative reform and active participation from various governmental sectors was emphasized 🏛️

Key Takeaways

The committee is pushing for bold enforcement reforms of the B-BBEE Act to enhance economic transformation 🚀
There is a call to reevaluate the B-BBEE scorecard to put more emphasis on ownership, management, and control 📊
Members highlighted the need to involve both private and public sectors aggressively in transformation policies 🏢🤝
Concerns were raised about the limited impact of current B-BBEE implementation, calling it narrow and insufficient 📉
The formation of a tribunal similar to the Competition Commission's is suggested to enforce compliance more effectively ⚖️

Overview

In a robust discussion, the Parliament of South Africa's Portfolio Committee on Trade and Industry dissected the B-BBEE Act's effectiveness and how it could be reformed to genuinely transform the economy. The agenda centered around tackling deep-rooted inequalities by enhancing enforcement and compliance mechanisms.

The meeting revealed a significant push for legislative amendments. Members called for implementing reforms that focus heavily on ownership, management, and control, crucial for unlocking economic opportunities for historically disadvantaged South Africans. It's become apparent that these elements must take center stage in any reformed economic strategies.

While the meeting covered many ground points like the appointment of a tribunal-like structure, it emphasized the collaborative need across government departments. There was an agreement that both effective enforcement and empowered institutions could drive impactful change, transforming the economic landscape to reflect a more inclusive South Africa.

Chapters

00:00 - 06:00: Meeting Introduction and Agenda Setting The chapter discusses the initiation of a meeting, focusing on the introduction and agenda setting. Key points include welcoming participants, outlining the meeting's purpose, and establishing expectations for the session. The facilitator emphasizes the importance of staying on topic and time management, while encouraging active participation from all attendees. Additional items include reviewing the previous meeting's minutes, if applicable, and aligning on the objectives to be achieved by the end of the current meeting.
06:00 - 18:00: Roll Call and Apologies The chapter titled "Roll Call and Apologies" begins with a morning greeting to Jacob. It seems to be the start of a meeting or conversation where Jacob has a specific role or interest. The initial dialogue sets a formal tone, indicating a structured setting where roles and responsibilities might be highlighted as part of a larger discussion or agenda.
18:00 - 75:00: Presentation on Transformation and BE Codes The chapter discusses a presentation focused on 'Transformation and BE Codes'. It seems to be about testing the capability of sharing information or files, although the provided text is too incomplete to fully assert the context or details of the presentation.
75:00 - 126:00: Discussion and Member Interventions The chapter titled 'Discussion and Member Interventions' revolves around the theme of engaging discussions and the active participation of members through various interventions. It focuses on how documentation plays a crucial role in enhancing the understanding and effectiveness of interventions. The transcript is brief, emphasizing the immediacy of documentation actions, possibly during a real-time intervention or meeting scenario.
126:00 - 190:00: Response from BE Commission This chapter seems to include a musical introduction, but without additional information in the transcript, no summary can be generated about the actual content from the 'Response from BE Commission'. Details or additional dialogue are required.
190:00 - 216:00: Minutes Approval The chapter 'Minutes Approval' begins with a good morning greeting directed at Jacob. The context or details of Jacob's response or any further discussion are not provided, indicating that the conversation or meeting continues from this opening exchange.
216:00 - 220:00: Conclusion and Closing Remarks The conclusion and closing remarks section consists of a discussion about the presentation sharing process.

Portfolio Committee on Trade and Industry, 13 May 2025 Transcription

00:00 - 00:30
00:30 - 01:00 Um, good morning, Jacob. You you wanted
01:00 - 01:30 to to test if you can share the
01:30 - 02:00 documentation. You can do so now.
02:00 - 02:30 [Music]
02:30 - 03:00 Uh good morning Jacob. Are you okay with
03:00 - 03:30 sharing of the presentation?
03:30 - 04:00 Uh good morning Tulu will share the
04:00 - 04:30 presentation. Tulu from the ministry. Oh
04:30 - 05:00 Tulu will share. All right. Thank you.
05:00 - 05:30 Uh can Jacob stop sharing? uh so uh that
05:30 - 06:00 we can start. Thank you.
06:00 - 06:30 Uh good morning Andre. If you can just
06:30 - 07:00 indicate
07:00 - 07:30 um um if we are correing already. Um
07:30 - 08:00 good morning chair. Chair we do correct.
08:00 - 08:30 Shall I do a roll call? Chair. Uh please
08:30 - 09:00 do.
09:00 - 09:30 Mr. Kaba.
09:30 - 10:00 Yes, I'm present. Thank you. Mr. Chance,
10:00 - 10:30 I'm present. Thank you.
10:30 - 11:00 Mr. GMA,
11:00 - 11:30 I am here. Thank you.
11:30 - 12:00 Mr. Langa,
12:00 - 12:30 present teacher.
12:30 - 13:00 Mr. I'm I'm uh I'm present. Andre,
13:00 - 13:30 thanks.
13:30 - 14:00 Miss Mosikati
14:00 - 14:30 I'm present.
14:30 - 15:00 Those are the names that I have currently chair. Somebody join us while
15:00 - 15:30 I was doing the roll call. Chair. Thank you. No, thank you very much. Um, can we please fly to the agenda? Um, can we get the mover and second for the agenda? Chair. Yes, honorable
15:30 - 16:00 Muskati. Adoption of the agenda. Thank you very much. Second for the agenda. Seconded chair. Thank you very much. The agenda is police conduct. Um there are there any apologies. Andre um chair I've not received any apologies yet chair. Um just to note that the deputy minister has um is on the platform and he is he may leave he he
16:00 - 16:30 will leave the um the platform at around 10:30. Submitted an apology in that regard. Chair. Thanks. Thank you very much. Good morning. My apologies member Ting. I've also just joined. Thank you. Thank you very much member. Much appreciated. The purpose of the meeting today is for the DTIC to brief the committee on the current element of the BE codes of good practice and policy underpinning this. The tripleB commission should also brief uh brief us
16:30 - 17:00 on the implementation of the codes as well as the implementation of various uh sector sector codes in terms of the progress that is that are being made at this level. And secondly, uh we have through our WhatsApp group um uh requested the team to actually for ease of reference to just sequence all the outstanding minutes that we will have to look at at the conclusion of the meeting
17:00 - 17:30 all these minutes as I said recording in progress in the group they they have been shared with us over different times but because we've got a lot of emails so I as the team just to sequence so that we can go through these minutes as we approve Um uh with that let me take this opportunity to welcome the delegation as led by the deputy minister Wilfield. Um we haven't had or seen you over time but we're happy that you are here together with the delegation DG also welcome as as well as
17:30 - 18:00 the DDGs that are here DDG's Susan and commissioner and all other colleagues that are here. Welcome members of the portfolio committee. I hope that we're going to have a fruitful deliberation. In that regard, I will now hand over to the deputy minister and uh in turn he will hand over to the DG and then they present and we we have to be mindful that at least we would would request that the presentation should not exceed
18:00 - 18:30 an hour so that we're able to manage our time. Uh deputy minister over to you. Thank you very much chairperson and good morning to the members of the committee. Uh chairperson just to advise I believe the DG has had to attend to another pressing matter at this moment but we do have the um DDG Susan Mangol on the call as well as the BE commissioner Mr. Cheddis Matona. We have the chief
18:30 - 19:00 director Mr. Jacob Aputa as well as members from the commission uh present on the call. Uh chair, thank you for the kind words and the welcome to the uh the delegation and thank you for the opportunity to present on this topic. I um I do want to apologize just further chair that um unfortunately there is a conflicting appointment in my diary uh otherwise I would have been here for the duration but we have a competent delegation here to deal with any questions. If there are any further
19:00 - 19:30 issues arising that are unresolved, uh, chairperson, please, uh, kindly, um, forward those to the ministry in writing and and we will attend to those. Thank you very much. Um, chairperson, if I can hand over to Miss Mangal. Uh, good morning, chair and honorable members. Uh, my name is Susan Mang. Thank you deputy deputy minister and thank you to the portfolio committee for
19:30 - 20:00 having us this morning. I'm going to ask Tulu to share the presentation. H chairperson and members we are having some sort of power challenges in the campus. So I'm going to be switching off my camera. Firstly like the DM has mentioned I would like to apologize for the DG. I'm accompanied by the commissioner of the tripleB mr Madona and his executives. Then from
20:00 - 20:30 our side the department I've got Mr. Maputa from the BE unit who is also supported by his team as well. We've also invited the National Empowerment Fund the CEO it's online and his executive. So with those introduction chair I'll move straight to the presentation we we we can move to the to the next slide. So we've been asked to come and brief the portfolio committee
20:30 - 21:00 on the tripleB as well as the implementation of various sector codes. So I'm going my first part of the presentation will be the introduction of the be legislation as well as its objectives. Then we also we were asked about the progress with regard to the various tripleB codes. Then we're also going to to give sort of some of the performance of the equity equivalent
21:00 - 21:30 program as well as the yes program. And then from there I'm going to hand over to Commissioner Maduna. The next slide chairperson and members the the tripleB act if actually it's it's coming from the constitution of South Africa that says there's a need to effect redress and equality in the interest of equity is firmly embodied there. So one
21:30 - 22:00 of the key things of the constitution is to actually uh get equality that includes the the full and equal enjoyment of all rights and freedom. So over the years the government of South Africa has had many of the economic policies and that include the vision of the national development plan which is to eliminate poverty and reduce inequality. So the tripleB legislation
22:00 - 22:30 it's also a key instrument that supports the NDP but also that drive transformation in the economy. The next slide. When we look at the journey of the tripleB act, it started in 1998 with the tripleB commission report then with the act that came into effect in 2003 and then it was later amended in 2013. So we do have the code of good practice that were introduced in 2007 but also
22:30 - 23:00 amended in 2013. We have various transformation charters and sector codes. Then in 2016 we have the tripleB regulation. So over and above the years that's how has been implemented which also include various financial support that include the black industrialist policy that was also introduced in 2015. Recently we are working on the transformation fund as that will be a
23:00 - 23:30 key sort of a sub a key instrument that will enable transformation in support of tripleB. The next slide. So in terms of the the mechanism that that we have uh with regard to tripleB uh the the institutional mechanism the minister of the DIC is the one who's actually mandated the mandated to administer the the the act then he's
23:30 - 24:00 supported by the tripleB commission that does monitoring and enforcement then we we have various sector charter council that are implementing the sector codes which also I think for now we have about 11 sector codes that have been gazetted then with other sectors that are still establishing their sector codes. Then we have the tripleB presidential advisory council. We have the the South African National Accreditation System that
24:00 - 24:30 actually regulates the verification of the verification agencies for the tripleB certificates. Next slide. One of the key objective of the tripleB is to actually ensure that we we actually address the high inequalities in our society. A challenge that other countries are facing. I think in other countries what we see we see them talking about indigenization. They talk
24:30 - 25:00 about localization. So in South Africa we talking about the tripleB. It lays the foundation for deeper growth through greater economic inclusion that widen the talent pool of enterprises drawn from black South African women, young young people and people with the disability. The next slide. As we continue in terms of the objective of the tripleB act, it's to
25:00 - 25:30 empower rural and local communities by enabling access to economic activities to promote investment programs that lead to broad-based and meaningful participation in the economy or by black people, but also to increase the extent to which communities, workers, and other collective enterprises access economic activities. So I'm not going to go through them. So these are the objectives that actually are being implemented as part of the tripleB act.
25:30 - 26:00 The next slide. The tripleB act got a dumping clause that actually to ensure that there is alignment and consistency in terms of the application of the of the act so that we don't have like other in other parts of the country that they applied differently. So there is that I think the next step was also to establish the advisory council appointed by the
26:00 - 26:30 presidency and the tripleB commission and then it also the acts also specify requirements for reporting. It introduces the offense penalties and prohibition for parenting. It also make it compulsory to implement triple B by organ of state or public entities in terms of section 10. Then it also give rise to the development of various sector codes. The minister has got the power to issue the sector codes regulation guidelines and practice
26:30 - 27:00 nodes. The next slide. So when we look at the codes and the element uh the tripleB is got five component which are actually key that actually make up that are in the score card. So the balance score card the first element is in ownership the second one is management control the third one skills development the fourth one enterprise and supplier development and
27:00 - 27:30 then the social economic development the total points achieved through measurement of each of the elements determine the measured entities tripleB is recognition status which will then be valid for a year so hence then it becomes an annual sort of exercise to get a valid tripleB certificate. All entities with a revenue of less than 10 million per anam are exempted from tripleB compliance. They can only do an
27:30 - 28:00 aid. But the minute you are above 10 million, that's when you are required to actually use the five elements above to then get your triple B certificate. The next slide chair and members just to look in terms of why this key element of the scorecard the ownership is aimed and increased ownership of the economy by black people including black entrepreneur women youth people with
28:00 - 28:30 disability as well as people in the rural area. The management control is to is to actual to actually make sure that there's a genuine participation in decision making at board executive management and operations of entities as well as the control of asset by black people. Skills development is aimed at empowerment through education and creating of creating and creating opportunity for previously disadvantaged employees as well as youth people with
28:30 - 29:00 dis with disability. But mainly to accelerate the skills development we have learnership in terms of learnership apprentichip and bazar and employment opportunity. And then the enterprise supplier development is to make sure that there's market access procurement of goods and services from South African blackowned enterprises black industrialist SMME while working with them to develop their businesses. Then the Southshore economic development. It
29:00 - 29:30 looks at investment in marginalized communities thereby stimulating the economic growth in rural and township areas. The next slide. So chair I'm going to skip this slide because it then shows how the waiting of the various elements. We can move to the next slide. Uh so now but at earlier on I touched in terms of the equity equivalent program
29:30 - 30:00 that is also part of the tripleB. The equity equivalent investment program was created for multinationals whose global practices or policies preclude them from the from complying with the ownership element of the tripleB through the traditional sale of equity or shares to black South African. Yeah. What I want to also highlight in this slide is that even if they they are actually preluded to one element of the five. So this
30:00 - 30:30 particular uh program only deals with ownership. So the the the multinationals still need to comply with the management with the management control with the skills development as well as also with the with other four elements. So this one deals with only one element which is ownership. Such multinational must provide proof that they have not entered into any ownership partnership arrangement in other countries globally.
