The dti'S BROADEDING PARTICIPATION DIVISION have issued the attached notice. It's not very clear when the first certificates will be issued under the new codes because they write English as well as Hlaudi spokes it.
My friends at BEE Matrix reckon business will just get on with it and try and improve their score over time. I don't agree, the ridiculousness of the targets and the sheer cost of implementation will put companies off and then they just won't bother. Yes it'll take a few years but not that many years.
This table is an analysis of thumb sucked JSE listed companies (including the JSE) and the figures could be a bit out. It shows how much many SHOULD have been spent during the period that the Annual Report discusses. Some are 2013 others are earlier. At least we know that the figures will be higher when the new codes kick in. They make for fascinating reading. The larger corporates need to spend a huge amount of money on skills development. Mind you the JSE's target of 24m is not a shabby amount either. What must be borne in mind is that the target spend is DOUBLE (or as the DTI might write DUBBLE) what we're used to. To see this in perspective we need to look at Standard Bank's 2013 annual report. On page 40 it says the company spent R424m, which was 2.9% of payroll (which suggests that my figure of R887m is fairly accurate). Page 131 shows the complete income statement. The Net Profit Before Tax figure for that year was R13.124bn. If we now add on the tax deductible amount of R463.76m off that amount it comes to R12.660bn. That's a fair drop in profitability. This means less money is spent on tax, enterprise development and most importantly SED.
|
Target Race Group |
||||||||
|
Company |
Salary bill |
Target spend (6%) |
AM |
AF |
CM |
CF |
IM |
IF |
|
Standard Bank |
14 796 000 000 |
887 760 000 |
407 348 726 |
342 293 033 |
58 049 696 |
50 042 841 |
19 016 280 |
11 009 425 |
|
MTN |
6 709 000 000 |
402 540 000 |
184 705 502 |
155 207 080 |
26 321 669 |
22 691 094 |
8 622 616 |
4 992 041 |
|
NASPERS |
8 738 000 000 |
524 280 000 |
240 565 908 |
202 146 291 |
34 282 120 |
29 553 551 |
11 230 349 |
6 501 781 |
|
AECI |
2 976 000 000 |
178 560 000 |
81 932 266 |
68 847 260 |
11 675 851 |
10 065 389 |
3 824 848 |
2 214 386 |
|
FirstRand |
10 620 000 000 |
637 200 000 |
292 379 256 |
245 684 780 |
41 665 840 |
35 918 828 |
13 649 154 |
7 902 142 |
|
Telkom |
9 861 000 000 |
591 660 000 |
271 483 224 |
228 125 953 |
38 688 027 |
33 351 747 |
12 673 664 |
7 337 384 |
|
Nampak |
3 535 000 000 |
212 100 000 |
97 322 097 |
81 779 256 |
13 868 997 |
11 956 032 |
4 543 292 |
2 630 327 |
|
JSE |
405 000 000 |
24 300 000 |
11 150 056 |
9 369 335 |
1 588 952 |
1 369 786 |
520 519 |
301 353 |
|
Nedbank |
9 349 000 000 |
560 940 000 |
257 387 351 |
216 281 263 |
36 679 278 |
31 620 068 |
12 015 626 |
6 956 415 |
Oh yes you can take the money you don't spend and distribute it EAP-fashion amongst the poor for education purposes. I'm not aware of many investors that would go for this. Are you in the business of banking or handing large amounts of money out on bursaries?
And then there is the issue of productivity vs training. The skills development code appears (you can't say anything more than that with the revised codes, everything "appears"" and nothing is clear) to require companies to spend money on SAQA-aligned programmes. As a multinational you can't send your employees on training back at your parent unless you can show that it "meets SAQA's requirement for recognition". Using Nedbank as an example. Their annual report (page 21) gives a total staff complement of 28,748. Average annual spend per person needs to be R19,512.32. I don't know what the percentage of EAP staff there are but that trainng figure per person is going to be much higher. When are these people going to work?
Who stands to benefit here?
You can't spend R19.5 k on the training of a lowly messenger. You'll never see them at work. It was Anglo who pointed out in their comments of the codes that it just makes sense to throw huge and ugly amounts of skills spend on the educated and higher-up-the-hierarchy Africans. I wouldn't be surprised to see a number of connected people informing Nampak that if they pay for their kids' Michaelhouse school fees they'll get BEE points. Broad-based my foot!
And these codes are broad-based? Not likely and the South African public wants them, champing at the bit they are. At some stage something is going to give and I hope to hell that this realisation doesn't come too late. Every day more of our rights are eroded by poor legislating and we just take it.
As a postscript – we know the codes are truly trying to remove white people from the workplace – or only those white people that fit in with the EAP statistics may work in each organisation (white male 6.4% and white women 6.9%). You still have an obligation as an employer to train your white staff as well. This is over and above the 6%.