The Minister of Trade, Industry and Competition Mr Parks Tau has emphasised that South Africa’s transformation agenda is both a constitutional and moral imperative. He says there is still a great need to transform the economy because of the effects of the legacy of apartheid on black people who were deprived of access opportunities.
Tau was answering questions at an Oral Reply session of the National Council of Provinces which he joined virtually.
He told the Members of Parliament that the establishment of the Transformation Fund is one of the key instruments of government to change the structure of the economy and has been necessitated by the need to fulfill constitutional imperatives to transform the country’s economic and industrial landscape.
He referred to the last report of the Broad Based Black Economic Empowerment (B-BBEE) Commission. He said this report found that there are critically low levels of spending on enterprise and supplier development and non-compliance with BBBEE laws; with measured entities shown to be merely ticking the box with limited impact on the desired transformation and empowerment of the historically disadvantaged segments of society.
He corrected the misconception that the Transformation Fund’s 3% proposed contribution by entities is a levy, making it compulsory and insisted that companies will be contributing and participating in the fund on a voluntary basis.
“The details of how companies can participate in the framework of the Transformation Fund and how their BEE status will be assessed once the fund has been formally approved. We have engaged and continuing consultations with stakeholders. We’ve had very good disussions that have helped us remodel the fund and what it can achieve. We are still engaging in discussions with the private sector and will keep the public abreast of developments. We want to ensure that this is not just a fund where people just contribute, but that it achieves the socio-economic objectives,” he said.
He reaffirmed the need and commitment to review B-BBEE with the aim of addressing challenges that have inhibited success in its implementation.
“We need to assess what the problems have been in the implementation of B-BBEE. Some of the biggest problems identified so far include, non-compliance with empowerment laws by some companies who decide they haven’t bought into the idea of creating equity and non racialism in South Africa. The other is fronting, where companies seeking to benefit from B-BBEE procurement and other processes put exploit vulnerable black people by putting them as faces to companies that they don’t have ownership in. There have been many instances of corruption where people have submitted fraudulent BEE certificates, undermined the system and received contracts under false pretexts. That is a very serious problem that we need to address,” Tau said
He added that the approach will not be to fight with the private sector, but to collaborate to achieve the objective of creating a society where a person’s ability to attain their talent, capability and ambition is not hindered by race, class or gender. He insisted that the fundamental objective of transformation is ensure the country creates wealth and access to opportunities for all its citizens.
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