30:30 - 31:00 The tripleB policy has made a a provision for the recognition of contributions of such sale of equity. The next slide. Uh so so what we did chair was that we actually wanted to take the committee through how it has been implemented as well as the companies that have actually benefited uh benefited the the benefited through
31:00 - 31:30 the the EIP program. So 2007 the first one was the HP. Then we've also included some of the countries. There are those that have expired and then there are those that are actually continuing with the latest one being the the Microsoft which is their third their third reiteration of EIP and then also the city group which is their first time and then the biggest one being of the seven
31:30 - 32:00 OEMs which that that set up a transformation fund mainly with the focus area of the EIP is skills development and enterprise development. Then in some of them because of that specificity of that particular sector, we then also requested that they encourage localization to make sure that there are certain products that are localized in South Africa. The next
32:00 - 32:30 slide. So the next one is the youth employment initiatives. The yes program was incorporated in the tripleB codes as one of the incentives for companies to address youth unemployment. We are aware that in South Africa we've got a high number of unemployment amongst youth. H so this initiative was created to make sure that we skill youth. We also focus on some of the key skills and new skills but also with the key of reducing
32:30 - 33:00 unemployment. uh I think where since it establishment the the program has created about over 170 thou 170,000 jobs so what we are seeing that in terms of the program is that there's a slow implementation because of I guess some of the because the the original target was to create 1 million jobs for youth so now I guess then the the there the
33:00 - 33:30 the program it's actually very slow. It's not getting to the target and the numbers of unemployment goes up. So, so then what we are currently doing working with the companies, we are actually we are we are we we are actually reviewing the program to be able to to address to make sure that it actually works according to what is intended. The next slide. So in terms of the the the last
33:30 - 34:00 part chair is the is the is the sector codes. So like we've earlier indicated that the sector codes are established to actually are developed to address the transformation within that particular sector with the aim of making sure that the sector generally they work together to be a to actually set targets for themselves. So so in in the development
34:00 - 34:30 of the sector code it actually it is the sector that comes through the sector ministry. So there are three types of pro procedures that are followed as per the tripleB act. The first one is section 12 which is the statement of information. The the second one is section 9 that actually gives that there should be a 60-day commentary period. Then the third one, the third one is also section 91 which then says that the same legal which then talk about the
34:30 - 35:00 same legal status as the generic uh generic codes like I've indicated chair is that the minister of trade industry competition is responsible for the approval and the gazette of the sector codes. So therefore the sector will then work with the sector ministry con consult within the sector and then develop the sector codes and then submit them to minister to be able to gazette
35:00 - 35:30 them for comments as well as gazette them to make sure that they actually after after the commentary period. So I think that's one of the key pro the key processes that is very important that this se these sector codes that are being published they've been submitted via the sector ministries. The next slide so the the the main thing about the sector codes is that they must use the same calculation methodologies to the to
35:30 - 36:00 measure compliance as those in in those used in the codes. they may deviate from targets and I think we've seen that some of them they set high percentage in terms of ownership depending on the economic principles sectoral characteristics and the empirical research that the sector is actually putting across and then I guess then after then they have they also need to to be clear to define the scope of one
36:00 - 36:30 what what they want to actually achieve. The next slide. So, so a part of the request from the PC is that we need to provide the progress with regard to various sector codes. So, the first one is the agribe sector codes that is I think currently the term of the sector charter council have expired. The minister of agriculture is in the process of appointing the sector charter. So we
36:30 - 37:00 haven't received any reports in terms of section 126 of the tripleB. The next one is the construction sector codes. The charter council is effective. The last report that was received was in 2022 2023. Then we have the defense sector codes which does not have a sector charter council because the term expired in 2023. They have not submitted a report. We've got the financial service sector codes. The charter council is
37:00 - 37:30 very effective. They've they've they've submitted their last report in 2022 2023. Then we've got the forestry sector codes. The charter council is effective and operational. They've submitted their last their latest report for 2023 2024. The next slide. So then we have the ICT sector codes. The charter council is effective and operational. So the ICT they I think what they're looking at currently is
37:30 - 38:00 that they they want to review the sector codes which will be a process that they will undertake with the department of telecommunication in partnership with the sector then will be able to get and then engage once they're done with the amendments in terms of consultation. The latest one is the legal sector code that the minister has gazetted last year September. They've got an they've got a charter council which is effective and operational. However, because they are
38:00 - 38:30 still new, they they have not yet submitted the report. Then we have the marketing, advertising and communication. Charter Council is operational. They submitted their latest report. Then we've got the property sector code. Charter Council is effective and operational. The latest report is 2022 2023. We have the tourism sector code. Charter Council fully effective and operational RAS report 2020 2021. The next
38:30 - 39:00 slide. So I think just in brief just to give in terms of the role of the charter council. The role of the charter council is to develop the be sector code in partnership with the sector to monitor implementation. Most of them they set the targets. So therefore for to make sure that those targets are actually met for the sector and impactful transformation is achieved in the sector they need to provide monitoring to that.
39:00 - 39:30 They also provide guidance on specific sector issues affecting implementation of the codes. They compile status reports status report implementing their sector code. They also share information with their stakeholders. They submit progress report to the sector code line ministry as well as to the minister of trade industry and competition with the and then the B commission and the B advisor. The next slide.
39:30 - 40:00 So chair I think one of the request was that we we need to just highlight some of the the challenges why that we are actually encountering when we implement the tripleB one of the key things chair that we've noticed is that is there is a tickbox approach in terms of implementation and I think we've seen that with the many certific be certificates that when we verify or the
40:00 - 40:30 BA commission verify we can't see those impact then there's also a high level of concentration in many sectors creating barriers to entry for SMMES so that then in that way the enterprise supplier development program are not being used sufficiently in those value chain to make sure that there is impactful uh transformation then also one of the key things is the availability of funding and funding models that do not promote
40:30 - 41:00 transformation hence I The committee called us the in the we did indicate that we have we are going to be establishing and implementing the transformation fund which we will be coming later to present to the committee is to also address some of the challenges that we we have actually encountered and then there's also a limited focus on the marginalized areas such as the r the township and rural areas. So chair I think this will be the
41:00 - 41:30 last slide before I hand over to to the commissioner. So I thought maybe let's talk about the interventions but I will also come towards the end so that then we can combine the intervention that will also cover the the the be commission as well as some of the policy the tripleB act. So let me hand over to commissioner Maduna now.
41:30 - 42:00 Thank you. Uh let me uh greet honorable members um and chair um again to request that if it's okay with you uh I will switch off my camera um so that we don't have uh connectivity issues as such um
42:00 - 42:30 So um the the the the part of the presentation that I will do um is really around the monitoring of um implementation of the act. Um if you move to slide 26 please can can I have someone uh help me? I can't find the my video
42:30 - 43:00 anymore. If I could have uh someone close the Thank you. Um the this part of the presentation chair overlaps with uh the the earlier part of the department's uh presentation. I won't spend uh time on it. I just want to highlight that uh the most important legislative
43:00 - 43:30 development was the creation of a commission when the act was amended in 20 2013 um with a function and I just want to quote straight from the legislation for the commission to oversee supervise and promote adherence to the tripleB act. Um and and in that regard um the the commission is required to
43:30 - 44:00 receive and analyze compliance reports of measured entities which are JSE listed companies organs of state and public entities as well as to register uh be transactions that are happening in the market to assess them to vet them uh uh in terms of the extent to which they empower uh black people. And these are
44:00 - 44:30 transactions um of the value 25 million rand and and above. And lastly to to investigate uh complaints. I I mention uh this role of the commission which obviously is an important role uh which need to then be assessed alongside the powers of the commission. And I do want um to to to to move to slide
44:30 - 45:00 29. Uh I'm I am assuming uh chair that members have uh seen and perused the the presentation. So I will not cover um every slide um in this presentation. Uh so the the the the the powers um slide slide no slide. Yeah. just keep it there. Uh because what I want to convey in this slide is that side by side with the role
45:00 - 45:30 and functions of the of the commission is its powers. Um now um the the legislation the the the only enforcement and penalties that uh are contained in the legislation as it stands are in respect of things like fronting uh misrepresentation of uh be status uh providing of false information
45:30 - 46:00 uh to verification a agencies and of cause verification agencies themselves if they misrepresent. Now when the commission has conducted an investigation to a complaint about any of these things um the the act says we we must refer it to law enforcement and that is the South African police service or the national prosecuting author authority. Uh the the
46:00 - 46:30 the penalties can only be enforced through a court process and and and the effect of this is is really to put um if you like consequences uh legal consequences a bit far down because we have to depend on the on on the courts and we have had up to over 50 referrals uh to date uh since we've been doing this investigation. which have
46:30 - 47:00 been referred. None of them has actually served in court uh as it were. I I raised this chair because I think that the legislation is in need of review. Absolutely. And when we do that, it would be to to really find a a balance between the role of the functions of the commission and of course its enforcement powers. um as well as perhaps consider you know uh a tribunal to adjudicate because
47:00 - 47:30 litigation is very expensive and many of uh people who are wronged um you know when uh things go wrong in be transactions do not have the means to enforce their rights and in court. So that you know the the idea of a of a of a tribunal perhaps uh could be something we we we we consider. Um but al also consider u uh administrative sanctions. Um you will see later on when we get to
47:30 - 48:00 data and access to information, access to reports that there are major challenges there. Um and and that kind of complicates our ability to monitor as a country how far we are we are going. If you go to uh you can skip the the next slide because next two slides uh because I think that the department has covered those issues. I want to talk about uh issues of data uh starting with uh
48:00 - 48:30 ownership. Um now uh when we report uh the the number of uh the level of ownership in terms of data and percentages um many people their instinct is that it's it's it's a bit exaggerated. Um I personally also feel feel the same. But when we actually look what is the source of this part of it you know um is the fact that the ownership measure
48:30 - 49:00 contains both direct ownership that is people who acquire shares directly as individuals uh or perhaps even consortia uh direct ownership and then of course indirect ownership um which are your mandated investment private equity funds broad-based ownership schemes um employee share ownerships and trusts and these were introduced in the legislation when we shifted it uh from a narrow focus to
49:00 - 49:30 broad-based um so that a lot more people can have uh opportunity to be part of uh be um and to enter the economy and as vehicles for to to enable people to enter the the economy. Um so they they're both positive um issues there uh but also challenges uh to the extent for example that sometimes is very difficult
49:30 - 50:00 to trace uh beneficiaries um whether they extend beneficiaries actually you know the benefits are crew to them um in the in the in the in the in the in terms of be um so I think it's an area that we also need to to look at uh in in t tightening the legislation go going forward. The next slide is a something of of a of a dashboard. Um and you will see that um
50:00 - 50:30 this covers data that we've been able to collect up to 2022. Um we are um in the process of finalizing the the the the latest uh data analysis um in terms of uh uh be um we should finalize that in in a few weeks um and we can come back I think engage engage on it but the truth is that the
50:30 - 51:00 the pattern of performance doesn't really vary a lot. I think there there's a there's a kind of a a stable trend going forward but the source of data um is actually the BE certificate. So the so the PE certificate was designed as a tool for measuring be for measuring implementation and naturally it is the primary source that we we we we we use
51:00 - 51:30 um in our analysis and and monitoring um um and it is it's it's it's a B certificate by everybody who's implementing BE JSE in the legislation JSE listed companies are specifically mentioned organ of state and public entities and those are the the entities that have an obligation to to uh submit um reports. Now um we do have challenges um
51:30 - 52:00 in that regard. Um so if you look for example um in the top line there sort of um like I think it's uh orange the orange part it it shows you the the level of submissions of of of reports. Uh we started off when the commission opened shop in 2017 with a with a a slightly large number 51% but since then the trend line has
52:00 - 52:30 been declining in terms of uh submissions of report. You will see that the the most certificates that we were able to access in this period was in 2019 when we had uh just under 6,000 uh certific certificates. uh in the last period certificates that we were able to access has declined to uh just under one point 1 1,500 as it were. Now, now of course
52:30 - 53:00 these certificates the elements of the scorecard, ownership, management, control, skills development and so on um are captured in the in the B certificate and then we then uh compute what the level of ownership or performance on these elements is. Starting with ownership, you'll see that um it's been steadily rising uh but it's very variable. there's there's a kind of a a stop start in terms of the extent to
53:00 - 53:30 which black ownership um of those businesses um uh is is is performing. Um and and I must also h to add chair that this is the data that falls within the view of the of the commission. It's not necessarily the entirety of data out there because you'll recall you know uh some entities are exempted from uh you know uh obtaining a B certificate you
53:30 - 54:00 know they they they merely have to uh get a a affidavit um and then of course the sector charters also you know are not necessarily entirely within the view because they report to to the the department we we we do have access to some of their certificates and you will see I will I will give a sense of what the performance of the se various sectors are. So so that's as far as as
54:00 - 54:30 uh ownership is concerned women ownership on any given day typically is about half of the level of overall black ownership as indicated in this in this in this slide. Um when it comes to the other elements, management control, skills development, enterprise and supply development and social economic development, you'll see a a steady improvement in the achievement of targets. So the percentage is uh
54:30 - 55:00 percentage of achievement of of of the set targets. You will see that although uh in some elements there's an improvement um over time. uh however in reality the targets are not fully met um and I think it's important that point is important uh because uh if we if the targets are not being met then we will not achieve the
55:00 - 55:30 progress that we we require and so there is an issue really around uh full compliance with the legislation um as we review what we're going to do going forward. Um we we do need to intervene to enhance levels of compliance with the with the with the with the law. Um South Africa is a uh a country rules based on a rule of law. Um and therefore there has to be compliance um with the with
55:30 - 56:00 the law because in the laws are very important policies about developing developing our country and addressing um inequality as as it were. So I I I want to move now um to slide 36 please um which is the slide that captures um the the sectors the various sectors. So you will see when you look at this slide
56:00 - 56:30 that firstly you'll see the pattern over the years of of this stop start um nothing really radical um in terms of shifts. Um however there are sectors that are kind of promising in terms of their performance. Um if you look at the construction sector and you look at the last years you'll see that the numbers have kind of uh shifted upwards um which
56:30 - 57:00 is encouraging you know uh forestry uh transport um and of course uh tourism um we we see improvements there are there are lagards however um agre is is is a lagard that financial services is also a lagat uh as well as uh a
57:00 - 57:30 property. Now um you will see that the the the percentage of ownership in these sectors are higher than the target the generic target which is 25% plus one. Um and it's because the sector charters the basis and rationale for sector charters is that the sectors want to do more than the the average. So they they typically um set higher higher
57:30 - 58:00 targets for the various elements of the of the of the of the scorecard um um which kind of leads to higher numbers but still um again you know um targets are not being fully met um in this regard. And and the next slide 37 is um the depiction of women ownership across these sectors. And again you can see that women ownership tends to be um significantly lower than the overall uh
58:00 - 58:30 ownership um like ownership um in these sectors. If you move to the next slide, um here we we we we've been trying to track uh spend spend um as required by the law um on skills development and enterprise and supplier uh development and and and members will will agree these are important catalyst for the
58:30 - 59:00 entry of black people into the economy. Um we've been gathering this data from 2021 and you see there uh that although these numbers um again are not full compliance with the targets um if there was full compliance the the expenditure would be significantly higher but even with you know what is being spent um clearly there's quite significant
59:00 - 59:30 resources that are assisting with uh empowering and black people to participate meaningfully in the in the economy. Um you'll see that for east skills development in the few years we've been gathering the data it's 86 billion rand and ESD 116 116 billion um we could do better especially with the quality of of the spend um because there are issues here
59:30 - 60:00 we did a deep dive on ESD uh spendisha um which showed you know um uh successes where uh entities that deploy these funds are doing it in good faith with with the intention to achieve impact but in in other areas the funds are not fully and optimally spent and and I think this is what the transformation fund is seeking to to to solve uh because some measured entities they just
60:00 - 60:30 want to you know get the points on their scorecard so that they can be able to access uh government opportunities ities um they they will give the money to third parties and so sometimes there's leakage um these in terms of the the resources that that are um deployed for this purpose um I want to deal with another is on the next slide um this will probably be the last but one data set um so this major major
60:30 - 61:00 transactions again we've been uh monitoring and registered in these uh transactions since uh 2018 209 we the total number of transactions that we've looked at is over 790 I think that's the number um and the total value uh of the the acquisition of assets by black
61:00 - 61:30 people is is is is about 800 billion rand in the time that we've been tracking these transactions. Um now you will see the percentage of black ownership um in these transactions is is is is higher. Um and this higher than you know information on certificates and and this is because these numbers are the extent of the black people's stake in each of these um
61:30 - 62:00 transactions. and and you'll see again, you know, uh the the trend line is fairly flat um nothing radical um with regards to um yearon-year changes in in in in black ownership um in these in these transactions. Uh and and although although this is the extent of the stake, um before the the the the value that
62:00 - 62:30 vests in black people um the the the funding the debt uh to fund these acquisitions has to be has to be uh paid. Um but it is it it it shows that there are some inroads that are being made. Um so black women ownership again you can see it tends to be uh lower than the uh overall ownership. Um black voting rights
62:30 - 63:00 um kind of an upward uh increase in uh black voting rights which which actually means that um the black people who who um participate in these uh transactions they are also operational. So they will be they will be sitting on on on boards or or being part of the the the management of these these companies. Um I want to move uh
63:00 - 63:30 next to um in the the last year's uh report. um the sectoral view you'll see that um there was some activity in construction uh some activity in uh financial sector some activity in the generic ICT in the last year no major transaction um some activity also in integrated transport and and and property and it it shows you the extent of the stake of the
63:30 - 64:00 various groupings of black people. In the next slide, um I want to depict a a trend. Uh so so uh these acquisition of of of shares will be by black individuals. But more and more we see that they are through these vehicles of uh trusts and employee uh share ownership um as well as broad-based um
64:00 - 64:30 ownership schemes which really sometimes are communities as as it were. Um again um it's a a good thing but also challenges which I've already ref referred to. Um the next slide shows you the participation of what I call black designated groups and you know black designated groups uh black youth, black people living with disability, the black unemployed, black people in rural areas
64:30 - 65:00 and of course military v veterans. um and and and you it shows the the pattern um some participation but certainly not not enough. Um so I think that's is that will be one area that we need to focus on um to ensure that the the legislation achieves its purposes as it were. Um I want to move to a slide that shows you the funding uh of I think it's slide 44.
