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Siphelele Dludla | 12 June 2023 Minister of Women, Youth and Persons with Disabilities Nkosazana Dlamini-Zuma last week said B-BBEE laws needed to be transformational instead of transactional. File photo The government has committed to moving ahead and implementing revised Broad-Based Black Economic Empowerment (B-BBEE) legislation, in spite of pushback from some quarters. This comes as trade union Solidarity published an “Impact Study” detailing what would need to happen in South Africa’s economy to make the government’s new BEE targets a reality. Minister of Women, Youth and Persons with Disabilities Nkosazana Dlamini-Zuma last week said B-BBEE laws needed to be transformational instead of transactional. Dlamini-Zuma noted the importance of economic empowerment of black South Africans and encouraged large organisations to participate in sustainable B-BBEE initiatives. “Until the paradox of rich Africa, poor Africans is resolved, there will be more, not less, broad-based black economic empowerment,” she said. “The relatively peaceful transition to democracy is generally lauded as a major victory in the struggle for racial equality and an exemplary post-conflict transition towards a disaggregated society.” Dlamini Zuma was speaking in Johannesburg during a ministerial discussion at the Deloitte Sustainability Summit Africa on the importance of sustainable B-BBEE implementation by the private sector. BEE Chamber chief support officer Yuneal Padayachy emphasised that the principal objectives of B-BBEE are to promote economic transformation and enable meaningful participation of black people in the South African economy. Padayachy said they were trying to put across the message of a move away from transactional towards transformational BEE, as well as changing the mindsets of individuals about BEE. “When you think about transformation in South Africa, a lot of people have this misconception that it’s taking from one and giving to the other, corrupt activities and so on,” he said. “It’s not about that. It’s about how best you can bring black people into the economy in a sustainable manner.” A number of stakeholders who participated in the discussions decried how BEE was still being used as a “tick-box exercise” that never materialised in any meaningful transformation. Nomaswazi Shabangu, president of the SA Women Lawyers Association (Sawla), said women were at the bottom of the food chain when it came to empowerment opportunities. Shabangu said their commitment as Sawla was to advance the transformation agenda and push for gender equality for women in the legal fraternity. “Unfortunately, we are still facing challenges that our women faced 100 years ago. Women lawyers are still faced with skewed briefing patterns. Even in the Constitutional Court, how many times have we seen women representing our government or the corporate sector? It’s only men,” Shabangu said. “We’ve got a development fund that we have established to train women so they can compete in all spheres of the law. However, we don’t have money. We also depend on [donor] funding.” AgriBEE Charter Council deputy chairperson Ndivhuho Phungo said businesses had to embrace a radical shift and change their mindset when it came to BEE’s transformational goals. “We have come to realise that although compliance comes at a cost to measured entities and those that participate, there is more value to be derived from complying with BEE that far outweighs the cost involved. And businesses are warming up to this,” Phungo said. “Some businesses have attested to the fact that now their incomes have tripled, sometimes quadrupled. You have today a whole new industry of beneficiation agencies, of auditors, just to audit BEE. So there is a lot of job creation that came with this thing.” Meanwhile, B-BBEE was last week identified as one of South Africa’s anti-growth strategies by the independent policy research organisation Centre for Development and Enterprise (CDE). CDE executive director Ann Bernstein said B-BBEE and localisation were two government policies that have inhibited growth, though they were aimed at economic transformation. “Products designated for local procurement are generally more expensive or of a lower quality relative to possible imports (which is why local products are not chosen on their own merits), while BBBEE has raised the costs of doing business and introduced new uncertainties that affect investment plans,” she said. ‘Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER’. https://www.iol.co.za/business-report/economy/sa-committed-to-revised-bee-targets-despite-pushback-from-business-37e9c25e-6fa9-45a0-ba8f-0f892622a9a3

Staff Writer | 9 June 2023 Trade union Solidarity has published an “Impact Study” detailing what would need to happen in South Africa’s economy to make the government’s new BEE targets a reality. The study is in response to the Department of Employment and Labour’s proposed sectoral targets for employment equity, which aims to push all designated businesses in South Africa to transform their employee makeup to be demographically representative. Designated businesses are all those that employ 50 or more workers in the country. The minister has been empowered to set the targets through the new Employment Equity Amendment Act, which was assented to by President Cyril Ramaphosa in April. The Act is not yet in effect, with the department expecting to promulgate the laws in September. Failure to meet the targets could result in hefty penalties, including millions of rands in fines. Despite not yet being in effect, the laws and proposed targets have drawn the ire of business organisations and unions like Solidarity, which have warned that the measures will effectively force businesses to implement racial quotas. The government has argued that the targets are not quotas, because they are flexible, only have to be met over a five-year period, and are open to exemptions based on various reasoning. However, groups like Solidarity say that there is no other way to interpret the new laws – simply because the reality of South Africa’s job landscape and dwindling economy make it impossible for any business to meet them in a natural way. Two options to meet the targets According to Solidarity, there are only two ways businesses can meet the targets: either they have to expand and grow so that new hires can build up the employee profile to match the targets, or they have to find another way to replace the employees they currently have with the required racial groups to meet them. For example, looking at a national company operating in the agriculture sector, a company would have to adjust its skilled employee base so that it is made up of: 68% black workers 8% coloured workers 2% Indian workers 8% white workers (The remaining 14% is not accounted for in the new regulations, which is another huge problem legal experts have identified) According to the Department of Labour, the current makeup for this sector is 51% black, 18% coloured, 2% Indian and 26% white (3% unaccounted for). To ensure the targets are represented, a company of 100 people