Is Political Turmoil Derailing BEE?

Is Political Turmoil Derailing BEE?


The current political turmoil has had devastating effects on certain areas of the economy and may result in further unfortunate consequences for those involved and for many bystanders. In these uncertain times, it is easy for business to lose sight of its vision and goals, and focus on the negativity that abounds.

Deon Oberholzer, CEO of the BEE verification agency, Veri-Com, urges businesses not to be sidetracked by the current political turmoil. He believes the turmoil is impacting negatively on the drive for BEE (black economic empowerment) compliance.

Oberholzer considers the infighting amongst the ANC alliance partners as unsettling for the business community and the general population. The discord is so severe that Zwelinzima Vavi, general secretary of the Congress of South African Trade Unions (COSATU), has described President Jacob Zuma’s administration as “heading rapidly in the direction of a full-blown predator state,” run by “corrupt and demagogic political hyenas.”

These internal power struggles create uncertainty amongst politicians that may well trigger a feeding frenzy of personal enrichment based on a fear of getting redeployed or fired.  This attitude will be further exacerbated with the pending municipal by-elections.

So what is the impact on BEE?  Oberholzer explains that “Arbitrary tender and contract allocations based on personal enrichment are a major concern to business. Business needs a stable and predictable environment when making major strategy or capital decisions. The current uncertainty and negativity in the market has the opposite effect.  In an effort to protect themselves from the insecurity, businesses may slow down their BEE processes, or even worse, abandon the process completely. The recent strike action, the slowdown of the economy and the excessive job losses we have endured is have not helped matters.”

What should business leaders do in this uncertain climate? Is BEE a viable option for the decision makers?

Oberholzer says, “It may seem counter-intuitive, but I believe business should do more to embrace BEE.  The BEE Codes are actually very well designed and deal with the major aspects needed to ensure a stable, functional and growing economy.  BEE deals in a balanced way with people development, business sustainability and creating opportunities for more people to become part of our economy.   It is also important from a social engineering perspective as every act of conciliation, BEE compliance and transformation actually alleviates pressure on our fractured society and business.  These are some of the critical requirements for us to grow and flourish”.

Entrepreneur Magazine is South Africa's top read business publication with the highest readership per month according to AMPS. The title has won seven major publishing excellence awards since it's launch in 2006. Entrepreneur Magazine is the "how-to" handbook for growing companies. Find us on Google+ here.