65:00 - 65:30 you pass the slide. So the funding for these transactions initially in the early years um vendor financing was the preferred way of funding these transactions um with the repayment of the the funds through a portion of the of the dividends. Uh since then there's been a shift. So we see that um
65:30 - 66:00 increasingly uh the dominant form of funding um is combined something called combined funding which which are a combination of uh bank loans, cash um a bit of government funding in the initial periods. uh although um government funding has dried out um and now it's really other funding and a combined funding that tend to be the way
66:00 - 66:30 these things are fund are funded. um the the the the the absence of government funding here doesn't mean that uh for example DFIs don't fund be it just means that um in the transactions that we looked at um there there wasn't government government uh funding um I want to move to the next slide I think in this these are sort of
66:30 - 67:00 takeaways um um which which shows that um as as far as major transactions are concerned in the last year we saw it a decline um the value uh of the transactions that we looked at was 23 billion um which is a decline from the previous previous year. Typically um in the value sometimes you'll see that it's um you know a few uh transactions which are large which
67:00 - 67:30 are lumpy will will tend to to dominate um at any given point point in time and and depending on the sector some of these sectors are are capital intensive. Um so if you look for example at uh transport you look at banking um so they they they tend to to dominate um um in the in the transactions in any given period. Um we we indicate that um going forward we need to do a much more
67:30 - 68:00 focused deep dive into the trans transformative impact you know um you know in terms of uh the participants to what extent directly deriving value from from the assets that they acquire uh through these transactions and that's that's an area we are eararking for more deeper um research uh going going forward I want to conclude clude the presentation by looking at other work that the commission does. Um in the top
68:00 - 68:30 bar um you will see that we we we issue um clarifications of the legislation. Um there's still a lot of uh need to understand um how to apply the legislation correctly. We we we offer that service. uh we we assist also you know giving advice uh to the parties that want to enter into transactions. Um we offer opinions. Um
68:30 - 69:00 and then of course we investigate uh complaints and in the lower bar um you will see that um in terms of complaints um 84% of them still have to do with fronting. So there's still quite a significant degree of fronting um of the which is which is a convention of the of of the of the legislation. Um in the next slide we we we we we depict
69:00 - 69:30 how we are managing these investigations. Um you will see that um of the total complaints we've received we've closed uh 399 uh through um alternative dispute resolution. Sometimes uh the party you know the respondents in a complaint you know will admit guilt and be willing to make good uh with a with their partners.
69:30 - 70:00 Um and so we encourage that. uh of course others um with close because there's no there's no evidence of of of funding and I think that will conclude my part of the presentation I hand back over to DG M uh thanks thanks commissioner to if we can go to that very last slide uh chair what as I've indicated earlier on that I will come back with regard to
70:00 - 70:30 this particular slide and also addressing some of the issues that uh commissioner Matuna has actually highlighted. So in addition to the implementation of the transformation fund in us taking implementation of tripleB act forward we are also looking at the amendment of the legislation to include amongst others administrative penalties because obviously what we are seeing is that a lot of companies they
70:30 - 71:00 are not complying in terms of the reporting with the tripleB commission in terms of like sort of availing information. So, but they do have a bee certificate that they're trading with. So, those are some of the elements that we going to be looking at over and above what uh Commissioner Maduna alluded to. The second part of it is the professionalization of the verification p practitioners because
71:00 - 71:30 here what we see is that a lot of companies do not intend to actually misrepresent with regard to their be certificates. However, the work is actually done by the practitioners. So given that the they this part of the the the the professionals are not h sort of professionalized even if we can we get
71:30 - 72:00 you uh misinterpreting the scorecard. We don't have much of a we can't do anything. We can't even blacklist you. So that's the step that we want to take. Then also working in partnership with SAS, the inclusion of a mandatory condition because the BE commission can only report to parliament and verify and enforce if they have access to information to make it mandatory that the same information that is using to
72:00 - 72:30 determine the tripleB level they must avail it to the commission of all issued certificate. And then the second one is also to to improve compliance and and enforcement. We're going to be working with the various oversight bodies in government because obviously tripleB cut across the private sector and the public sector. But for us to be able to improve compliance in the public sector, we need to work with the oversight bodies such
72:30 - 73:00 as the GPME uh the national treasury, the AGSA. taking from the lessons from SARS because if you don't have a SARS certificate in government, you're not going to be able to get an order number or to trade. And then we'll also work with JSE to increase the level of tripleB reporting amongst the listed entities. Then again we're going to also work with parliament in terms of bringing some of the sector charter
73:00 - 73:30 council that are not actually implementing their their part of the commitment in terms of the charter codes but also in taking and strengthening accountability across both the public and the private sector. will ensure that procurement and supply chain policies of the state organs and section 2172 and three of the constitution aimed at increasing participation of black suppliers. But I think the one other element is that we're going to be
73:30 - 74:00 working with with national treasury as they finish the triple PFA to make sure that be features it we are currently h in consultation with them. So we'll be able to then make sure that the tripleB compliance remain key in terms of procurement in the state and then over and above that we are collaborating with the competition commission especially on concentrated and untransformed sectors to be to be able to have proactive
74:00 - 74:30 investigation but also to have some sort of h measures that those sectors that still remain concentrated and untransformed. there are sort of some actions that are taken h against them and then the commission will also assist us to actually unlock to say what are some of the areas that the the tripleB are struggling with and the black industries are struggling within the value chain of various sectors of the
74:30 - 75:00 economy thank you so much chair uh the deputy minister is still online I'm going to hand over briefly to him thanks Thank you very much uh DDG and thank you to the chairperson. Uh chair as you can see it's a comprehensive presentation uh and uh with your permission I will um I will need to leave the meeting now. Uh and as I indicated if there are any uh questions for the ministry please um if
75:00 - 75:30 those can be put in writing we'll we'll gladly deal with those as they come. Thank you very much chairperson. Over it to you.
75:30 - 76:00 Are you done uh DM? Uh yes chair I've handed over to you. Thank you. Thank you very much. Can can the members Andre will help me with the hand so that we can line them up please? Thank you. No problem chair chair. Mr. Muchu raise his hand. Ch Mr. In that order Mr.
76:00 - 76:30 Ch those Mr. Gmer Mr. Ningila Mlaz Webster those are the hands currently chair thank you in that order I won't I won't describe Mr. Yes. No, thank you very much um chair. Um excuse my voice chair. I've uh I'm struggling with the
76:30 - 77:00 flu. Um and I hope that I'm I'm audible. No, I think chair um this report reflects the challenges of deep structural inequality in South Africa and in fact makes a case of why it is very important to sustain
77:00 - 77:30 uh instruments like the tripleB to ensure that we transform the South African economy and my sense is that the results here are again proof that uh if we don't become deliberate and put instruments in place to drive and enforce transformation structural inequality to transform the structure of
77:30 - 78:00 ownership management and control in our economy. You will never have a situation where those that have benefited from the history of inequality, separate development willingly want to integrate and participate in the transformation project of our country to ensure that there is an inclusive economy that represents the
78:00 - 78:30 demographics of our country. They will not do it willingly ch if we don't become very serious about setting up these instruments. This is evidence to that chair and those that want to make the moral argument against these interventions, they should see now the results here in this report. It's evident that the the those that participated and are beneficiaries of the history of appetite who still
78:30 - 79:00 control and have monopoly in the economy still don't see a need to ensure that they participate in the integration of those that were were were excluded in the participation of the of the productive sectors of our economy. It's evidence chair and and and my and and my sense chair is that uh if we don't empower um the commission to ensure that it has
79:00 - 79:30 powers legally that are legislated to enforce those that don't want to to tow the line. We've got chair to to do it as a committee. And if there's anything chair that we've been discussing throughout uh our our term of office in this administration, it has been about the issue of transformation and we have taken it to different angles. We have spoken about black industrialist program. We've spoken about how what is the role of the
79:30 - 80:00 competition commission in in relation to dealing with monopoly. uh we we've spoken about diversifying uh the economy away from the mineral energy complex which is monopolistic in its nature and still in the hands of white owned man white old men Africana to be specific and it all boils down to what then are the instruments that we have at our disposal and this uh triple B is one of those instruments but we must sharpen it chair and uh for me as a first time
80:00 - 80:30 member of parliament to really um uh find out that really this thing has been of TripleB has not been given the necessary teeth to bite so to speak. It's quite shocking because I mean you don't need a rocken scientist chair to to see the hesitancy uh of of transformation in South Africa.