would have to grow to 325 people – growing by 225%. It would have to hire five Indian workers, eight coloured workers and 170 black employees to match the targets (an additional 45 workers would be present to account for the fact the target figures don’t add up). In South Africa’s economic environment – excluding all the other pitfalls, red tape, and anti-business legislation in effect – such growth for any business over a period of five years is highly unlikely, Solidarity said. This leaves option two: lean into following rigid racial quotas with the employee base you have. Instead of hiring workers, it’s far easier for a business to simply get rid of their white and coloured employees and replace them with black workers. Following this method would be unlawful, legal experts warn. Meeting the targets by replacing the workforce Hitting all sectors While the example above is a rudimentary assessment of one category in one sector, Solidarity’s Impact Study looked at and extrapolated the targets across all sectors. The union said that huge – and impossible – levels of growth are required across every sector in every skill category to make the growth option viable for businesses in the country. The table below outlines the growth requirements just for the skilled workforce (which represents the bulk of hires). “Given South Africa’s enormous economic challenges, it already is tough for a sector to basically achieve any growth at all.” “Expecting sustained double-digit growth is exceedingly unrealistic, and expecting sectors to more than double over the next five years is nothing but wishful thinking. For virtually all sectors, it is impossible at this level to grow into the ministerial targets without people having to vacate their posts,” it said. Underpinning the entire study, however, is the macroeconomic reality. As South Africa grapples with a possible full year recession, the required levels of economic growth to make the employment targets work is unimaginable. According to Solidarity, the country would need to hit 11% growth per annum is an absolute minimum requirement to hit the targets, with the more realistic growth figure per annum closer to 25% per annum. South Africa’s GDP over the past ten years has struggled to achieve growth of more than 1%. “It, therefore, is painfully obvious that it is impossible for the national economy, as well as for individual sectors, to grow into the minister’s targets,” it said. Instead, it appears the only option left to businesses is to replace their workforces, which would result in massive job losses for racial groups other than black South Africans. Solidarity said that analysis shows that the targets are completely detached from reality, and has sent warnings and formal messages to the department to this effect. Meanwhile, legal challenges to the new laws and targets loom large, as business groups start organising to push back against them. ‘Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER’. https://businesstech.co.za/news/business-opinion/695017/south-africas-new-bee-targets-the-massive-dilemma-for-businesses/

SA News | 9 June 2023 To contribute to the expansion of the wildlife economy, the South African National Parks (SANParks) will donate 2 448 plains game and 12 high value species to emerging game farmers in the coming year. This will be done through the SANParks Socio-Economic Transformation Action Plan, which aims to support greater participation of black-owned businesses, especially women, youth and people with disabilities, in infrastructure development and commercial tourism opportunities. This is according to the Minister of Forestry, Fisheries and the Environment, Barbara Creecy, who delivered the department’s Budget Vote in the National Council of Provinces (NCOP) on Thursday. Other focus areas include supplier development; direct and indirect employment creation; awareness, knowledge creation and exchange, and meaningful land claimant beneficiation. “In additional initiatives to address visitor safety and combat marine and terrestrial wildlife crime in all our national parks, SANParks has deployed the Sea-Air-Mountain Team in Table Mountain National Park to address safety concerns, wildlife crime, and search and rescue. It is also in the final consultation phase of the Baboon Management Plan for the Western Cape. “Through the development of SANParks Vision 2040, all South Africans can participate in the re-imagining and co-creating of a new future for conservation in and through national protected areas. “The focus here is on co-creating the future with diverse stakeholders, where youth, in particular, will play a significant role as custodians of that future. Given that SANParks will celebrate a century of existence in 2026, the development of Vision 2040 is a great opportunity to re-calibrate its future,” the Minister said. SANParks will also undertake a strategic review of all programmes in line with the recommendations of the High Level Panel. “In this regard, the process of re-imagining protected areas, in close collaboration with the department, commenced and new models of both expansion of national parks and establishment of new national parks are being explored. “This includes different models of ownership, linkages through corridors with compatible land uses, integration with provincial and private conservation areas and strengthening co-management,” Creecy said. iSimangaliso Following the release last year of the Panel Review Report on the artificial breaching of the St Lucia Estuary in January 2021, the iSimangaliso Wetland Park management has taken a number of steps to address back flooding and the clearing of invasive species. In 2022, the Minister made a commitment that St Lucia Lake, which is protected and managed by the iSimangaliso Wetland Park Authority, will no longer be managed as an isolated system, which ignores surrounding stakeholders. “I am pleased to report that from my engagements in March this year, relations between the Park Management and the surrounding stakeholders have considerably improved. “Last year, iSimangaliso received R340 million from government for infrastructure projects, including road construction; the finalisation of the office block; new staff quarters for field rangers and the development of new lodges in the park as part of its commercialisation drive. “These projects contribute to job creation and socio-economic improvement in an economically depressed area, where the park represents the only major economic development opportunity for adjacent communities,” the Minister said. Through the infrastructure and environmental management projects, the park has created around 5 000 work opportunities in the past year. More funding will be allocated this year to fund biodiversity conservation projects, while addressing unemployment, poverty and inequality in the area. “iSimangaliso management is also working closely with municipalities in the implementation of the District Development Model by introducing environmentally friendly projects through municipal cleaning and greening programmes,” the Minister said. Addressing unemployment rate In the past year, the South African National Biodiversity Institute (SANBI) has successfully implemented its Biodiversity Human Capital Development Strategy to address the high unemployment rate amongst young people. This is being done through the Groen Sebenza Graduate Programme, post-graduate studentships, work integrated learning and internship programmes. “In the past year, SANBI has employed 1 653 people in its ecological infrastructure programme to clear 5 137 hectares of land. A total of 96% of the 442 Eco Champs employed were youth, while 87% of the 911 people employed in zoos and gardens in eight provinces were young people, and 57% women. A total of 758 rural careers were established and 206 research assistants employed,” the Minister said. – SAnews.gov.za ‘Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER’. https://www.sanews.gov.za/south-africa/sanparks-donate-game-emerging-farmers

