# Regulatory Compliance Category > BEE and Employment Equity Forum >  J Zuma on Black Economic Empowerment (BEE) Advisory Council meeting

## I Robot

President Zuma convenes third meeting of Black Economic  Empowerment (BEE) Advisory Council     

20 May 2010 

The Black Economic Empowerment (BEE) Advisory Council held its third meeting at the Union Buildings in Pretoria today, 20 May 2010. 

The Council, which was established in December 2009 in terms of the Broad-Based Black Economic Empowerment Act, is chaired by President Jacob Zuma. It held its inaugural meeting on 4 February 2010. 

In his opening remarks, President Zuma said much progress had been made in advancing black economic empowerment, but not enough. He said the Council would need to advise government on how to ensure it happens faster and benefits broader society. 

President Zuma said the Council would need to answer the question: âIn the South African context, where many people were excluded for centuries, how do we level the playing field?â 

âThis Council needs to look at what needs to happen in the economy,â he said. 

Minister of Trade and Industry Rob Davies said that many elements of the BBBEE Framework had been put in place, including sector charters, codes of good practice, and verification processes: âWe find ourselves at a moment when we need to assess the impact of that work.â 

âThere is a great deal of work that needs to be done to make empowerment a contributor to development and economic growth,â he said. 

One of the challenges that the council would need to advise on was the abuse of the empowerment process through practices like fronting. It would also need to look at the alignment of governmentâs preferential procurement policy with black economic empowerment. The Council also identified weaknesses in verification and accreditation procedures. 

Members of the Council emphasised the need to ensure that economic empowerment was indeed broad-based, and said that this consideration should be at the centre of the interventions that the Council would propose to government. 

The meeting adopted the councilâs constitution which outlines, among other things, the powers, functions and administration of the council. 

The meeting established four sub committees to address a number of key issues that are central to the work of the Council. These are: 

1. Ownership and structuring of BBBEE deals
2. Enterprise Development, Access to Finance and Procurement
3. Human Resource Development
4. Legislation, Charters, Compliance and Enforcement 

In the course of developing recommendations to the council, the sub-committees may co-opt experts and commission research as required. 

The sub committees will report to the next meeting of the council, which is due to be held in September 2010.

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## gac

It seems that at the high end of business empowerment deals ate steaming ahead quite nicely as evidenced by the amount of consumer spending on fancy cars, big houses and lavish lifestyles. However at the lower small business end of things I come across numerous PDI's obtaining contract awards and then running around the marketplace "trading" these pieces of paper because they dont have the finances or wherewithall to deliver on thise contracts. How they got those Cointracts in the 1st place is a topic for another discussion.

Problem is they want to participate but just have not reached that level of capacity. 9 out of 10 times where I have offered to assist I end up funding the deal but obviously it is a minefield one has to tread very carefully. 

Development Funding, such as that one would expect from the likes of Ithala Bank (KZN) is a joke as it takes too long for them to process applications and they are behaving like a commercial financial institution with their requirements.

So whats the solution? Well thats not an easy answer but its also not helping the cause to make so many awards to individuals who lack the capacity to deliver and end up failing to deliver AND in many cases I have come across, deliver at twice or thrice the price government could otherwise be procuring. It makes no sense to be hampering service delivery to the extent it is (i.e. non delivery and wastage of precious funds on expensive procurement) for the sake of promoting empowerment.

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## murdock

i believe they should sort out the fraud and corruption first...so that it frees huge amounts of money to make available for the goverment to run efficiently...maybe they should use sars to manage the funds...once they receive it...or should i rephrase that...they should use people in the collection side of sars to assist with the spending side of sars.

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## Justloadit

I think that very act of BEE is the contributing factor to the lack of development across the board.

It needs some simple planning, and of course a very watchful eye on the bribery and corruption front.

Create a simple social empowerment program, in the actual areas that need employment. 
Let me explain -  Why get a fancy big construction company to go and build thousands of RDP houses?
Will this fancy large organization employ thousands of people to do this task? Of course not, they are going to look at making the house as cheap as possible with automation to bring down each unit  cost to increase the profit margin.

What should rather be done, is go into the respective area, set up a small training center, using containers, and recruit and train the locals to manufacture bricks, plumbing, electrical, brick laying, plastering, carpentry and a some other trades required to build a house, then move on to another area. OK so the houses may be a bit skew when they start, but as they move to the next they will improve, They probably woould do a better job than the current contractors, according to the news, many of the houses have to be repaired at the same cost of the building.

Next, do not just deliver the materials to the site, they must be managed, the question is how to manage the materials with out the corruption. Actually it is quite simple, use a quota based system, in which each home owner is issued a book of tickets, which is the total steps to building the house. In this manner the home owner will become the inspector. He will solicit workers to work on his house by issuing the ticket when they complete a phase of the build to his satisfaction. Now you do not have to be a civil engineer to inspect the building as it grows. At specific points of the building process, an inspector must come round to verify that the work is done, again with the use of the ticket. The builders, will then take the ticket to a government department and collect the funds for that phase.

I know that there will be some corruption in the tickets system, but I have a manner to curb that, you link the whole system to a real time management project system, which I do not want to elaborate here, as this is where the control is, and has value.

Using a system like this, you automatically employ thousands of people with out spending too much, as the funds were already allocated for the RDP houses. AT the end of the project, you will have quite a few skilled people who can now do maintenance, and have the skills to do business.

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