80:30 - 81:00 And I think as as as as as in this 30 years that the ANC le government um has been leading this government I think chair actually on this matter it really was was found sleeping h and I think chair we we can't allow it that is why we have this situation of inequality in South Africa which by the way has a face poverty in South Africa has a face and
81:00 - 81:30 that base is black youth and women because the the economy has not been opened up and and if you look at the asset base of South Africa still reflects the trends of uh of of of the apatate era and I think chair h I I I welcome the recommendations uh to to try and give it more uh teeth to bite so that there are consequences uh to those that are are
81:30 - 82:00 um are refusing to integrate. But I do want to to make a a a a suggestion again here to say probably another discussion that we must be having is we must review the scorecard because in that scorecard you can see that there is a there is a pick and choose uh that no we'll focus more on skills less on control less on management so that to boost up our our our rating and and I think we've got to have that discussion
82:00 - 82:30 to say if we're going to weight them differently, the weighted average of each aspect in the scorecard is going to be weighted differently and skills should be the least weighted. It should be 0.0 at what? Because by the way, chair these companies, we're incentivizing them. We're giving them incentive to be able to provide these skills. They're not doing it out of their generosity. And and I think that we've got to review that scorecard and we've got to be to be clear about the
82:30 - 83:00 the the weights and and and the particular focus should be on on control. It should be on management uh and it should be on ownership and and and and and we've got to rope in h justice even if it means that we create a a separate uh court within the justice system to deal with these matters of of enforcement of triple. I think we had the time now to to theorize and uh
83:00 - 83:30 nothing has not been said in South Africa around the issue of transformation. There are no new things that could be said. We all know the reality of South Africa. But the point is that we need to be bold. We need to have the political will to do these things so that we change the course of of of of history in South Africa. Otherwise chair I can tell you now if we don't transform the South African economy if we don't deal with inequality the money that these people
83:30 - 84:00 have who are rich who are super rich in South Africa including you as DGs here and and and and this so-called political elite you won't have anywhere to eat that money you'll be just sitting on your inclaves in these Gulf estates and the South Africans who are poor who are the majority of this money will eat your life. You will not you will not be able to even enjoy this money if you don't do the right thing. And the right thing is changing the structure of this economy is including everyone in this column to
84:00 - 84:30 ensure that they have a better life, they have food on their table, the kids are educated and that for me is the fundamental thing that we must not be apologetic about. Thank you very much. Uh J should I just please proceed? Uh thank you chair. Um ch I think let me firstly
84:30 - 85:00 uh indicate that I think that there are very few of us um who would disagree that in terms of redress uh that needs to be made. Um very few of us if any would disagree that indeed redress is needed um within South Africa. Um we understand that apartate separated it suppressed um that apartate was based on race. Um and it's
85:00 - 85:30 separated in terms of spatial educational uh health and in this particular context it's separated also in terms of excluding the vast masses of South Africans from the um from the economy. But yeah, I've indicated over the years um that I've been on this particular committee that the problem statement perhaps is not
85:30 - 86:00 um on the why because we all agree that address is needed. We all agree that millions of South Africans and the vast majority of South Africans have been excluded from the economy. um with former president Tabo Becki speaking about the first and the second economy um and how it's impossible to grow uh a nation um where two separate economies um exist and so the problem is
86:00 - 86:30 is not in in the why but I think where we differ uh chair is is in the how and I I think that when one looks at Um some of the results that we are currently seeing with some uh 20 to 30 years of attempts to address redress uh reduce poverty, unemployment,
86:30 - 87:00 inequality in South Africa um and to increase um black South Africans in particular into the mainstream economy. uh that there's been a huge failure despite the fact that you've had uh broad-based black economic empowerment um and other legislation uh to attempt to include um the vast majority of South Africans. There has been a failure. The reason why I say that is because over the
87:00 - 87:30 years with millions if not billions, hundreds of millions, billions of rands being poured into um broad-based black economic empowerment and and the the structures and the legislation u and the different sectors. uh as we've heard in the in the presentation the implementation uh it has failed to be inclusive and so it is certainly a a misnomer to to some extent
87:30 - 88:00 u when we call it tripleB e uh because what it has in effect been very narrow been very narrow uh and there's sufficient reports out including the zondo commission which has found that when it comes to the implementation of tripleB, the first uh B part is not broad, it's narrow because there's only a few select
88:00 - 88:30 politically connected, wellknown individuals who have benefited and we're talking about billions of rans, hundreds of billions of rans Um I think we also have to look at and so I want to ask the question um to the to the commission do you agree that in in this particular instance with unemployment being one of the high at one of the highest levels ever with
88:30 - 89:00 inequality South Africa said to have the highest genie coefficient worldwide um poverty 25% plus South Africans experiencing severe poverty that broad-based black economic empowerment has actually failed in this regard to to address and redress the the inequalities that we have found then secondly chair so I want to ask that question first up um uh do we agree that
89:00 - 89:30 in that particular regard over the last few decades tripleB has failed and then secondly um with regards to the preferential procurement And the amount that government gives where even though you have a particular company that is um receiving a particular contract with government um that puts in its tender way above and is not the lowest
89:30 - 90:00 bidder, but possibly could be even be the highest bidder. because it has these tripleBE credentials. uh it gets it gets the tender purely because of its bee credentials and sometimes not necessarily on its skill um and its ability to uh to perform the work that government actually needs and we've seen this across the country with huge amounts of uh tenders going out to some
90:00 - 90:30 of these tripleB uh what the Zondo commission has also called tenderpreneurship uh and then the contracts fail, they are not able to deliver. Contracts have to be renewed. Um and more money now has to be spent. So my second question chair is uh is there a figure um that one could put towards how much has actually gone into
90:30 - 91:00 how how much of South Africa's taxpayers money has actually gone into these preferential agreements. Um and and is is there a figure uh and then what has been the return on investment? Is there some kind of tracking uh with regards to the return of investment that where we've actually given a particular percentage uh to those particular companies to assist them uh what has been the return on of of of investment
91:00 - 91:30 return on investment uh with regards to those particular tenders. Um, chair, I I I I do think that perhaps um and whether the commission has also looked at whether it in terms of the how whether it would not have been better to have taken those billions that I spoke of and I'm not able to quantify because I don't have the figures and apparently government and Treasury is not is not
91:30 - 92:00 making those figures available. Um but whatever that particular figure is, however, how how many hundreds of billions that is, whether we should it would be better to take that kind of those kinds of resources and invest it into our young black South Africans um who come out of high school and we teach them the necessary business skills. We educate them, we teach them,
92:00 - 92:30 we skill them. uh at that particular age if this had been done perhaps let's say 10 15 years ago you take a 100 200 uh young promising black South Africans and skill them in the area of business train them talk to them speak to them equip them about good governance and what it is uh to grow and to assist in growing the economy and whether that would not
92:30 - 93:00 have been a better investment than what we currently have now. Thank you, J. Thanks, Chair. I think I'm next. Um, yeah. So, I think what strikes me most of all about this presentation is the enormous disconnect between the scorecard, what is measured in the scorecard and actual measurements of economic growth and output. Um so for example all of the all the scorecard
93:00 - 93:30 measures are inputs. They measure the amount of ownership of black people the management control skills and so on. Um but there's no connection to the outputs of those of those measured entities or the beneficiaries um the companies that are actually benefiting from the skills development and the and the ESD you know things like economic growth, job creation, new business formation, innovation, productivity.
93:30 - 94:00 These are the measures of economic growth that um that we that we deal with every day and which have been flatlining for 20 years or more. Um, and you know, I'm just asking a question. Is there a correlation somehow between the fact that be is measuring the wrong things and the fact that the outputs in the economy have been so dismal? And going back to the point about the constitution, we all agree that poverty reduction and reducing inequality are
94:00 - 94:30 both vital objectives. But the counter of those is is wealth creation and broadening the access to prosperity. And if one looks at the outputs or the the the numbers that have been presented to us today, clearly be has failed uh for the reasons that Mr. Encoura and Mr. Thing have have both indicated which is why this committee has has uh called upon in its recent reports for the minister to implement a
94:30 - 95:00 an inquiry commission to not done by the commission but an inquiry as to what has worked and what hasn't worked in the be framework and and then what needs to be uh put in place to replace it. Then the question becomes does it require further enforcement of the BEu regulations as is being proposed here or does it require a fundamental rethink of what transformation is and how it is achieved? And
95:00 - 95:30 the the question also needs to be asked is is race the principal proxy for disadvantage? Is disadvantage measured best by looking at the color of one's skin or is it looked at better by looking at measures of disadvantage such as access to resources, educational levels, uh income distribution and so on. And well, one of the consequences of the BE regulations is that because race is the determinant of being a
95:30 - 96:00 beneficiary, multiple people, multiple beneficiaries of the same person. rather clumsily put. But what I'm what I'm saying is is that somebody or a company can be empowered multiple times. Um meaning that they're no longer disadvantaged. So it seems that that is something that has to be changed straight away. Um I do have a few specific questions which I'd like to ask. Um and one of the things that's always
96:00 - 96:30 puzzled me is this 25% equity equivalent uh regulation and um how is it possible to actually estimate what multinational companies have spent and does it come anywhere close to 25% of the value of their South African operations and is that that not a very punitive um a punitive requirement and then if if one looks at the the contributions Um, it seems that most of these
96:30 - 97:00 contributions are not cash contributions, but they're in kind. They're development of skills and ESD. And I was talking to a business development practitioner the other day who's one of their clients is Microsoft. And Microsoft doesn't give many money to these beneficiaries. They spend money on development programs which calls into question the issue of the transformation fund because transformation fund is assuming that the money is actually going to be hard cash um as opposed to uh supporting
97:00 - 97:30 development of these businesses through various programs. So I'd like I'd like to get just get an answer on that question. What proportion of the of the equity equivalent contributions is hard cash in loans and grants and what proportion is run through programs. Um then something which puzzled me was the charter councils were supposedly effective and operational but many of them were inconsistent in submitting reports and and what is the reason for
97:30 - 98:00 their inconsistency? Why are they not submitting their reports? And has a question been asked as to is it really just the the burden of submitting the reports and the fact that they have to take the box rather than it uh being taken on board as a as a real um uh real objective of these councils and the businesses that they represent. Um then um yeah this something which is quite
98:00 - 98:30 remarkable is 1,475 certificates have been have been uh submitted and if you compare that to the one I just looked it up 1,00 sorry 1,28,832 companies assessed by SARS in 2022 that means that 0.14% of assessed companies have submitted certificates and I mean that in itself that statistic on its own indicates failure of the B uh framework. Um but then if you look at the fact that
98:30 - 99:00 again according to SARS 0.09% of companies paying tax represent 72.3% of all tax collected. So the question then is the 4,475 certificates what what GDP what is the GDP of those companies or what is the turnover of the companies represented in those statistics you know are are the companies that are reporting actually representing by far the largest amount of the economy um and so possibly
99:00 - 99:30 that's an indication that we you're getting more information than we think you're getting not in terms of the number of companies reporting but in terms of their impact on the economy. I'd like to ask the commissioner um does he think that the Employment Equity Amendment Act regulations are required? Uh and if so, why? And are the sorts of penalties that are being proposed um by what you're
99:30 - 100:00 proposing here in the tribunal uh similar to what is proposed in the Employment Equity Amendment Act? I.e. 10% of turnover is a penalty for not achieving the targets. Um and then um two other questions. Who are submitting the complaints? Um by far the majority of the complaints are are in fronting, but I'd just like to know who is submitting the complaints. Is it the is it the people that are um being compromised? Uh not by the
100:00 - 100:30 people, you know, the businesses that are actually being fronted. Is it the frontters or the fronted who's submitting these complaints? And then is it not possible that in terms of next steps? Um there's a there is a contradiction here between the requirement for more compliance and the objective of the department to reduce red tape. Um because as you said last week in the presentation uh the department was saying that it has a red tape reduction program but it seems to
100:30 - 101:00 me what you're trying to do here is massively increase the red tape and the requirement for compliance which is going to make it even more likely that businesses will find a way around these regulations. Thank you chair. Fine Mr. Chance. Uh who's next? Andre Andre was next on the line Mr. Mr. Mr. GMA chair followed by Mr. Chinila. Honorable GMA in that
101:00 - 101:30 order and then honorable Webster. Thank you. Uh thank you very much chair. Um I I think uh uh one must thank the presenters Miss Mangol and Miss Mr. Matuna uh for the presentations that they have made. Um, in particular, the presentations
101:30 - 102:00 uh continue to reflect that we had a political settlement uh but we did not have an economic settlement uh in this country. And I think in the words of um uh member three um the there can be no argument um that the
102:00 - 102:30 transformation in this country uh has been slow um uh if not completely non-existent. So the presentations here reveal almost a non-talent manner or even a defeat in terms of trying to meet the objectives that have been set. Um, for instance, if one were to
102:30 - 103:00 just look at the DFIs, um, in the sample that was quoted by Mr. Matona, there's virtually very little funding of SMMES by DFIs, which are stateowned entities. So if there is a strike by governmentowned entities, it means our
103:00 - 103:30 own government is complicit um in terms of ensuring that there is no transformation that is taking place in the economy. chair. I think we have to move away from the current BE model which emphasizes black women and youth acquisition of minority shares. Uh we need to move to look at the control of the means of
103:30 - 104:00 production, the control of employment, the control of investment decisions by black people in their own country. We need to review this procurement regulations so that we make sure that we encourage economic diversification. We encourage participation not only at the level of ownership but at the level of
104:00 - 104:30 control. The people have to be seen uh to be controlling. in the JSE uh we still see that almost 60% plus of the top management echelons of these entities they are all run by white males. So uh both the issue of equity and the issue of be is something that uh has not uh been fully fully operationalized.
104:30 - 105:00 The other issue is really around the banks. The banks are also on strike in terms of funding um black people and making sure that our black people they move from the periphery of the economy to the center of the economy. um the redress is just simply not going to take place. If it would appear that uh even the BE commission is
105:00 - 105:30 saying that um if we are to impose penalties, we can only do that by going through the court process. Um, it appears that no one has ever been fined for providing false information. No one has ever been fined for fronting. Um, no one has ever been blacklisted
105:30 - 106:00 uh for doing any of these things or imprisoned uh because they did not comply. So the the whole issue of enforcement and compliance um seems to me um is like they're saying that the commission has been giving a knife to go to a gunfight uh where the gangsters have got rifles and
106:00 - 106:30 revolvers. Um if you also look at the whole issue of the sector codes there's just a nonchalant manner that says look uh so and so um did produce a report so and so does not produce a report and and what does that mean? Um it it would seem to me that the commission's hands are tied in terms of how to deal with this issue. Um it brings to question in fact who
106:30 - 107:00 wrote the tripleB act. Uh was it not written to actually ensure that it is uninforcable and therefore um the black people can in fact be kept outside. We need to review and repeal some of the regulatory barriers that stifle um the empowerment of our people. Things
107:00 - 107:30 like the PFMA and the CIDP as an example um which are there as gatekeepers rather than to enable our people to participate meaningfully in the economy. So it it becomes very important for us that we also look at the banks and the banking licenses that have been given um to make sure that the commercial banks can also play a critical and
107:30 - 108:00 important part in terms of making sure that um black people participate um in the economy. So for me um the whole issue of the lack of administrative power um in the commission can probably best be dealt with um by bringing amendments uh to the act
108:00 - 108:30 uh bringing them to parliament. But um it this is a very clear indication that There's a lot of transformation that has to take place in our country that there is not going to be a voluntary um transfer of the economy or sharing of the economy uh by
108:30 - 109:00 those who benefited from 300 years of apartate and oppression of our people. since Yan Fandriik arrived at the Cape. So we need very very seriously to rethink uh the manner and way in which uh the be is done to move away just from uh where
109:00 - 109:30 direct and indirect ownership are all seen um as something that could be measured uh in terms of the scorecards. We need to separate all of these things to make sure that um um our people can participate in the economy. I think one of the members um uh also talked about the kind of polarization that is going to take place in this country. Um, if people continue to wrestle with the
109:30 - 110:00 economy and they find that the doors are shut and they find that there's a glass ceiling in terms of the economy and that the only thing that um they can enjoy from something that is uply termed as democracy um is uh being able to go and vote once every 5 years and then their vote uh immediately thereafter gets seeded. um to people who did not win the vote.