Agri SA - Department of Water and Sanitation | 9 June 2023 Agri SA in a media statement issued on 1 June says focusing solely on ownership, to the exclusion of all other relevant factors, will mean the loss - or partial loss - of water resources for numerous currently viable commercial farming enterprises. AGRICULTURE NEWS - Agri SA says the race quotas required by the draft amendments to the regulations pertaining to water use license applications would have devastating consequences for food security and the sustainability of the agricultural sector if they are passed in their current form. According to the Department of Water and Sanitation's (DWS) draft regulations, certain enterprises applying for water use licenses to take or store water, will in the future have to allocate shares of up to 75% to black South Africans in order for such water use licenses to be granted. Agri SA in a media statement issued on 1 June says focusing solely on ownership, to the exclusion of all other relevant factors, will mean the loss - or partial loss - of water resources for numerous currently viable commercial farming enterprises. Similar requirements are also prescribed in the draft with respect to so-called 'stream flow reduction activities', essentially commercial forestry plantations. The regulations also make provision for hydraulic fracturing, which is a further risk and threat to food security, says AgriSA. The prescribed minimum black South African shareholding requirements of 25%, 50%, or 75%, required for a water use license to succeed depends on the volume of water abstracted or stored, or the area covered (in the case of commercial forest plantations). "The proposed regulations are seen as the DWS’s most radical and sweeping effort to date toward changing the demographics with respect to water use in South Africa. The agricultural and forestry sectors appear to be the primary target of the proposed regulations. The agricultural sector accounts for approximately 60% of South Africa’s total water use. It is worth noting that the proposed regulations exempt mining companies, the state and state-owned entities, as well as 100% black-owned entities. “Agri SA is of the view that the proposed regulations will have a devastating effect on South Africa’s commercial agricultural sector if adopted in their current form,” says Janse Rabie, legal and policy executive at Agri SA. “It is well known that the DWS envisages compulsory licensing of existing lawful water uses in the near future - a fact which is emphasised by regulation 13 of the proposed regulations. By far the greatest number of agricultural water uses are exercised in terms of historic existing lawful water uses.” Concerningly, the draft regulations would seem to be attempting to replace the current suite of considerations which apply to granting water licenses with ownership demographics. In terms of section 27 of the National Water Act, the DWS must take all relevant factors into account when issuing a water use license. This already includes the need to redress the results of past racial and gender discrimination. “Section 27 of the National Water Act however also contains at least 10 other considerations that the DWS - as being the responsible authority for granting water use licenses - needs to consider before granting any application for a water use license. What the proposed regulations seek to achieve is to make BBBEE the sole consideration for granting licenses,” says Rabie. The Supreme Court of Appeal dealt with this issue in 2012 in a matter supported at the time by Agri SA. “In the so-called Goede Wellington case, the SCA specifically stated that all the relevant factors contained in section 27 of the National Water Act had to be considered together in deciding whether to grant an application for a water use license. These include factors such as efficient and beneficial use of water in the public interest, socio-economic impact, and investments already made by a water user in respect of the water use in question.” These considerations remain important and are especially so when considering the foundational role played by the sector in terms of food security, employment as well as the very significant headwinds farmers are currently facing. Water is the most vital input for the sector and if farmers lose the lawful use of this input, the impact will be catastrophic. Agri SA acknowledges that water belongs to all South Africa’s people and fully appreciates the importance of achieving an inclusive and fairly representative agricultural sector in our country. “The consequences that the draft regulations in their current form will have with respect to agriculture and food production in South Africa, will be fatal as it will essentially force the transfer of ownership of the ability to lawfully use water, commercial agriculture’s most crucial input factor,” says Rabie. Concerningly, these regulations are also unlikely to achieve the goal of further transformation in the sector. Achieving this will require creating an environment which is conducive to growth and investment in the sector, and which provides meaningful support for new entrants. By contrast, Rabie stresses that this effort by government cannot have come at a worse time for the sector and the economy, which is already reeling from the impact of load shedding, rural crime and deteriorating public infrastructure. The commentary period on the proposed revision of regulations regarding the Procedural Requirements for Water Use Licence Applications and Amendments will expire on 18 July 2023. 