Department must put muscle behind construction charter

06-10-2016
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Business Day
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IHAVE been trying to understand the Department of Trade and Industry’s big success related to the transformation of the economy to no avail since the beginning of 2016.

My first request was sent in January and I am still waiting for a response. Maybe the department is too busy transforming the economy to answer to a lowly columnist of one of the most influential dailies.

So, I decided to do some digging to find out what has happened since the construction sector was fingered with corruption or collusion in connection with world cup stadia.

It is my information that the Department of Trade and Industry is seemingly hard at work considering a charter for the construction industry tabled to it in July by the Construction Sector Charter Council. Some construction players are believed to be lobbying the minister of trade and industry not to approve what will make their lives a “living hell”. For the first time, there will be a gold standard that will force change in what must really be the last vestiges of apartheid architecture: the property industry.

If the government is serious about radical economic transformation, it will act very fast to make this industry accountable. There are too many stories like the construction collusion in the run-up to the Soccer World Cup that make a mockery of the political settlement of 1994 if allowed to persist.

One of the most embarrassing debates in the black economic empowerment (BEE) space that the government has so far failed to resolve is the “once empowered always empowered” conundrum. Put simply, there are those in business who argue that once you bring in black partners for empowerment purposes, you should perpetually be considered to be empowered, regardless of the exit of such black partners in the normal course of business transactions.

The proposed construction charter throws this provision out and requires that black ownership, once clinched, must be maintained. This is most progressive and will ensure that we get rid of the compliance tick box mentality where there is no genuine sense of change.

What surprises, though, is the lowering of the bar on expenditure on skills development to 3% of turnover from 6% — a cardinal mistake. Often, you hear corporations saying they can’t “find black people” to occupy crucial positions to meet employment equity targets. This tells me that more — not less — resources must be spent on skills development at a more rapid and intense pace in order to increase the levels of skills in the workforce.

Ironically, in the same charter, there is a renewed focus on partnerships and joint ventures between the established players and new entrants. Without serious skills investment by companies, there will never be enough competent new entrants for the big players to partner with.

I hope the Department of Trade and Industry wakes up from its policy slumber and refuses this climbdown by the construction sector. The department compromised drastically two years ago on a progressive move to reduce points on the broadbased BEE habits of big companies to hide behind staff schemes and related smokescreen-type empowerment arrangements.

The construction charter will put these kinds of arrangements to a test when it comes up for public comments, and may well be the catalyst for the department to revisit its lethargy in this area of BEE policy.

A lot of people I speak to are beginning to lose hope that the BEE Commission, which launched on a bad note with an acting head, will be able to give direction to different sectors about how to proceed on the issue of sector charters.

The construction charter was submitted in July and one wonders whether the delay in its approval by the department speaks to a lack of capacity to provide leadership in this important area of radical economic transformation or is it another example of poor political will?

Tabane is author of Let’s Talk Frankly and an anchor of Power Perspective on Power FM 98.7 Sundays to Thursdays at 9pm.