110:00 - 110:30 So it's going to be very important uh for us that we reook um at the whole BE tripleB act. We look we reook at the commission and also we repeal any regulatory bodies uh that uh are in fact standing in the way um of the attainment of transformation in our
110:30 - 111:00 country because the kind of inequality that we continue to experience where only 11.4% 4% of black households are in the upper cile in this country. Um and 20% of colored households are in the upper cortile in terms of income in this country and 40% of colored households I
111:00 - 111:30 mean of Indian households are in the upper cile in this country and a whooping 73% of white households are in the upper cile in this country. It tells you the kind of inequality that we are experiencing and therefore the radical manner and way uh in which we need to deal with the economy because this is the stuff that revolutions are made of. So the
111:30 - 112:00 if the redistribution of the economy is not going to take place on a voluntary basis by the halves and making sure that the have nots also participate and the kind of polarization that would be seen would be untold. So therefore it's it becomes very important that we go back and we reook at this and we see how best we can deal with this
112:00 - 112:30 whole thing from a country basis. Um it's not a racial issue. It is an issue that says we need to have redress because there are people who were undermined for more than 300 years and could not participate meaningfully into the economy. Our people h are only being uh characterized and stratified to be people who must deal with spaza shops. What is
112:30 - 113:00 that? Why is spaza shops? What about being in manufacturing? What about being in mining? What about being part of the industrialization of this country? Because those are the high stakes that our people need to be participating in. not just tell us about Spaza shops only. Thank you chair. Thank you very much. H the next on the line I think it's member
113:00 - 113:30 it's okay. Oh, thank you. Thank you. Thank Thank you very much, chair. I think um the learning reality and the explicity of deep structural economic problems are clearly illustrated in this report that the South African economy still stagnates to
113:30 - 114:00 transform and there's this resistance from former aparted colonial beneficiaries, but it also clearly expresses the white men's arrogance in the transformation agenda of of of this country. I mean despite government misconception of progress I mean the
114:00 - 114:30 actual transformation remains slow inconsistent and limited to a narrow demographic. I mean if the report clearly says that only 29% of JSC listed entities submitted reports in the last cycle and black ownership has stagnated. I mean with real economic control is still in the hands of minority. I mean this retrogression is incompliance and
114:30 - 115:00 insufficient submission of data undercut any meaningful claim of advancement. So the transformation program cannot be perceived as as successful um when basic compliance levels are deteriorating. So I mean this even these reports highlight sever noncompliance and underperformance across uh across key metrics particularly
115:00 - 115:30 in in ownership and control where major industry players avoiding full transparency uh with inconsistent submissions and questionable verification practices. So it is indeed a systematic failure in enforcing oblig uh the obligation to report making monitoring largely symbolic rather than mandatory with with real
115:30 - 116:00 enforcement. So if if if these reports um in fact these reports um demonstrate a strong lean um towards compliance promotion um when uncomplent when when non-compliance exists uh with few entities face sanctions uh with zero comp uh consequence
116:00 - 116:30 management. So you begin to ask yourself um that in fact the tone suggest um that there's a serious reluctance to act decisively against violators undermining the credibility of this commission. So it's more like a reliance on on on promoting awareness rather than enforcing penalties that will result in impunity and stifles transformation.
116:30 - 117:00 Yeah. So in in when when when you look into um the measurements of of triple B of course the issue of the scorecard only provides um in fact it's it approach uh only only provides a structure um the continued manipulation of verification certificates fronting practices and lack of transparency um point to fundamental flaws in the
117:00 - 117:30 measurement. uh where many entities will score well on paper but while failing to effect substantive transformation. So the so system in fact uh incentivizes superficial compliance instead of substantive change um rendering measurements unreliable. So we cannot really rely uh on on on on on on the measurements that are
117:30 - 118:00 provided in the score card and and and and this report I mean it's it's deeply concerning where key uh sectors like uh construction ICT and finance show real transformation including the ownership of black people particularly black women remain extremely marginal. Um so these sector specific codes um there's serious lack of
118:00 - 118:30 transformation in high value industries. So there's so much that needs to be done uh structurally uh to really enforce or transform the economy uh for an overall participation in the mainstream where specific social economic sectors would not ordinarily h be subjected to the very low economic activity.
118:30 - 119:00 rather than manufacturing and industrialization. So in ter I mean it the report also exp illustrates um that black women in the are the most marginalized group in terms of ownership and participation and we've been speaking about this policies but but there seems to be no political
119:00 - 119:30 will and I would I would agree with my fellow compatriot honorable G that there seems to be negotiation arrangements that there are certain policies and industries that ought ought not to be touched. There would remain a centers of white privilege, privilege and dominance
119:30 - 120:00 where even the ownership and the participation of of young people is only on um the skills development. But when it comes to um enterprise the spending on enterprise development and supplier development it's more it appears more quantitative uh but lacks qualitative impact. So the funding is is mostly
120:00 - 120:30 spent on on low impact projects that uh that should that are mostly redirected to internal training without really strategic value uh to beneficiaries. So it's more of a tick a tickbox exercise uh which has largely replaced the actual developmental intent uh with with with limited uh sustainable outcomes. So and that directly impacts
120:30 - 121:00 on issues of service delivery um which its responsiveness is very inconsistent. So because I mean um I mean cases of fronting um are not really they take they they take long to to be to be resolved. uh which directly leads to uh which which doesn't necessarily give the entity some form of uniformity uh in
121:00 - 121:30 the application of process and with no clearly outline turnaround times of investigations and dispute resolutions. So which is very poor on its own. Uh as per the present uh the report um the data explains itself and uh I mean the funding mechanisms on year on year um I mean budget allocations will always increase
121:30 - 122:00 um but expenditures fall short on strategic needs particularly in enforcement capacity building and monitoring. So there's no clear link between funding and improvement and improved compliance or transformation outcomes. So there's um extreme misalignment. But what we would say is um that um these complian rates have extremely deteriorated
122:00 - 122:30 particularly among public entities. that ownership um ownership gains are superficial and fragile often inflated through trust and schemes that are high levels of fronting I mean among 25% um yet we um corrective enforcement uh skills and ESG uh spend have grown but transformation outcomes remain narrow in the short term and that in fact the tripleB
122:30 - 123:00 commission lacks real enforcement power. Uh uh in fact we are now calling for an agent a legislative reform so that we armed them so that they have teeth they have authority uh to take charge so that we can see real transformation happening. So maybe ch in in in conclusion um we we are really calling uh for
123:00 - 123:30 enhanced collaboration and awareness Um uh yet of course um uh there's a failure in confronting structural and institutional failures underpinning core outcomes with little very little in fact in terms of bull strategy decisive and first and legislative reform which is something that we are emphasizing that it has to be done and
123:30 - 124:00 it should be adopted by the commit to assist the commission moving forward as a proposed way forward instead of recycling these soft interventions which ve accountability um uh for continued underperformance and shows no appetite for disrupting the status quo. So I think um of course with what I mean it
124:00 - 124:30 doesn't even um it will not even touch a fraction in in in in in creating jobs and how um this uh the current h legislative culture and practice can assist in the absorption uh of young people including women and most um individuals in v vulnerable communities to be absorbed in permanent employment. which at this stage still remains at 20%. H and of course it will then raise
124:30 - 125:00 concerns about this the sustainability um of of of of the envisage or proposed h solutions uh for for for youth and women employment based on the initiatives that would have been undertaken um by these entities. So I think it's a it's a confirmation as
125:00 - 125:30 we conclude ch of course at the back of all the issues and the challenges that are being expressed by the report that there's little appetite from government and the question always remains are we in government or in office we have the appetite the willingness to govern are we relegating responsibility to to an to give authority in the legislative reform and the execution of
125:30 - 126:00 the policies that are already in place in favor of the sustainance of white privilege and white dominance. And if so, then we have a political problem in the nation. and is extremely unpatriotic that deploys that sit in government see no need in challenging the current social, political and economic status quo so that we see a real transformation in the future. So I will conclude as such um by amplifying the importance of
126:00 - 126:30 advocating for an agent a a a legislative reform. Thank you so much. Uh um member Webster and then we'll be followed by member. Thank you so much. Um thank you. Thank you chair. Um I hope I'm audible. Can you hear me?
126:30 - 127:00 Am I audible? You are audible, Miss Webster. Thank you so much. Um thank you um to the department for the presentation and I think much of what needs to be said has been said. I I have a few comments and and one direct question. I think one of the things first of all that we we need to recognize um and one of the things I think we need to take from today's
127:00 - 127:30 briefing particularly in light of even some of the developments we're seeing um between South Africa and the US uh some of the uh migration we'll call it that that we saw um over the past day or two is that just listening even to this committee to people who represent different political parties is that one reality that we are broadly aligned on
127:30 - 128:00 um as a committee and something we we have to state quite unapologetically as a country is the need for transformation is the need for redress particularly economic redress in this country. I think we can never get to a point where we are apologetic about that and I think um it's important that that is the the posture that we take when it comes to these issues particularly because
128:00 - 128:30 the so-called race laws that are lamented and tripleB is included in that has not worked and I think um that I say without uh fear of contradiction. It has not worked and I think there's rooms there's there's voices in the virtual room that have echoed that today. Um the reality is that tripleB is still centered on the elite. Uh ownership is concentrated in a
128:30 - 129:00 few hands. Often it's their elite, their politically connected and the reality is that the broader community remains excluded. And you only need to look at indicators like the level of unemployment and who is unemployed, levels of poverty and who is poor. You only have to look at levels of ownership and who owns. You look at the JSC listed companies or entities in this country
129:00 - 129:30 and less than 1% are actually wholly or 100% blackowned. And so it's very clear that uh as colleagues have said broadbased uh economic empowerments in this country has not been broad-based at all. And I think part of the reasons for that is that we're chasing empowerments within the confines of an already narrow corporate and industrial economy. So it's narrow
129:30 - 130:00 that the so-called mainstream economy is narrow. And so given that first of all, how many black South Africans, and when I say black, I speak about uh what used to be called PDIs, black colored Indian. How many black South Africans can truly then access that slice of that pie when it is already in itself confined? It's already small. It cannot absorb even the level of
130:00 - 130:30 unemployment that we have in this country. So what happens is that we're fighting for crime crimes in a bakery that was established uh on aparate structure and on an apartate economic structure instead of actually developing a new bakery baking new bread in new economies in township economies in rural value chain in digital frontiers. We're not focusing on investing in that and using whatever funds exist for
130:30 - 131:00 transformation within those economies so that they genuinely and broadly do then um uh benefit black South Africans, women, young people, the reality is that so long as we're talking about empowerment and and of course the five pillars are important. There's there's no doubt about it. But the reality is that when you have empowerment and you don't have ownership, and I just made reference to
131:00 - 131:30 that JSC stat that tells you that you actually don't have ownership. When you have empowerment that doesn't have ownership, what it is is tokenism. It actually is a status quo that perpetuates tokenism. And so what you don't see in the in broad-based uh black economic empowerment policy and in that legislation is a focus on building real uh blackowned businesses on growing industries that center ownership from the ground up. That's what we don't see.
131:30 - 132:00 And I want to echo the calls for us as a committee to make this a a a a focus of this seventh parliament for us to say how do we then go about ensuring that there's a review of legislation broadly because otherwise all we have is tokenism and we really don't have true transformation. And then lastly when we speak about skills development it's also confined We speak
132:00 - 132:30 about skills development, but we're not actually translating those skills into enterprise. So, as an example, we have TVET graduates, artisans who can build, who can fix, who can produce, yet we're not funding them into businesses. So we need to also look at how we start to direct some of the transformation funding and investment into vocational enterprise creation especially in underdeveloped areas especially in
132:30 - 133:00 underdeveloped and future industries because if we're not doing that we we also need to be very careful of solving for the past because we're trying to catch up. We'll find ourselves trying to catch up in sectors that are actually becoming irrelevant. And so we also need to have a focus on what are future industries where we have to be making sure that from the outset you see transformation starting uh to be uh centered in the development of those
133:00 - 133:30 industries. Now my question is this from the presentation that we got um it's clear that 33.9% of overall ownership in this latest report is black ownership. This is in a country where uh black people are over 80%. In the main and even the key sector charter councils like agribe um and defense are not functioning. So the question is how does the department
133:30 - 134:00 then intend to enforce transformation in sectors where the very monitoring institutions are defunct. If the monitoring institutions are defunct, what then is the plan? what is the turnaround when it comes to making sure that transformation is in fact enforced. Thank you very much chair member. Thank you very much chair. Uh I think that there's a lot that has
134:00 - 134:30 been mentioned by my colleagues uh in this uh session uh which is fair and valid. I mean uh I failed to think of the number of times that the be commission has come to this uh committee and said the same things over and over again. And it's you know they come here every time and tell us that we need more transformation. Yes we do but uh I'll say what I said when they came for the first time chair what have they done to ensure this and and the answer is nothing chair. uh and uh I think at some point we need to have we need to have a discussion as a committee on how better
134:30 - 135:00 we can maybe aid the BE the the tripleB commission because uh it's clear that they are not achieving their mandate and it's clear chair that be is continuing to fail its intended beneficiaries but chair uh when it comes to such matters I don't just want to talk you know because it becomes a talk show I do prefer to quote some stats chair just to remind this committee uh of where we come from and why we need to take the issue of
135:00 - 135:30 transformation very seriously. So I'll begin with uh the stats essays uh quarterly labor force survey the most recent one that's available which is the quarter 4 of 2024 chair it says that 35.8% 8% of black South Africans were unemployed during this period with just 6.7% of that being white South Africans. That means that over the past decade chair uh if you compare quarter 4 of 2024 to quarter 4 of 2014 that means
135:30 - 136:00 that the unemployment rate of black South Africans has increased by 8.6 percentage points while for white South Africans it has decreased by 1 percentage point. This is a clear indication chair. A clear indication that tripleB is failing its intended beneficiaries. Uh and then I move on to a recent study chair by the London School of Economics. It's it is written by Rebecca Simons. Uh it's Dr. Rebecca Simons rather who's a recent PhD
136:00 - 136:30 graduate. The the working paper is titled inherited wealth in postapartate South Africa a new perspective from probate records. So this was uh published by the D school of economics international inequalities institute which was led by professor uh Ferrer who I have the opportunity of knowing quite well. So this paper chair says uh highlights a a lot of things and I do have some
136:30 - 137:00 questions for the DTIC and the tripleB commission. Can the DTIC and the tripleB commission explain why despite three decades later uh uh of empowerment policies only 3% of black South Africans have acquired inheritable wealth of above 250,000 as highlighted by the Ellis E study by Dr. assignments. Secondly, will the department commission its own audits of intergenerational uh wealth transfer
137:00 - 137:30 outcomes disagregated by race and if not why? The second question chair is uh given the LC's finding that on that ownership of white housing stock remains overwhelming overwhelmingly uh uh uh skewed, can the DTI provide an assessment of the extent in which triplebe has facilitated black acquisition of tangible uh appreciating assets such as property and equity rather than merely symbolic ownership
137:30 - 138:00 through debt leveraged transaction or paper shareholding. And I'll get back to this point here because uh the issue of uh be share schemes were was mentioned in the second presentation which have also proven to be a failure uh quite a large failure. So the third question chair is in light of the LC's uh uh uh assession uh that that uh that tripleB policies largely premised on uh voluntary sales and credit facilitated acquisitions have had limited success.