'Equitable allocation of water use' DWS says in a 5 June statement the purpose of the amendments is to effect reforms in relation to "equitable allocation of water use", as well as to amend the procedural requirements related to applications of new water use licences, including reviewing of timeframes and fees linked to licence application processes, according to the department. The department says the National Water Act (NWA), no 36 of 1998 "recognises that water is a natural resource that belongs to all people and should be allocated to all users equitably". "Section 3 of the Act provides for the Minister of Water and Sanitation, as the public trustee of the country's water resources, to ensure that water is protected, used, developed, conserved, managed and controlled in a sustainable and equitable manner, for the benefit of all persons and in accordance with its constitutional mandate. The minister is responsible for ensuring that water is allocated equitably and used beneficially in the public interest, while promoting environmental values." Catchments in deficit The department says South Africa is among the 30 driest countries in the world with limited water resources, and the majority of the catchments are in deficit (water requirements exceed the yields). It is estimated that 98% of South Africa's water resources were already allocated by 2004, of which the majority of allocations are through the recognition of old water use entitlements (what is termed Existing Lawful Water Use (ELWU)). "Comparative statistics drawn from issued water use licences to historically advantaged individuals (HAI) and historically disadvantaged individuals (HDIs) since 1998 indicate that a total of 412 million cubic metres (m3) of water have been allocated amongst the two groups. Of the 412 million m3, 313 million m3 (75.93 %) have been allocated to historically advantaged individuals (HAI), whilst a modest 99 million m3 (24.07 %) have been allocated to Historically Disadvantaged Individuals (HDIs). The same analysis for water allocated by means of Existing Lawful Water Use (ELU) shows that a total of 5.83 bn m3 of water is allocated, where 5.74 bn m3 (98.54 %) are allocated to HAIs and only 90 million (1.46 %) to HDIs. These statistics indicate that water allocations remain highly skewed towards the HAI group. Hence the department should make efforts to improve this situation." Abstraction thresholds against black ownership The department says the revised regulations have introduced proposed thresholds of abstraction volumes of water against the level of black ownership in applications submitted for new water use allocations. "This is done to ensure that there is transformation of water use allocations, to address the disparities in access to water use from Apartheid. Interested and affected stakeholders are encouraged to make constructive proposals on this critical mandate of the Department." The draft regulations also include amendments to water use licencing fees. The proposed fees of different licences take into account the complexities associated with the administrative processing of these licences, resources required, and the accelerated approach in line with the reduced period, according to the department. ‘Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER’. https://www.oudtshoorncourant.com/News/Article/General/race-quotas-for-water-use-licences-would-be-fatal-202306081206

Kizito Okechukwu | 9 June 2023 African Bank top five winners receiving a grant of R200 000 each. Last year, African Bank embarked on a journey in partnership with 22 On Sloane to support 20 SMEs every year with capacity building programmes. Photo: Supplied If one speaks to entrepreneurs that have scaled their businesses amid the challenges they faced when starting, one of the biggest stumbling blocks most will mention will be lack of access to capital. In-depth research has also shown that many businesses fail due to little or no access to capital and effective capacity building programmes. Capacity building for small and medium-sized enterprises (SMEs) basically means putting together measures that will assist them to grow their business, which could include, but not limited to, operational soundness, financial management, talent management and building a strong management team. Through capacity building, SMEs are more prepared to access various markets that they would not have necessarily accessed and also enjoy the support to access the financial capital that they may need to stabilise and scale their business. The story of how African Bank started is a story of how most, if not all, businesses started. The history of a few black businessmen who felt that other banks did not serve their business needs joined forces and put some money together to start a bank. Yet this collaboration could not raise the R1 million that was needed to start a bank in 1964. However, they fought hard and long and, a decade later, managed to raise the funds required. This is the major challenge of every business. Even the likes of Airbnb shared a story of how no one believed in them back in Silicon Valley because investors couldn’t buy into their concept that homeowners would allow a total stranger to stay in their homes. How wrong they were. Today, Airbnb has transformed the accommodation industry more than one would ever have imagined. As entrepreneurs, it’s all about the audacity to believe that anything is possible. As co-founder of Netflix, Marc Randolph, once said, “No one really fully knows if an idea will work till it’s put out there and tested”. Last year, African Bank embarked on a journey in partnership with 22 On Sloane to support 20 SMEs every year with capacity building programmes. These SMEs will have the opportunity to access African Bank’s supply chain and network. The programme includes intense mentoring and coaching and the opportunity for the SMEs to pitch their business to the Bank’s supply chain and executives. From the 20, five businesses came out tops, and earlier this week, they were awarded R200 000 each for their business. The Bank is now working on ways to potentially integrate them into their business. As Edna Montse, the African Bank Executive for Transformation and Sustainability said: “Building entrepreneurs is not an easy task. In most developing economies, SMEs are the engine of the economy. The reality is that it’s a lonely journey for most SMEs, and giving them the support to continue growing and having corporates also chip in on their journey gives them the audacity to keep believing that anything is possible.” The private and public sectors must continue supporting SMEs through effective capacity building programmes while also ensuring they have access to capital. ‘Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER’. https://www.iol.co.za/business-report/entrepreneurs/building-entrepreneurs-by-seed-funding-their-business-86bfe82b-4862-46c3-8bb9-4c66e6e1dfed

