Posted: July 1, 2015
IBM SA Equity Equivalent Programme Launch in Midrand
Officials of the dti in attendance,
Ladies and gentlemen
Please receive our sincere regards for having been invited to today’s important gathering and to share a few remarks with you. We are gathered today for the launch of IBMSA’s implementation plan but also as part of our on-going efforts to promote the Equity Equivalent Programme as an alternative for doing B-BBEE ownership for qualifying multinationals.
The launch today signals the beginning of the implementation of IBMSA Equity Equivalent Programme which was unveiled in February 2015 by the Minister of Trade and Industry, Dr Rob Davies.
Between then and now IBMSA has been working together with us as the dti to draw up an implementation plan for the approved Equity Equivalent Programme. Therefore, post this launch work will begin in earnest.
The B-BBEE journey that we have travelled since 2003 when the B-BBEE Act was promulgated has not been easy, given the many socio economic development challenges that we face as a country.
Ladies and gentlemen B-BBEE in South Arica is a transformation intervention to address the pre-1994 narrow development policies that only favoured a minority in our country. These policies resulted in the black majority being marginalized from the main stream economy and their economic and social wellbeing was systematically underdeveloped.
Thus B-BBEE is among the various policy instruments evolved by government to restructure both the economy and society in a manner that transcends the racial divide of our Apartheid past. Ours is to continuously develop policies and to monitor that they are changing the lives of our people.
One of the reasons we embarked on a process to amend both the Act as well as the Codes was to deal with the challenges that arose in implementation of BEE and compliance over the years. It is also to ensure that radical transformation does happen. Radical transformation means that we need to accelerate the pace of transformation as well as deepen the setting of our targets.
This is in line with what the President stated in the inauguration address following the 5th General Elections in 2014. I this regard he stated that
“Economic Transformation will take centre stage during the new term of government as we put the economy on an inclusive growth path. As the National Development Plan outlines the structure of the economy will be transformed through industrialization, broad based black economic empowerment and through strengthening and expanding the role of the state in the economy.”
Ladies and gentlemen, despite the challenges, today we are witnessing the launching of an implementation plan of one of the biggest Equity Equivalent Investment Programme to date. We have every reason to celebrate this important milestone as we reflect on the B-BBEE journey we have travelled so far.
It is important to note that we are here to showcase an initiative that will contribute towards us reversing the injustices of the past that led to the exclusion of black people from participating in the main stream of the economy.
Our long standing belief as the ANC led government, is that, working together as government and the private sector we can achieve more. This is no different with regard to the implementation of B-BBEE and all of our transformation policies.
The success of B-BBEE will not be realised without an active participation of all the social partners including government, business, and civil society. Our promise to yourselves is that we will always endeavour to create a environment that will ensure that you business thrives within the context of our national development objectives.
Programme Director, ladies and gentlemen, the Equity Equivalent Programme is a programme targeted specifically for multinational businesses that are unable to relinquish equity anywhere else in the world except their domiciled countries.
As a compensation for not being able to sell equity to comply with the ownership element of the B-BBEE scorecard, the multinationals contribute 25% of the value of their operation in South Africa or 4% of their annual turnover over an agreed period towards a programme aimed at empowering black people in the areas of Research and Development, Enterprise and Supplier Development, Skills Development, and more recently towards supporting the development of Black Industrialists.
It is a transformation programme that supports industrialisation and entrepreneurship, so that we can address the challenges of inequality, poverty and unemployment.
Throughout the implementation of B-BBEE and other transformation policies we have been able to improve lives in certain aspects of our society. However, we also acknowledge that there is still a long way to go.
With regards to the EEIP instrument, to date we have 7 approved programmes amounting to over R1 billion but we would like to encourage more participation from multinationals especially those in the productive sectors of our economy. Job created directly and indirectly as a result of these interventions is approximately 2000.
The development of at least 100 Black Industrialists in the next three years underpins industrialisation and economic development. Our central task as the state is to ensure that there we provide the necessary infrastructure, finance and access to markets by mainly working with our SOEs. This is in line with Outcome 4, which is about “decent employment through inclusive growth”.
In conclusion I would like to commend IBMSA and other six multinationals for their embrace of the Equity Equivalent Programme and the spirit of transformation. We also look forward receiving applications from other qualifying multinationals to participate in this programme.
It is my honour to launch the implementation plan for IBMSA and call upon all of you to join me in celebrating another good B-BBEE story that contribute towards us making South Africa a better place to live.
I thank you.