138:00 - 138:30 Does the DTIC acknowledge the structural limitation of relying on market mechanisms of redistribution? Secondly, has the department addressed alternative policy options and if so, may those be tabled before the committee? The fourth question chair is regarding land housing and empowerment. What steps has the DTIC uh taken to integrate the asset transfer of potential RDB housing within formal
138:30 - 139:00 wealth building strategies under tripleB? And secondly, can the department provide figures on how many RDP homes have formally have formally been uh registered and leveraged for capital access by black South Africans since 1994. The fifth question chair is the LSE report finds that township housing remains the main site of asset transfer for black South Africans yet the rate of upward mobility from these areas is limited. Therefore, chair this begs me
139:00 - 139:30 to ask what policy interventions has the DTIC supported to catalyze capital appreciation, business development or infrastructure investment in townships that could transform the static assets into economic leverage. Uh the sixth question share is with regards to the unequal uh uh uh spatial redistribution of wealth. Given the persistence of spatial aarted in wealth ownership particularly in ownership of middle and upper income housing stock,
139:30 - 140:00 what role has the DTIC played in addressing this racialized spatial inequality? And the second part of this question chair is can the department submit a review of empowerment linked spatial transformation outcomes across metropolitan areas and uh I'm now moving on share to the second half of my question which deals with be share schemes which have proven to be a failure chair. Um uh many be um uh many be deals were structured for compliance
140:00 - 140:30 purposes not genuine empowerments. Shareholding was often vendor financed meaning black participants owned inversive commerce shares funded by debt with repayments uh uh dependence on dividend flows. Uh this is just a minor comment here. When company performance faltered or dividends were withheld beneficiaries have been left with nothing. This uh this uh this uh structure chair therefore has undermined real ownership and control turning empowerment into a symbolic exercise
140:30 - 141:00 rather than tangible wealth accumulation. Chair uh I've said it all chair but uh I will probably ask another round of questions uh during this the the second round chair but I would like for now the department and the be commission to answer these questions that I've raised because I do think that they're important here because we find that often times we say the same thing over and over again and it's becoming slightly annoying actually very annoying cheer because we come here and we say that black people are still living in
141:00 - 141:30 poverty and uh and uh and uh as well as uh inequality but then we talking about it but nothing has been done chair and maybe I just want to ask chair uh in a sense that uh the be commission has rightfully identified that yes we do have we do have a problem of poverty and inequality however what study chair has the DTI and the be commission taken to identify which type of inequality is prevalent and how these types of
141:30 - 142:00 inequalities can be resolved because merely speaking But uh the matter of inequality and poverty doesn't really cover the matters here because you and I both know that inequality also has divides. For example, there's education uh know there's uh the education levels of inequality that there's health levels of inequality and then there's racial which I've spoken extensively about. Uh however, we don't hear uh much on health and education. So I would appreciate chair to hear the be commission's uh
142:00 - 142:30 views on this and uh and whether to answer my question on if any reports has been commissioned and if so what have the findings been and what will the commission and the DTIC do to finally address the matter of racial economic inequality economic inequality uh as well as education health and special inequality in our country chair. Thank you. Thank you very much. I think this uh this was the last Andre the last contribution if I'm if I'm correct
142:30 - 143:00 that's correct chair okay no look I think I think a number of questions have been raised by honorable members uh I just want to make um few comments uh firstly that um uh we we we cannot talk uh redress and talk and and talk growth in the same line uh because um uh you know redress um I think many colleagues here who have spoken member
143:00 - 143:30 chance they've really articulated why it is important that we deal with issues of redress it's it's not it's not a nice to have it's something that we have to do as South Africa in order for us to transcend this period of colonial LAR did and I think many of the colleagues have made have made that that that that that case secondly race has nothing to do with race. It's more of a reality of what happened in South Africa since the arrival of Yan Fand. So we've got to correct that
143:30 - 144:00 because currently different statistics that are being bied around you it's very clear that um the the the unfortunately white males in South Africa enjoys more economic benefit than any other race or gender for that matter. So, so that's why it's important that we we we talk about these these issues. Now, to argue whether or not the threshold of 25% is correct or not correct, is enough
144:00 - 144:30 or not enough, it's a debate for another day. But there has had we had to have a starting point. If you look at countries like Botswana for instance, so so when you go to Botswana looking for their diamonds, government takes 51%. It's either you take it or you leave it. in South Africa, South African government chose the the route they chose. It is the view of the committee now as you hear that we are not satisfied not that we're not satisfied with the commissioner and DDG and the minister
144:30 - 145:00 and them who are not satisfied with the status quo and we think that things cannot remain the same in this administration. So therefore what what basically we're calling for firstly is the reform um of the B legislation in particular looking at these um five areas that that are focusing on to say when we when we make um um um the amendments the ownership management and
145:00 - 145:30 control I think honorable Mutu and honorable GMA in particular and honorable they argued this thing very firmly and another that this the scale in which we are going to rate the ownership, management and control must be far higher than the rating for enterprise development, skills development and all those things in order to effect meaningful transformation as a starting point. Secondly, the issue of centralizing the
145:30 - 146:00 the the the B rating agencies through SAS has become a very critical issue that we need to look at as the committee h in terms of these reforms that we are proposing. And thirdly, I think we want to make a firm recommendation um and and you have been indulging this commissioner. One would have thought by now that we have an equivalent of the
146:00 - 146:30 competition commission tribunal or something like that to sit over the cases as you as the report has pointed out now that there has been no movement in law. So therefore we want to recommend that either we enhance h and expand the mandate of the competition tribunal to look into all the big cases so that there can be movement and consequences in the same space. So because without those issues we're not going to be able to make meaningful
146:30 - 147:00 contribution. So the the the other area um I think um uh the other area which is critical um in the main um is uh um is that the uh sorry I'm just looking for this point. Just one second. Okay. No, I I think
147:00 - 147:30 that's that's fine for now. I think I think those are the issue is issues. Uh DG and the commissioner, if you can just indulge the committee uh for another one hour just make sure that we touches on all these things because we we think that this is not an era where we need you to respond in writing because we already have our eyes set for what needs to happen. H so we want to have to conclude this debate so that the next time when you appear you must appear with proposals for the reforms that
147:30 - 148:00 we're calling for. Uh over to you DDG and the commissioner. Thank you chairperson and thanks to to the members. Uh chair like I've said earlier on we brought the whole team so obviously we will have to indulge the committee in all the questions that they've asked. So in terms of I'm I'm going to just take some before I hand over to commissioner Matuna because most
148:00 - 148:30 of them were directly to him and then I'll also ask just before the commissioner I'll also ask Mr. Maputa to touch on especially the one or that Mr. Chance has raised about the equity equivalent. So chair in starting we have noted the all the inputs that have been made starting with honorable honorable uh honorable I've written here honorable apologies honorable member the the the
148:30 - 149:00 suggestion about the review of the scorecard it's what we've also sort of h seen because when you look at the spending on the skills development and you go and find what skills are actually being spent and on or if we have now to say are the skills actually empowering these black youth and black uh people in terms of gaining something or running businesses it's something else. So we do agree with you that when we look at the
149:00 - 149:30 review that's an area that we need to to look at as well and then on honorable thing the the two questions I think they were for for Mr. Madona but then the one with regard to return on investment check I think what we have seen is that with implementation of the black industrialist honorable member what we've seen is that we've seen a lot of sort of black new entrance in those sectors that were concentrated so so the
149:30 - 150:00 black industrialist budget allocation was not much we do agree with you that we need to work with national treasury to see in terms of the other part of the government spending because some of these black industrialists that we are funding we're funding them to be able to supply some of the key products in government but what we've seen we can give example of those tenders is that they don't we we fund them to get factories but when these tenders are
150:00 - 150:30 awarded they're bitten by a by a company from another county so therefore that market access for the local black industrialist is not there So obviously when we measure the return on investment we also need to look at those elements to say if the company can supply can actually manufacture and supply their products outside South Africa but they unable to then supply within the South African government. What is it that we need to then do? And then honorable Chs
150:30 - 151:00 I guess the the issue about the most of the issues I think they've been addressed through the comment. So the one element I want to touch on is to to to to about the further enforcement. What we are asking for is that while we will still be reviewing let's implement what is actually the tripleB act. Let's enforce it with the capacity of the BE commission and if we enforce we will
151:00 - 151:30 then see the impact of the of the monies that are being reported. What I also want to highlight is that a tripleB certific compliance certificate allows some of the companies to then go and do business with the state or trade in the public sector on or in the critical sort of sectors. But the challenge is that if they're not meeting their end of the stick, let's say they set aside funds for enterprise development, but then
151:30 - 152:00 after a year we can actually see the spending to those enterprises within their value chain. So it means they didn't meet their end of the stick, but then they be the certificate allowed them to actually trade and get access to other markets. So that's what we are we are also trying to say let's actually address that as you get the be certificate for a year you need to be able to also meet your commitment hence the enforcement that you are emphasizing and then on the equity equivalent Mr.
152:00 - 152:30 will come in. Not all of them are in kind because obviously we're dealing with the first thing the enterprise supplier development. I'll give an example with the city bank one. It's a fund set aside. So there's a couple of them that actually even with the the AITF one, the auto one, it's funds set aside, but then it's coupled with market access. After you've bought the machine for this particular company, you still need to give them orders within your value chain. I think chair and members
152:30 - 153:00 will recall when the banks came they reported a very high figure in terms of their enterprise supplier development spending I think it was around about 300 billion but when you look at the activities that relate to the financial sector it's very little I think the amount is actually very low so therefore it was running for just for the last report it was around about 1.9 billion so it means they are spending but they're not transforming the sector they're spending depending on other
153:00 - 153:30 items that makes them commercially viable but then they're not transforming the the sector and then on on on on the comment of honorable GMA we have noted the comments that you have given to say we need to to reook at how the GFI support the implementation of the tripleB act as well as reook at the act on its own to say to b to create a balance to say let empowerment be let
153:30 - 154:00 empowerment and ownership and management control be seen where we are actually reporting for for for for transformation and then honorable in singing I guess the the comments have been noted and then we will as we as we actually undertake the process of enforcement we'll look at that we've noted the issue about the sector charter council one of the key things that minister is doing as part of h consultation for the transformation fund is to meet
154:00 - 154:30 with the sector charter council. What we need to enforce is that the targets is by the sector. So therefore they need to make sure that they monitor that monitoring by law by the tripleB act. They have to submit the the the reports to the minister. So we will look at that to jointly with the sector ministries as we enforce. And then honorable honorable Webster I think the the issues that you have raised they are actually noted and
154:30 - 155:00 I think one of the key things is that as we as we now looking at all these measures that we are enforcing what we are driving chair is that in our a we've set a target of a 50% black ownership by year five. So, so, so if we are now on 33% with some of the sectors going down, we need to then put more steps to make sure that we are going to reach that 50%. So, if the 50% is what we've said,
155:00 - 155:30 so we then need to then be honest with the committee to say for for certain sectors we are on 15%, for others they are here on 50%. But then what we want to see is that as we implement and enforce we need to be able to come back to the committee and say this is the 50% black ownership and then this is the database that also includes collaboration with SARS because the issue of of honorable chance about the
155:30 - 156:00 people that file for returns and the 1,00 with B commission it's what we have been looking at there's a law reporting that we need to address. So therefore the collaboration with both SARS and CIPC and STS SA will then help us to get that that data to see that what is the level of tripleB and then also the mandatory provision of the SAS to make sure that all the verification agencies they need to put information available
156:00 - 156:30 for for the for for tripleB commission. So, so chair, I think I've touched mainly in the questions that related to to the department. So, I'm now going to hand over to to to Mr. Muta before I hand over to the commissioner to deal with the ones that are be commission related. Thank
156:30 - 157:00 Uh, chair, I think Mr. Much, you still on mute. If you can. I won't disturb you. I'm just looking at the time. D, you can go ahead. Okay. Okay. Maybe let me hand over to the commissioner. I'll just check with
157:00 - 157:30 Mr. Muta in terms of the sound. Commissioner, if you can take the one for B commission in the meantime. Okay. Thank you. Thank you uh chairperson and honorable members for I think a very robust and uh comprehensive debate. Um, and I think
157:30 - 158:00 that, you know, it's a debate that has touched on all of the important issues that we need to deal with uh when it comes to um moving the needle on transformation. uh it's not going to be just doing doing one thing, you know, that's going to solve the the the problems. Uh it's I
158:00 - 158:30 think there's a there's a there's a quite a significant degree of complexity, you know, in terms of what it is that we we are we are dealing with. I appreciate the the uh commitment to transformation. Um I I think that if we are all on one side on the same
158:30 - 159:00 side of the need for transformation I think the rest of the issues that we need to deal with um will be will be will be will be uh possible. Um so so I I I appreciate the the the the fact that uh the community is wanting to zoom in on things that need to be fixed. Some some of the
159:00 - 159:30 interventions are of such a nature that they can uh shift the terrain. Um and and let me let me let me let me let me talk about the legislation. Uh first of all ch to to to to recognize and appreciate that the act that the legislation is is a creation of
159:30 - 160:00 parliament that that uh you as parliament have given us this tool which we've tried to use as best we And to the extent that there are issues with the tool, I really am encouraged and inspired that you are then saying to us, bring that tool so we can fix
160:00 - 160:30 it because we can only do things, initiatives that you empower us to do. So I I I I I think that if we accept that then I think we we we are in we are in in in in business because uh the the problem the overarching problem and when we talk about it chair
160:30 - 161:00 it's because the it it it is the cause of many errors. the fact that there is not proper implementation of the legislation because there's no compliance. This the or or even the compliance um is not
161:00 - 161:30 um good in good faith proper compliance as it were. So we got to fix the implementation of the legislation. We got to fix com compliance. And and I and I do appreciate those contributions that have seen the need to say if we if we want the the outcomes to improve on the on the outcomes, we have to improve on the implementation.
161:30 - 162:00 I I think that that is a crosscutting overarching challenge that we need to to to to to address. Um and and and as it relates to the commission, I I appreciate honorable GMA's metaphor that you have a commission going into a battlefield where others have got guns and we only have have a knife.