Ben Bierman | 9 June 2023 Failing to nurture and retain the right kind of talent also has substantial cost implications for small businesses, says the author. Photo: Pixabay The onset of the pandemic brought matters relating to employee health and wellness into stark focus. Employers were greatly impacted when their team members suffered from burnout, experienced high levels of stress and were absent from work due to physical or mental health issues. The ripple effect that these realities had on productivity and, ultimately, profitability highlighted the importance of ensuring that their employees were afforded a workplace that provided them with support, work-life balance and a culture of recognition. An investment in people is an investment in your small business’ future success. In the recent Business Partners Limited Q4 2022 SME Index, South African small business owners reported feeling only 64% confident that they would be able to find staff with the right skills and experience – a 6% decrease from the previous quarter's survey. This represents a significant challenge for the future prospects of many small businesses whose long-term growth relies heavily on the proficiency of their staff. Failing to nurture and retain the right kind of talent also has substantial cost implications for small businesses. The cost of acquiring and on-boarding a new team member is infinitely greater than the cost of retaining employees. One global study found that every time an employee resigns, the hiring process involved with replacing them is at least half of that employee’s annual salary. Holding onto the right talent and fostering a workplace culture that is conducive to job satisfaction and fulfilment is, therefore, in the best interests of businesses of all sizes. As a business owner, investing in the people who are the pillars of your success should be a top priority. Not only is there value in attracting the right people, but the benefits of encouraging staff to reach their full potential can be one of the most effective ways of gaining a competitive advantage. These are three key ways in which you can provide better support for your invaluable team members: Keep an eye on company culture In research conducted by Remchannel in 2022, it was found that for 53% of employees leaving their jobs, two of the three main reasons for doing so were related to a toxic working environment. In a small business, where business owners have to fulfil several roles, owners are often removed from what is happening on the ground. But making time to engage with employees, hear their concerns, consider their feedback and pay attention to the culture in which they work could help reduce staff turnover. Business owners should also be aware of what the signs of a toxic work culture are. Some red flags include micro-management, disregard for the work/life balance of employees, lack of career support and ineffective management, all of which should be addressed as a matter of urgency. Provide opportunities for growth and enrichment Employees who are encouraged to grow professionally and expand their abilities often feel more fulfilled and become more willing to go the extra mile within their roles. For this reason, investing in training and development opportunities for staff is one way of demonstrating your commitment to helping them reach their career goals. In a small business, where the budget for training may be limited, business owners could consider hosting workshops, speaker sessions, knowledge-sharing presentations, opting for free online courses, approaching a Sector Education and Training Authority (Seta) for assistance and providing written resources. Reward employees for their efforts Incentivising staff for a job well done and finding ways to recognise them for their individual talents and efforts is a great way to build a more engaged workforce. While monetary rewards are undoubtedly the most popular form of recognition, there are also several non-monetary options that are just as effective. Rewards could take the form of time off, public recognition and office perks. However, one of the most valued forms of reward is a simple acknowledgement to let employees know that their efforts are not going unnoticed. Here, the expression that “it’s the thought that counts” could not be more apt. Ben Bierman is the Managing Director of Business Partners. ‘Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER’. https://www.iol.co.za/business-report/entrepreneurs/business-101-advice-for-small-business-owners-investing-in-your-employees-is-key-to-your-success-3a47a4fa-853e-48bf-bd4d-117a59bc6e12

Nompilo Zulu | 7 June 2023 Trade union Solidarity has declared its intention to contest the proposed amendments to the Employment Equity Act. The organisation announced on Tuesday that it signed a resolution alongside 30 other organisations and political parties including the DA, Freedom Front Plus, and ActionSA committing to a legal challenge. The amended act, which received President Cyril Ramaphosa’s approval on April 14, incorporates section 15A that grants the employment and labour minister authority to establish numerical targets for sectors or sub-sectors in consultation with relevant sectors and the advice of the Commission for Employment Equity. According to government, the targets aim to ensure equitable representation of qualified individuals from designated groups across all levels of employment. The accompanying regulations to the act outline five-year sector targets for population groups, gender, and employees with disabilities in the top four occupational levels. The act also introduces provisions for the minister to issue certificates of compliance and addresses associated matters. Solidarity said it has conducted research on the potential impact of the proposed amendments and argues that they could have detrimental effect on the job market. The union’s study suggests that the amendments may result in the displacement of numerous minority workers from their current positions. Additionally, Solidarity claims government’s approach to drafting the legislation lacks careful consideration, citing evidence to support its concerns. “The government’s political games will cause a bloodbath in the labour market. It poses a threat to the country’s economy and to the wellbeing of South African citizens. Civil society realises this too,” said Dirk Hermann, Solidarity’s chief executive. “It is for this reason that we have gathered at this workshop. It shows that South Africans from across the spectrum will not tolerate such absurdities and that we are all prepared to put up a fight against the government’s abuses. “Today we made history. It was one of the largest gatherings of political parties and civic organisations to date. Everyone who was present shares the conviction that we have to take decisive action against the abuse from the government. “It was decided from within the workshop ranks that every organisation and party will from here on continue to oppose this race law, and we have signed a joint resolution in which we commit ourselves to this. DA leader John Steenhuisen said his party will approach the high court in Pretoria to declare various sections of the act unconstitutional and invalid, including the controversial section 15A. “In our submission, the DA will demonstrate that the term ‘numerical targets’ used by the act is a misnomer and that, in reality, the act sets rigid racial quotas for four different job levels across 18 economic sectors,” said Steenhuisen. “The act empowers the minister to determine quotas that specify the particular demographic composition that designated employers must achieve, on pain of severe penalties – including the inability to do business with the state, the cancellation of existing state contracts, compelling orders, and fines. “These quotas amount to job reservation based on race on a scale last seen before 1994.” He asserts that the act infringes upon constitutional rights such as equality, freedom of trade, occupation, and profession. Furthermore, he