162:00 - 162:30 Um let me move on to deal with some of the uh specific issues and and chair it seems to me that in fact you are inviting us to come back to you through the department as the policy custodian the custodian of the of of of the legislation to come back with amendments that will help us to deal with some of the the the issues
162:30 - 163:00 Um let me try to deal with I might not necessarily be able to deal with each and every point raised because some of them are of a general nature um and they can respond to various issues. Uh so uh honorable Wayne uh has raised the issue around um the bene the be has benefited
163:00 - 163:30 politically connected chair at at at at the beginning one could say that was a dominant form of be that um certain individuals were able to avail themselves at the from the starting blocks to to the legislation. But we quickly identified that as a problem and
163:30 - 164:00 we then moved to broad broad-based and so we are now talking about broad-based. Hence, we've introduced the five elements of the of the of the of the score card because those offer different pathways to empowering uh black people. So he he speaks about uh the the
164:00 - 164:30 the tender system uh and how that tender system has allowed um corruption and how much money has gone in in into that. Uh so so so the the the the quantitative aspects of money that has gone into into into tenders because the procurement of of of services is is governed by in the in the
164:30 - 165:00 previous procurement the triple PFA it was only 10% considerations of who the service providers are who the suppliers uh 10% of the wage. So so so the 90% of of of of the cost is is about value the value of the of the and the utility of of the service be being procured. So so
165:00 - 165:30 considerations of the the the character and color of participant has always been 10% and and 20%. and and as far as the the 10% and 20% is concerned, I need to remind honorable uh Wayne Maxine that the the whole point of having enterprise and supplier development is to actually focus on
165:30 - 166:00 capacitating the suppliers, hold their hands, make them to meet the requirements, lift them Um because black people coming from being excluded, not having the skills, not having the experience, you can't expect that as soon as they get into business, they will able to operate at a level. So enterprise and supply development is actually a mechanism for for taking the
166:00 - 166:30 entrepreneurs, building them and getting them to actually properly supply. And by the way, I can tell you I have seen where that works. So enterprise and supply development actually works in converting and uh uh uh capacitating the black ent enterprises and entrepreneurs to actually be players in
166:30 - 167:00 their own right. And the nice thing about them is that they are 100% owners of their business their their businesses. All they need is an opportunity and support. And when things go wrong, typically when things go wrong, it's because that element has not really worked worked well. Um and so we in in fact if you if you look at our study and I do encourage members to go and look at our
167:00 - 167:30 study on ESD it it shows you under what conditions does this tool actually work in my view um it is the element that is going to help us deal with the issues of the issues raised by honorable hands around out inputs and outputs because the jobs are going to
167:30 - 168:00 come from businesses, they're going to come from enterprises. The more and more we use ESD and other interventions to establish proper businesses owned by bad people, we will increase the number of the entrepreneurial base. we will increase the number of employers and we will deal with with with this with jobs. So there is no dichotomy
168:00 - 168:30 between the legislation and what it intends to do and the outputs. So let's let's close the gap that gap uh uh in order for the legislation to to impact on on on on on on growth. So in short when bad people are empowered they will be investors they will be uh creators of jobs they will be
168:30 - 169:00 innovators and it is already happening. It is already happening in the in the economy. Uh, of course there are many professionals, black professionals who will tell you who are rising up the ranks who will tell you that they would not have been there if it had not been because of the E legislation. On the back of uh the legislation are black people who are who are billionaires. we just don't have
169:00 - 169:30 having enough of them um who who would not have been there because of the of the legislation. So we we we need to be careful about throwing the baby with the by the water. But I do want to emphasize the point that when you have not implemented the legislation properly, when you have not even uh capacitated the entity that are supposed
169:30 - 170:00 to supervise and oversee effectively to do its work, we can't lament the the the outcomes. And I'm happy that the committee is saying we are ready to do better going going going forward. I I'm now with issues raised by honorable chance um because honorable chance uh says is
170:00 - 170:30 race the correct variable? And I think other members have responded to this to this question by saying the problem we sit in is that black people, colored Indians and Africans account for 92% of the population and yet there yet they own a ministry. So the bulk of this economy 70 80% of the of the economy is owned by seven seven% of the
170:30 - 171:00 population. Someone said poverty, unemployment and inequality have a black face. So, so, so it cannot be that we we we suddenly want to come with instrument that are color color blind. Um, because we will miss we will miss the the target if we if we suddenly did did that and it doesn't mean that merit because I know this is often raised with
171:00 - 171:30 issues of merit. If you cannot be a supplier if you do not merit, if you do not meet the merits and the requirements, you you cannot be promoted. if you if you do not have married. But the reality is that left to its own with the with the entrenched structures of exclusion still in place, the culture of exclusion still in place, we we we cannot abandon uh that
171:30 - 172:00 criterion. Even the constitution by the way it said to to redress pe people uh persons who have previously discriminated against. So there there is a targeting of who we want to to uh uh to to to to improve the uh conditions and circumstances of of of life. Um and I think that that question has been um
172:00 - 172:30 put uh put to to to to rest I believe. Um now um you also say honorable chance you compare the B commission and and SARS. Well, actually, um I I would I would wish, you know, um if I were to to have my next life uh having the commission like SARS with all the powers of SARS
172:30 - 173:00 um there we can't compare the commission and SARS because SARS has SARS SARS will cause you to be arrested. Sus will seize your property. Sarus will go straight to your to your to your bank accounts and punish. Um so I the out the reason why people submit tax returns is because they know what the consequences are. So so yes
173:00 - 173:30 actually you're right. Why why don't we actually place the commission at the same level because the issue we have to deal with is so so important for the country. So we we are we are unviable in the long run as a country with if we do not do radical take radical steps to address the the inequality. Um so I I think I think I'd like to make that point. Um you I I I
173:30 - 174:00 I'm not able to comment about the the employment equity act except to to because this is why it it is it is embedded within the BE commission because it seeks to in a targeted way advance the the interests of people who were previously disadvantaged in the in the in the in the workplace. I my understanding is that the the the
174:00 - 174:30 minister of employment and labor wants it to work more effectively um and to to give it a bit of flexibility and and and and dynam dynamism um as as it were. You ask about complainants. Uh largely it is it is people who have been wronged who know that uh my credentials were used to access a particular contract a particular opportunity but I have not
174:30 - 175:00 had due returns um contrary to the deal that I entered into contrary to the relationship that I entered into. So it is actually the people who who are affected um in that way. Um but it's also interesting for certain certain forms of uh fronting. It's actually the companies themselves. The we recently we recently met with a
175:00 - 175:30 with a large uh company in South Africa who told us of certain practices um where uh you know they they build uh ghost ghost structures and divert divert uh monies into those uh ghost structures as it were. So the there are all kinds of sophisticated ways of circumventing the the the the legislation and again people can do that
175:30 - 176:00 because there are no disint incentives. uh for example even if you know um adverse findings are made u I've already indicated what the challenge is with actually um having uh justice uh take take its it it its cause um I do not believe based on I have not heard any complaints by any of the companies who are at least kind of
176:00 - 176:30 complying and and and having themselves um you assessed by a verification agency that that is um actually red tape. In fact um the existence of the verification verification industry to large extent it takes away the burden you know from companies who want to be allowed to just continue carry on with their doing their business. Um so I do not think
176:30 - 177:00 that you know um compliance with this particular legis legislation can can be considered to be red tape. In fact if if there's any red tape um and one or two members have referred to this is having the commission been able capacitated to turn around the work we do whether we assess a major transaction and some of these transactions are investments into billons. we would like to do them quickly. We need we need hands or or or
177:00 - 177:30 or conduct these these complaints. Um some of them are complex and they do take time. Uh so the the turnaround time for complaints is 12 months. Within 12 months you might we must have finished uh uh uh well as as as a as a maximum. Of course we we try to do it as quickly as that. It's it's in our interest that we finalize these investigations quicker.
177:30 - 178:00 Um uh yeah, you know, and we are working on looking at uh and enhancing our capacity uh being supported by the by by by the by by the department. But but I think we need far more radical intervention to properly capacitate the the the commission. Um uh one of one of the the means to to do this is to have the commission uh like competition and other regulators uh collect a reasonable fee for the for
178:00 - 178:30 the services that we we we we we we offer. Currently we all our services are are free are free of charge. Um I think I I I I think that the the comments the questions and comments of honorable GMA are well well taken. I I think his his uh understanding of the fundamental problems. I I I
178:30 - 179:00 I agree with um it's it's about how we we we change the the the structure of the the economy so that it it it it reflects it becomes a truly African um economy um in terms of dem demographic and and and democracy. Um I I agree with with him. I think he I think honorable GMA
179:00 - 179:30 um is is saying perhaps as part of doing that we need to look at uh how we rethink be um and we we we we would be guided by us as parliamentarians uh in terms of the the ways in which the configuration of the policy and the configuration of the legislation uh can be can be improved. But honorable government made reference to a a tool.
179:30 - 180:00 um when he spoke about banks and and licensing and by the way the legislation as you know says everybody in government all organs of of of state which includes the Reserve Bank by the way uh when you issue a license the act says you need to factor in the need for inclusion of people who are on the margins of the of the economy.
180:00 - 180:30 Um in my view I still have to understand the extent to which especially the the Reserve Bank in terms of its role in the transformation of the financial services sector ease factory uh be and and empowerment the participation of black people. So, so this tool where where there might not be
180:30 - 181:00 person where there might not be large amounts of money to dish out to support empowerment regulation which is uh mentioned here in the in the in the in the in the act. In fact, the act envisaged a far more strategic, a far more catalytic role um for the state because of the way the state interfaces with the economy, the way the state interfaces with with with
181:00 - 181:30 business. We license, we give support, we procure. If we use those instruments effectively better than what what we've done now, we would be in a different space. So again, it comes back to implementing effectively compliance and and having a far more greater sense of ownership of the policy and accountability for it because all of the questions are are confronting the department and uh the
181:30 - 182:00 commission. But in fact the whole of the state is the hands and the foot soldiers for transformation because the tools are dispersed across the state. They don't all sit in the department. The department has its own tools. So we encouraged to hear what uh minister of mineral resources minister mantasha are doing there. Minister of
182:00 - 182:30 Transport are doing there and that's why we say that really to up our act on compliance and implementation you should help us engage the rest of of of government because some have far more formidable tools in their their disposal to really make a dent on the challenges of of of of inequality.
182:30 - 183:00 Uh I move on. Uh I think it was honorable in I I think his his sentiments are well taken. um he he spoke about verification. Um just going to take a few of the things that he he he he he he he he said because he started off by by
183:00 - 183:30 saying we cannot have transformation if if there's no non-compliance and and and and I think he's spot on there as I've indicated um and and he calls for end to the end to impunity but he spoke about verification um I I think I think it's a space that we we we we thought we assumed we would act in good faith that there would be integrity but we know that is not the
183:30 - 184:00 case and so we we do need to intervene especially if we if we have the legislation it's as currently configured. Of course there must there must be measurement and and that measurement must get inside the companies and only at the moment the verification agencies. Now does the state want to take that responsibility upon ourselves? So we have government presumably perhaps officials
184:00 - 184:30 of the commission going inside and actually doing the measurement. I don't know but perhaps let's work with what we have and just discipline further uh the verification space because if if we if we are not measuring the right things and we are not we we the numbers look good but the impact and the reality
184:30 - 185:00 is different there's a problem. So it seems in 2013 when the amendment was done the the there was already thinking around something doing something more but it was we didn't take it further. The legislation didn't take it further. It only actually defined it um by referring to a uh BE verification professional um which it defines as a
185:00 - 185:30 person who performs any work in in connection with rating the status of enterprises in terms of BE um on the authority of or accredited by a BE verification regulator. We we we have to bring the the the profession uh or the or or the the practitioners um in the sector to the same level as
185:30 - 186:00 auditors where if you are found to have done dodgy auditing, voodoo auditing, you you you are disbarred. I think that perhaps is something to consider as we deal with the strengthening and closing the loopholes um in the in the in the in the legislation. Um if I move to um honorable
186:00 - 186:30 Webster's questions um I think that well taken um she is arguing for us to look for more opportunities to create original enterprises uh who which are owned by black people. Um but we must empower the black black people. We must open the opportunities for for black people. We must we must uh break through
186:30 - 187:00 the closed value chains which competition commission year on year reports on how concentrations how levels of concentrations are so deep so stubborn. Um so so we open space for uh new new uh uh owners, new enterprises as opposed to just having a stake in existing businesses. I take that uh well
187:00 - 187:30 um honorable website I I it's my passion as well. how do we support black people to actually set up their own um b businesses? But um I don't know if again indulged me to uh refer to uh a study done by the comp competition commission on online platform in line with dig digital
187:30 - 188:00 economy because I strongly believe that yeah perhaps it's difficult to for black people to enter historical legacy industries but new industries which are emerging within the context of our democracy cannot exclude. If they exclude then I think it's a serious failure on our part but they looked at online platforms and technology sectors where if you look at
188:00 - 188:30 how the technology develops and access to support it is still the case that black innovators, black people who have ideas do not have what white originated white innovators have where they have angel angel investors or or or of venture capital. So they've identified a
188:30 - 189:00 market failure uh correctly in a sunrise industry the digital economy that I think we need to take guidance from um because it really makes the precisely the point or even renewable energy new industries what measures are we putting in place to ensure that these new industries when they set up already take black people into into So, honorable
189:00 - 189:30 Webster, I I I I I take your point. Um, honorable Julie, um, I don't know if I captured uh, you'll you you you'll you you'll forgive me. I might not have captured uh all the points that you you have made. Um but the one which I think um I appreciate is you have said
189:30 - 190:00 that parliament needs to come to the aid of the be commission so we don't sound like a scratch record and and become a a a me a messenger who who is who is punished. Um I I I appreciate that. Um but you talk about something important intergenerational wealth transfer. That is that is the
190:00 - 190:30 mischief. Um because the levels of of of inequality are not only about current current inequality based on access to income and access to opportunities. It's inherited. Honorable Ghana spoke about 300 years. So in reality a portion of of our population are sitting with 300 years of
190:30 - 191:00 wealth which which is what entrenches and perpetuates ine inequality. So so we got to be actually measured the the acquisition of assets by black people. Absolutely absolutely important and and this is where transformation I think the point you're making is that empowerment is much broader than the B
191:00 - 191:30 act because it it we should be also looking at how in terms of housing education we we are imparting capacities for black people to participate meaningful in the economy and therefore since this morning
191:30 - 192:00 so so you so you're so you're right um and you make the point that we can't rely on on on the market only commissioner. I think you muted yourself by mistake. Oh, sorry. I was I was saying that I'm I'm
192:00 - 192:30 encouraged that honorable Julie has referred to asset acquisition been been deliberate about asset acquisition. Um but in fact it so happens that the the the legislation is is a is is a a a a a an incentive for precisely that. Uh so for example we we we know a number of uh property companies
192:30 - 193:00 who as you saw are are laggers are are seeking to to actually improve their performance. They're talking about offloading some of their assets their properties in their portfolios to to black people. Uh so you're right and you talk about infrastructure, you talk about townships. Um the element of socioeconomic development by the way
193:00 - 193:30 speaks to investment some of them in townships or rural areas which sometimes are the only significant investments as it were building clinics, building schools. Um the SEZ program of the department is being aligned as as also an instrument for precisely creating assets infrastructure in the hands of of of of
193:30 - 194:00 black people. I think that as we as we review the legislation, we can look at how we refine and make that a lot more robust, a lot more a lot more um sharper. And you spoke about land as well. And I think that the the land and expropriation act speaks to to some some of those things. So so so this the suz remember is also considered a a a spatial empowerment instrument. Um and
194:00 - 194:30 you spoke about spatial um inequality. I think that I think that uh um those are important observations. Um um I would I would like to engage with you perhaps even offline um because I think you were raiding a much wider set of of of of issues uh that perhaps also go be beyond the
194:30 - 195:00 the legislation and the way it's operating. But you made an important point around shared these these ownership share deals and what happens um when the share drops. Um you know um once you once you play in in in in the economy uh you you you you you are subject to the the dynamics and and the laws of of
195:00 - 195:30 business. Uh sometimes businesses do well, sometimes they they don't do well. And when when they do do well, and there are many black people, by the way, who manage to invest and do deals in sectors that are growing and and many of them, for example, the the ownership has vested. So they are set for life. That's good because it's it speaks to that uh generational wealth, you know, um for them and their families and and and
195:30 - 196:00 progeny going forward, you know, um they will help raise the the empowerment of of of of of black people. Um there has been no some some companies uh in mitigating that they they they they offer a discount and there are all kinds of creative things which have been done in recognition that you have to protect the black beneficiaries who are first time sometimes first time owners of shares as
196:00 - 196:30 as it were. But I think this is where capitalism capitalism actually actually how it works. Um I don't think that black people are insulated um as it were. Um but we can't therefore say because of that no we shouldn't we shouldn't be promoting acquisition of shareholding by by black people. And I don't think that's what you you were you you were you were saying. Um we so so some of the broad-based and I'm
196:30 - 197:00 I'm dealing with your last issue. Some of the uh broadbased schemes and trusts um so so so the the bene the benefits don't come in monetary forms. They also come in things like bazaris for for for for for students very important. Um when
197:00 - 197:30 when when people acquire skills that they're able to build and cater for their families. Um and in black families you you also you also cater for your for your for your siblings as it were. Absolutely. some in health um and various other areas in in kind. Um because inequality by its nature is multi-dimensional and we got to tackle it on all of these
197:30 - 198:00 fronts and we must allow the legislation to actually speaks more consciously. Right now it's a bit indirect uh but more consciously we need to tighten because trust are allowed that they are vehicles for broadening participation but we have to make sure that they work in ways that actually um do true they are impactful and they
198:00 - 198:30 do true empowerment. That's one thing that we are grappling with. Um so when we assess this transaction we look very closely at that to say broadbased yes but not what are you proposing to do and where we see that it's a good investment is not necessarily dividends cash but it's investment in building the foundations for participation in the economy by black people we support um so as I said there's
198:30 - 199:00 a quite significant complexity in dealing with this demon of of inequality and and and the act has has has its role but it has to work with other instruments. It has to work with with other legislation. Um and we we we must be deliberate in creating a very firm and robust network of instruments and ecosystem
199:00 - 199:30 um that brings all the critical levers um both within the state and and and outside to really move the needle. I think it's possible but there are others who have referred to uh commitment political commitment will um and appetite and I think those are issues which where I believe you can help us as as as parliament. Um I I I I I my takeaway my takeaway of
199:30 - 200:00 of what the chair said and that's the last part of my comments is that he's inviting us to bring proposals around how to fix the legislation and how to do better uh in in in enabling the commission to use an improved tool and to to do its role. role uh effectively um and and
200:00 - 200:30 looking up as a role model and the likes of of of of SARS. I think we are we are encouraged by that and we will reflect on that and and and work with the department uh and then and the minister um to uh come back uh with with our proposals. Um I think I'd leave it there.