argues that the act contradicts the original Employment Equity Act’s prohibition on quotas. According to Steenhuisen, this represents an unconstitutional and risky escalation of what he referred to as the ANC’s race-based social engineering efforts. “It provides no flexibility to employers to determine what is feasible in their own business environment, instead centralising power in the hands of one minister to dictate the racial composition of workplaces across the country. “In some provinces and sectors, it sets the quota for coloured and Indian South Africans at 0.0% and 0.1%. In other cases, such as in the Northern Cape, companies would be in violation of the law if they employ ‘too many’ black women. “This approach is at odds with the basic economic reality that different employers in a particular sector have different employment needs and face different labour markets. One employer might need electricians, another might require coders. Another fitters and turners. “But section 15A of the act would permit the minister to lump all of these employers together and force them to hire the same specified ratios of various race combinations.” The DA leader explained further: “We cannot allow this draconian and race-based legislation to stand. It will not only directly lead to mass job losses, but will also accelerate capital and skills flight at a time when our economy is already in a deep crisis brought about by loadshedding and economic mismanagement. “Ultimately, all South Africans will suffer as unemployment and poverty grows beyond already catastrophic levels.” The public has been granted a five-day period to provide feedback on the Draft Employment Equity (EE) Regulations 2023, which pertain to the proposed establishment of sector-specific EE targets. The deadline for submitting comments is June 12. ‘Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER’. https://sundayworld.co.za/news/politics/parties-join-hands-against-amendments-to-employment-equity-act/

Sheree Bega | 8 June 2023 South Africa’s biggest federation of agricultural organisations, Agri-SA, has said that new draft regulations introducing racial quotas for water use licences place the country’s “tenuous food security at further risk”. The draft regulations require farmers to have 25% to 75% black shareholding for their applications to succeed. They were published for public comment by Water and Sanitation Minister Senzo Mchunu on 19 May, under the National Water Act. The prescribed minimum black South African shareholding requirements of 25%, 50% or 75% for a water use licence to succeed depends on the volume of water abstracted or stored, or the area covered, in the case of commercial forest plantations. Farmers who draw 250 000 to 500 000 cubic metres of water require 25% of black shareholding for their water use licence to be granted, while 50% black shareholding is stipulated to use more than 500 000 cubic metres. To draw more than a million cubic metres of water, 75% black shareholding is required. Fatal consequences Agri-SA legal and policy executive, Jansie Rabie, said while the federation fully appreciates the importance of achieving an inclusive and fairly representative agricultural sector, “the consequences that the draft regulations in their current form will have with respect to agriculture and food production in South Africa will be fatal, as it will essentially force the transfer of ownership of the ability to lawfully use water, commercial agriculture’s most crucial input factor.” Focusing solely on ownership, to the exclusion of all other relevant factors, will “mean the loss, or partial loss, of water resources for numerous currently viable commercial farming enterprises”. The department of water and sanitation has stood by its proposed new rules, saying there is a need to “ensure that there is transformation of water use allocations to address the disparities in access to water use from apartheid”. Massive investments Theo de Jager, chairperson of the board of the Southern African Agri Initiative, an agricultural interest network for farmers, said: “A dam costs you millions. Very often, a dam on the farm is more expensive than the farm itself. Many farmers invested in water storage facilities, but they still owe millions on it, every year they must pay off the loans for that.” It is unclear whether the proposed regulations would mean that the black shareholders will also have to share in the debt that has been incurred on the storage of the water. It’s the same for the irrigation equipment, he said. “The pivot on irrigation land is much more expensive than the land itself. The value is in the fact that you can put water on that land. Now the water will have a different shareholding. Farmers, if they knew this, would probably not have invested in the equipment.” De Jager farms with avocados and macadamias and uses about 5 000 cubic litres of water per hectare a year, “which means that if I have more than 30ha of irrigated orchards, I will be forced to have a partner. But to farm with less than that actually makes me a smallholder farmer. We’re smallholders unless we’re prepared to be forced into a partnership”. Most farmers in the commercial sector are family-owned businesses. “It’s a family farm. You inherit it from your dad, who inherited it from his dad, and you invest in it actually for the sake of your children. How do you BEE [black economic empowerment] a family?” ‘Devastating for the future’ Bennie van Zyl, general manager at commercial farmers union TLU SA, denounced the proposed regulations as “devastating for the future” and the most “short-sighted suggestion and proposal I’ve seen from any government in my life in the world”. “This is not the way to do things so this government should go and rethink what they want South Africa to be when they’re finished with it,” he said. “I think we’ve come to a point in South Africa where the big question that now should be asked is, do we want to eat, do we want food on our tables?” The government’s policy of transformation and how it is applied is “an ideological approach and it should be an economical approach”. What concerns Van Zyl is “that we have a government that doesn’t understand the economics of success, they don’t understand the market forces …. If you don’t make a profit, you’ll go out of business. “Who on earth can BEE in a family farm? Ninety-five percent of our farms are family farms. I’m a farmer, with my son, with my family, now I have to give ownership to someone else? It cannot work like that; it cannot be sustainable and it’s not for the benefit of the country.” De Jager says the government faces a difficult election next year and “I think [the proposed regulations are] a blind populist move, something they will do to appease the rural voters”. “Most of the cities have slipped out of the hands of the ruling party, their strongholds are really the deep rural areas, where the poorest of the poor people in South Africa live, and us, the farmers. And by doing something like this, they appease that part of the voter’s base but they haven’t thought through the process and the consequences.” About 25% of total production of staple foods such as grain, wheat and maize and sunflowers for cooking oil, comes from irrigation. “It is the certain part of our production. The rest is rain-fed — that is the uncertain part of our production.” Most of the jobs in agriculture are on irrigated land. “There’s no way you can do something like this without shaking the very foundations of our capacity to create jobs and to maintain jobs. And, in agriculture we create the jobs where we need it most — in the deep rural areas … for that portion of the population that will not find jobs elsewhere.” Redress The department said that among the purposes of the amendments is to effect reforms in relation to equitable allocation of water use. The National Water Act recognises that water is a natural resource that belongs to all people and should be allocated to all users equitably. South Africa is among the 30 driest countries in the world with limited water resources, and the majority of the catchments are in deficit. It is estimated that 98% of water resources were already allocated by 2004, of which most allocations are through the recognition of old water use entitlements. Comparative statistics drawn from issued water use licences to historically advantaged individuals and historically disadvantaged individuals since 1998 indicate that a total of 412  million cubic metres of water has been allocated among the two groups, it said. Highly skewed Of the 412 million cubic metres of water, 313  million cubic metres (75.93%) has been allocated to white people, while a “modest” 99  million cubic metres (24.07%) has been allocated to black people, the department said. The same analysis for water allocated by means of existing lawful water use shows that a total of 5.83  billion cubic metres of water is allocated, where 5.74  billion cubic metres (98.54%) is allocated to white people and only 90 million cubic metres (1.46%) to black people. “These statistics indicate that water allocations remain highly skewed towards the historically advantaged individual group. Hence, the department should make efforts to improve this situation,” the department said. The revised regulations have introduced proposed thresholds of abstraction volumes of water against the level of black ownership in applications submitted for new water use allocations. “This is done to ensure that there is transformation of water use allocations, to address the disparities in access to water use from apartheid.” Sandile Ndlungwane, the African Farmers’ Association of South Africa’s North West executive, told Farmer’s Weekly that his organisation supported the idea behind the proposal. “We seriously need water reform in the country, as most of the water allocated to the agriculture sector is allocated to white farmers,” he said. “I don’t think the intention is to take existing water rights away, but rather to ensure that the remaining water and new water that becomes available as new dams are built go towards transformation.” Radical, sweeping Marais de Vaal, AfriForum’s adviser for environmental affairs, said the government has a constitutional duty to manage and protect the country’s water resources in a sustainable manner. “While South Africa is a water-scarce country, water infrastructure is crumbling across the country and we are heading for a crisis. Transformation is being used as a smokescreen behind which the [department of water and sanitation’s] failures hide.” Agri-SA said the proposed regulations are seen as the department’s most “radical and sweeping effort to date” toward changing the demographics with respect to water use in the country, with the agricultural and forestry sectors appearing to be the “primary target”. The agricultural sector accounts for about 60% of South Africa’s total water use and the proposed regulations exempt mining companies, the state and state-owned entities, as well as 100% black-owned entities. “What the proposed regulations seek to achieve is to make BBBEE [broad-based black economic empowerment] the sole consideration for granting licences,” Rabie said, noting how water is the “most vital input for the sector” and if farmers lose the lawful use of this input, “the impact will be catastrophic”. The proposed regulations are open for public comment until 18 July. ‘Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER’. https://mg.co.za/news/2023-06-08-race-based-water-licence-allocations-draw-ire-of-farmers/

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Staff Writer | 6 June 2023 Draft regulations that will determine access to water based on skin colour will have a catastrophic impact on food security and employment in the agricultural sector in South Africa. This is the warning from Agri SA in response to the proposed water licensing regulations gazetted by the Department of Water and Sanitation (DWS) in May 2023. According to the draft regulations, certain enterprises applying for water use licenses to take or store water will, in the future, have to allocate shares of up to 75% to black South Africans for such water use licenses to be granted. According to the department, this consideration is to achieve equity and redress past racial discrimination. The prescribed minimum black South African shareholding requirements of 25%, 50%, or 75% required for a water use license to succeed depends on the volume of water abstracted or stored or the area covered. The shareholding requirements are given in the table below, as outlined by the department. The proposed regulations also exempt mining companies, the state and state-owned entities, and 100% black-owned entities. According to the draft, “the responsible authority may, subject to the availability of water resources, support black people with water licences before a final decision is reached on their applications.” The proposed regulations are seen as the DWS’ most radical and sweeping effort to date toward changing the demographics concerning water use in South Africa, said Agri SA. It noted that the agricultural and forestry sectors appear to be the primary target of the proposed regulations, accounting for approximately 60% of South Africa’s total water use. According to the organisation, the consequences for food security and the sustainability of the agricultural sector should these regulations be passed in the current form cannot be understated. “They would have a devastating impact on the sector and its ability to provide the country with a secure food supply. “This is because focussing solely on ownership, to the exclusion of all other relevant factors, will mean the loss (or partial loss) of water resources for numerous currently viable commercial farming enterprises,” it added. Concerningly, the draft regulations would seem to be attempting to replace the current suite of considerations which apply to granting water licenses with ownership demographics. Regarding section 27 of the National Water Act, the DWS must consider all relevant factors when issuing a water use license. This already includes the need to redress the results of past racial and gender discrimination, noted the organisation. Legal and policy executive at Agri