200:30 - 201:00 Thank thanks commissioner chair through you Mr. earlier on was struggling with the sound. So I just want him to to touch on the EIP. Okay. But not too long because we are running out of time. I'm mindful that some members need to go to parliament. So uh I was intending to end at one but I can stretch it with another 10 minutes just to ensure that we get a better benefit of the of the presentation. Just not too long.
201:00 - 201:30 No. Thank you chair. the the question was on um what what activities that EIP involves um in other words how is it delivered what kind of support does it provide to to the to the intended beneficiaries. So the the the interventions are diverse um because of the it deals with the different needs of uh of of of different
201:30 - 202:00 beneficiaries across sectors. Um we always look at as and when an EIP uh a program is initiated we look at the sector that the multinational is in and identify what are the key uh priorities in in those sectors. H for example, if you're talking about OTO is about how do we uh create uh how do we localize you
202:00 - 202:30 know manufacturing of components by black people here in South Africa. Um if you look at other sectors like ICT, how do we use the ICT um you know skills development process to empower young people with with digital um you know skills. So the interventions uh and the delivery model of each EIP will will differ according to the to the sectors and others also
202:30 - 203:00 will give um financial support directly. Um especially for those that are in the financial financial sector like we do have the JP Morgan they provide um a cheap loans or accessible loans for the for the black suppliers and black SMEs across the sectors that we have identified that have got high um job creation impact um you know so so those
203:00 - 203:30 those are the the delivery models so through the transformation commission fund. I think we are saying that let's aggregate h let's ensure that some of the the funding or the the resources that will be coming from the EIP and be able to be um to be to be aggregated and and be utilized um depending on the sector um in in providing the support that the SM as well as the black indust
203:30 - 204:00 um it the in terms of the value that has been um that has been um dispersed um that was the other question. Um we measure that since 2015 to 2023 when we did a an evaluation of the EIP um the there was about 5.8 8 billion that was um that was invested by the by
204:00 - 204:30 the multinationals um in in all those areas that I mentioned skills development um access to loans access to grants and other interventions that that are necessary for the for the for the support of of of SMMES and individuals across those different uh sectors. Thanks. Thanks. There was just one question from
204:30 - 205:00 honorable Webster of saying how does the department and force implementation of the charter council chair. What I want to highlight is that the the the sector codes they come via sector ministries. So the first part is the will of the sector ministry to be able to enforce that implementation because the charter councils are appointed through these various sector ministry like the defense one is the minister of defense the
205:00 - 205:30 agribe is the minister of agriculture so I think through the transformation fund we are going to then visit the ministries individually because that's where most of the processes start. So this is the more an intergovernmental sort of approach that we need to take alongside the various sector ministries. Thanks CH. I'm going to hand over back to you.
205:30 - 206:00 No, thank you very much. Uh are there any like followups from members? We just being mindful of time because I've allowed everyone to to engage successfully extensively. So h if there are any clearing uh follow-ups that you you may want to make I can invite you for 30 seconds for that matter.
206:00 - 206:30 Andre is there anything there? No takeers chair moment. No hands. Chair, who's who's there? There's no hands at the moment, Chair. No one's Okay, perfect. Well, I I think um um let's conclude, honorable members, that I think the the portfolio committee of the DT have made firm proposals um h
206:30 - 207:00 on on on reforms. uh and we we will then in the immediate not when we next when we meet next time because uh that might be a long time we'll expect um a submission of the proposals uh based on the interaction by members uh that will then suggest h the press process forward that involves uh the work of parliament as well as other critical stakeholders that we have to uh
207:00 - 207:30 that we have to consider. So, so I'm not sure of the suitable timelines commissioner which you can that just just a high level spelling out what are the what are the you know what is the the road map towards achieving uh those reforms that are being proposed that that would be quite suitable on your side. Is it is it a month? Is it two weeks? Is it
207:30 - 208:00 what you can come up with broad level commissioner? Sure. Um we we we we would probably need um perhaps if you indulge us or we do a thorough job uh perhaps two months because we as a commission have been noting challenging areas, things that
208:00 - 208:30 need to be fixed. We have to as as you know we we we don't legislate directly. we have to work with the with the department. Um so we we don't need to hand over that um to the to the department and the department will process that engage the the minister. So I don't want to to squeeze us. So perhaps maybe the next two months we should be in a position because as I said we've we've we've been building a database of areas that need fixing. We
208:30 - 209:00 will have to also do a bit of consultation as uh DDG Susan has indicated with with the sector departments as well. Um so we need to do some work within within within government. Um so um at at the minimum u two two months I think would be a good a good um time frame. Uh so we we we work with speed and and and be are able to return whilst there's still the the
209:00 - 209:30 eye on his heart um so to speak. Okay. You know what I was asking for is an outline of the road map, not the actual work. Oh, I see. Yeah. to tell us that look we've identified this piece of legislation these areas h that we are going to look at and then you then say
209:30 - 210:00 that for us to deal with these issues then you give us timelines as per so that we can work with you in terms of ensuring that we we find each other in in in in the in the collective that you can then go work with a department and do your work Okay. I'm going to put pressure on you that because we know that there's lot going there's going to be a lot of fightbacks. Um there's going to be courts. There's going to be all those things. But as long as we can have a clear program to say we are now
210:00 - 210:30 embarking on reforms informed by one to three these are the starting points and timelines we will be consulting. Then we know the parliament portfolio committee will know the kind of work that you'll be working on. Okay. I I I I get you. Um I think therefore that that a month would be s sufficient and and I hope that would be uh agreeable sorry uh the department through TDG would be agreeable to that timeline that should
210:30 - 211:00 be feasible chair so within a month over to you uh chair I think a month will be will be fine we'll be able to provide that uh that road map we do have a deep dive with minister and the deputy minister next week. I think we will have that and then a month is fine. Okay, I think that that should conclude this part and thank you very
211:00 - 211:30 um this should conclude the part. Thank you very much DDG and other members. I will implore members of the committee to remain just for a few minutes so that we can take through the the minutes andre you going to lead us. um those minutes were long sent to you members but we've also made sure that they're in your chat group in the way that they've been sequenced uh for your reference. Uh thank you very much DDG commissioner and all other uh
211:30 - 212:00 colleagues um we will proceeding with the work of of the portfolio committee. Andre if you can take us through. Thank you. Thank you chair. Thank you chair and members. Thank you. Um chair we will start with the minutes of the 29th of of of January. Um it will be flighted now. Check
212:00 - 212:30 which which we had the meeting on 29th in room 35 35. Okay. 29th of January. Chair. Yeah. just just say what was the topic so that the members briefing by the National Consumer Commission NCC and also the DTIC and the NCC on in response to the national disaster of class the classified food born illnesses just show us who was present so that we
212:30 - 213:00 don't get confused with it's a long time ago yeah Mr. Chance Mr. Mini yourself, Mr. Mingila, Mr. Tambbo were present at the meeting. Chair can I get a move and second from those who are present? I move that we adopt. Mr. Chance, Mr. Chance, you moving and second. I'm seconding. Okay, Mr. Chila is
213:00 - 213:30 seconding. Thank you very much. The next one, Minister Julie just The next one chair is I think it's the 28th of January. Okay. Yes. Who was present? It present was Mr. Gaba, Mr. Mutu, Mr. Chance, Mr. Guli, I think Mr. Gila was also present. It dealt with the um SAPS
213:30 - 214:00 the allegations of governance failures at SAPS and we engage with the minister on that day chair. Okay. And I get a move and second of the minutes of the edit meeting. I move. Yes. Second colleagues. Come on. We've all read this minute.
214:00 - 214:30 Thank you very much. Mr. Chinga. Can we move to the third one? We're moving now. Go with the meeting on the 4th of February chair. We've met with the finance committee chair um present members were uh members present. If you can go down
214:30 - 215:00 sing was yourself Mr. Makutu Mr. Charles Mr. Mlulli go down Saganda Mr. Shingila were all present at the meeting chair was a joint meeting with the standing committee on finance Mr. Yeah Mr. 3 was also present old present chair and Mr. Webster as
215:00 - 215:30 well chair we need a move in a second for the meeting Mr. Chance chair on the 4th of February and we need a second Mr. The next
215:30 - 216:00 meeting was on the 5th of February. We dealt with the SAPS on the amended revised and performance plan and we and we considered a minutes as well. We Mr. Gigaba, Miss yourself, Mr. Chance, Mr. Guli, Mr. Mrs. Zani, Mr. Chingila, Mr. Think, Mr. Webster were all present on that day chair. Can I get a move and second for these
216:00 - 216:30 minutes from the members? Thank you very much. Member Chance moves. Mr. Chance move. Yes, Mr. Ching. Seemingly I'm left with the two of you in the meeting. I'm I'm seconding chair. I second. Thank you. Let's move to the next ones.
216:30 - 217:00 the meeting on the 18th of February present M was yourself Mr. Gaba Mr. Kumutu Mr. Chance Mr. Mulli Mr. Mr. Zani Mr. Ninga was present Mr. Tambu Mr. Langa Mr. Think and Mr. Webster were all present on the day chair. Okay. Can we get a mover? I move. Okay. A member moves a member
217:00 - 217:30 member seconds. Thank you. The next one the next meeting is on the 19th of February chair we had the meeting with the CIPC and also in relation to the zona commission's glisting we had yourself
217:30 - 218:00 Mr. Gaba Mr. Cutu Mr. Chance Mr. Mlulli Mr. Misani Mingilla I think we had a full not a full there was two apologies Mr. Mr. Tambu and Mr. Thing were present on the day chair can I get a move and second for this minutes I move for adoption thank you very much Mr. Thank you very much Mr. Mr. seconds the next one
218:00 - 218:30 The next one will be the 5th of March say we had the NLC on the revised annual performance plan and third court financial non-financial yourself Mr. Gaba Mr. Mutu were present Mr. Chance Mr. Mruli Mr. GMA Mr. Ningila Mr. the tumble were all present at the meeting chief. Thank you. Can you get a
218:30 - 219:00 move and second? I move. Second. Uh second. Thank you very much. The next one I think we must be moving towards the end. Yeah. 11 of last year chair we had the IDC on the revised annual performance plan yourself Mr. McGaba Mr. Makuto was present Mr. Chance
219:00 - 219:30 were present if you go down Mr. Mlulli Mr. ing the president meeting chair. Thank you very much. Can we then get a move and second? I move chair for the adoption. Second,
219:30 - 220:00 I second. Thank you very much. I think I think that's that's all the the minutes for today. Check if I understand. Okay. I think just for completeness next time let's make let's try by all means to make sure that at least every month we just work through the we have 30 minutes for 20 minutes to deal with the
220:00 - 220:30 minutes so that we are all we have not forgotten how the decisions were made. No problem. Yeah, thank you very much honorable members. At least we are on time and let me take this opportunity to thank you for your participation and the extent in which you have engaged and I think that the inputs were very helpful um to really assist the department understand where we coming from as a portfolio committee and then I hope that they will within a month come back to us
220:30 - 221:00 uh to propose uh the timelines and then so that we can work on them and ensure that at least during our our time if we leave this thing until too late we might not achieve our objective. So I'm I'm quite happy that they will come back within a month then we can take it from there. Thank you very much. The meeting is officially a thank you chair.
221:00 - 221:30 Recording stopped.