SA, Janse Rabie, explained that Section 27 of the National Water Act contains at least ten other considerations that the DWS (the responsible authority for granting water use licenses) must consider before granting any application for a water use license. “What the proposed regulations seek to achieve is to make BBBEE the sole consideration for granting licenses, essentially forcing the transfer of ownership of the ability to use water lawfully,” he said. Furthermore, he noted that these regulations are also unlikely to achieve the goal of further transformation in the sector and would threaten the employment of 800,000 South Africans. “Achieving transformation will require creating an environment conducive to growth and investment in the sector, providing meaningful support for new entrants. This will encourage the opposite,” he said. Rabie stressed that this effort by the government could not have come at a worse time for the sector and the economy, which is already reeling from the impact of load shedding, rural crime and deteriorating public infrastructure. These considerations remain important and are especially so when considering the sector’s foundational role in food security and employment, as well as the very significant headwinds farmers are currently facing. “Water is the most vital input for the sector, and if farmers lose the lawful use of this input, the impact will be catastrophic,” said Rabie. ‘Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER’. https://businesstech.co.za/news/government/693843/farmers-sound-the-alarm-on-race-quotas-for-water-in-south-africa/

Neesa Moodley | 5 June 2023 The broad-based black economic empowerment transaction involves 7% of the total Absa Group shareholding, comprising 3% for South African staff and 4% for black participants in selected CSI programmes. Shareholders approved Absa’s R10-billion broad-based black economic empowerment (B-BBEE) deal at an extraordinary general meeting last week, paving the way for black ownership of the bank to push the 25% envelope. The deal value (R11.2-billion in April this year) highlights how the bank’s share price has fallen over the past three months, plummeting 21% from a high of R199.50 on 6 March to close at R158.23 on Monday. Hopefully, the price will pick up by the time employees and participants in Absa’s corporate social investment programmes become shareholders. The deal is structured so that employees in other countries where Absa has a presence will have the opportunity to participate through cash-settled plans, subject to local approvals. Half of the transaction will be for the benefit of participants in corporate social investment (CSI) programmes. Group chief executive Arrie Rautenbach says the B-BBEE transaction involves 7% of the total Absa Group shareholding, comprising 3% for South African staff and 4% for black participants in selected CSI programmes. Absa anticipates that the SA staff scheme will be implemented on 1 September 2023, allowing thousands of Absa employees to become shareholders when the shares vest five years from the implementation date – or in September 2028. On implementation of the transaction, Absa will also allocate shares to a CSI Trust which will distribute its significant dividend income to its beneficiaries, who will be mainly black participants in CSI programmes that focus on education and youth employability. The SA staff scheme will include about 26,000 eligible permanent staff members of Absa Group companies in South Africa, regardless of race or nationality. However, the SA staff scheme will be structured to enhance the participation of 20,500 eligible South African black (African, Indian and coloured) staff members who will receive an additional 20% allocation relative to staff who are not black, which means about 82% of the SA staff scheme will benefit black staff. ‘Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER’. https://www.dailymaverick.co.za/article/2023-06-05-absa-shareholders-green-light-r10-billion-b-bbee-deal-as-share-prices-plummet/

Ina Opperman | 5 June 2023 If you have a well-paid job, should you not stay where you are and count your blessings instead of starting a business? Why would someone quit their well-paid job to start their own business, especially in a challenging economic environment? Because they have the determination needed to keep their business afloat. According to the Global Entrepreneurship Monitor South Africa report, the country’s climate for conducive entrepreneurship is one of the lowest but there is hope on the horizon with entrepreneurs like Fikile Khiva, CEO of Kamva Capital, a management consulting firm. Khiva started Kamva Capital to drive transformation, financial literacy, entrepreneurship development and investment facilitation. “I voluntarily resigned and sacrificed a well-paid job to pursue my calling as an entrepreneur. “Growing up in poverty-stricken rural villages, I have always been driven to make a real difference; not only to myself but to entrepreneurs and other communities trapped in poverty.” Giving back to the community While he was still working for another company, Khiva started a plough-back initiative in his community in the Eastern Cape in 2008 and witnessed the impact it had on the lives of people. After 10 years of his professional career at Accenture and J.P. Morgan Chase, he resigned and founded Kamva Capital. For Khiva, starting his own company presented an opportunity for him to execute sustainable community development projects on a wider scale. But what motivates him in tough economic times? “What motivates me is knowing that, if I put energy into my company, I can make a positive change within myself and my reach.” Today, Kamva is a 100% black-empowered company that specialises in delivering business development solutions to various sectors, such as financial services, energy infrastructure, agriculture, digital and ICT and property. However, it was not all sunshine and rainbows, he says. “The uphill part of entrepreneurship is dealing with ongoing challenges in various aspects of the business and stakeholders, as well as family and just people in general.” Getting capital is difficult He says a difficult aspect of entrepreneurship is gaining access to capital. Kamva has been able to grow by partnering with Inyosi Empowerment, a South African enterprise and supplier development funding provider. Inyosi provided various resources for Kamva Capital. The most recent was funding for motor vehicles to ensure the safe transport of its employees. “From a job creation point of view, it is encouraging that Kamva is planning to create jobs in the Eastern Cape which is currently the province with the highest unemployment in SA. “We share Kamva’s passion for uplifting communities by investing in businesses which have a positive impact at a local level,” Evan Jones, founder of Inyosi Empowerment, says. Inyosi Empowerment provided much-needed access to funding, markets and skills for Kamva Capital and many other SMEs. ‘Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER’. https://www.citizen.co.za/business/personal-finance/why-quit-well-paid-job-start-business/