SA News | 1 October 2024 The Department of Employment and Labour’s joint blitz inspections and raids have yielded significant results, with the department enforcing monetary corrections totalling over R10 million and arresting 81 non-documented workers.  The Minister of Employment and Labour, Nomakhosazana Meth, held a media briefing today to update on the department’s joint blitz inspections and compliance raids.  In a decisive move to uphold employment standards, Meth announced that since assuming office in July 2024, her department has ramped up nationwide inspections targeting non-compliant employers. Collaborating with the Department of Home Affairs, the Bargaining Council of the Hospitality Sector and law enforcement, the high impact blitz inspections focus on ensuring that workplaces adhere to key labour laws and safeguard workers’ rights. “Our inspections have revealed instances of non-compliance, including underpayment of wages, unlawful deductions, and inadequate health and safety measures. To date, we have enforced monetary corrections totalling over R10 million, compelling employers to rectify these violations and honour their obligations to their employees,” the Minister said.  Meth emphasised that the department approaches enforcement with a balance of firmness and fairness.  “Employers found in violation are issued compliance orders with clear deadlines for corrective action. In situations where immediate risks to health and safety are identified, Prohibition Notices are issued to halt hazardous activities until compliance is achieved,” she said.  The Minister said the scale and scope of these inspections demonstrate the department’s commitment to upholding labour standards nationwide.  The Western Cape led with the highest number of inspections, totalling 809. Gauteng followed with 764 inspections, and KwaZulu-Natal with 535. Inspections were also carried out in the North West (217), Eastern Cape (82), Free State (69) and Mpumalanga (59). These joint inspections targeted key sectors and regions, with significant activity in the Western Cape, Gauteng, and KwaZulu-Natal. These joint operations scrutinised compliance with laws, including the Basic Conditions of Employment Act, National Minimum Wage Act, Occupational Health and Safety Act, Compensation for Occupational Injuries and Diseases Act (COIDA), Unemployment Insurance Act (UIA), Employment Services Act, and promoting fairness and protecting workers.  Infractions such as underpayment of wages, illegal deductions, and unsafe working conditions were identified. Tackling unemployment and undocumented workers Meth expressed concern over South Africa’s unemployment rate of 33.5%, particularly among the youth.  "Concurrently, the widespread employment of undocumented foreign nationals raises concerns over exploitation and the circumvention of legal hiring practices. “Our administration is committed to addressing these challenges comprehensively and humanely. We are collaborating closely with the Department of Home Affairs to ensure that employment practices comply with immigration laws, and that all workers, regardless of their origin, are treated with dignity and fairness,” Meth said.  Strengthening oversight and enforcement Looking ahead, Meth revealed plans to expand the Department of Labour’s inspectorate capacity from 2 000 to 20 000 inspectors over the next three years.  This will enhance the department’s ability to conduct more frequent and thorough inspections across the country.  The introduction of risk-based profiling will allow for targeted audits, prioritising industries and regions where violations are most prevalent. “To maximise the effectiveness of our inspections, we will implement a risk profiling system. This approach will allow us to prioritise audits and inspections based on identified risks, thereby improving our capacity to address high-priority non-compliance areas more efficiently,” the Minister said.  The department will also introduce a specialised segment-focused compliance framework.  “Our enforcement strategy will be integrated and risk-based, enabling us to address all compliance issues at the workplace in a holistic and comprehensive manner, ensuring that all regulatory requirements are met. “Our commitment extends beyond enforcement; it is about fostering social justice and ensuring that every worker's rights are protected.  “Fair labour practices lead to increased morale, productivity and ultimately, a more robust economy. Together, we can build a society where economic prosperity and social equity reinforce each other,” Minister Meth said.  Supporting businesses: TERS, Productivity SA and the CCMA In addition to enforcement, the Department of Employment and Labour is extending support to businesses by offering a range of services, fostering resilience, and ensuring harmonious labour relations. Initiatives like the Temporary Employer/Employee Relief Scheme (TERS) and free productivity services from Productivity SA aim to help businesses in financial distress and improve their operational efficiency.  The Commission for Conciliation, Mediation, and Arbitration (CCMA) also offers mediation services to resolve workplace disputes. Operation Yazini: Raising Public Awareness As part of Meth’s 100-day programme, Operation Yazini will be launched to raise awareness about the department’s services, including employment rights and compliance assistance.  This initiative aims to bring the department closer to communities, ensuring that employers and employees alike understand their legal obligations and rights. “Through targeted advocacy and outreach, Operation Yazini seeks to inform the public about the wide range of support available, including labour rights, employment services, and compliance assistance,” the Minister said.  A call for collective action Meth called for nationwide collaboration between employers, unions and civil society to create a fair and safe labour market.  “I urge all stakeholders, businesses, labour unions, civil society organisations, and fellow citizens to join us in this vital endeavour. Let us work collaboratively to create a labour market characterised by fairness, safety, and mutual respect,” the Minister said. As inspections continue, the department remains committed to transparency, social justice, and the protection of workers’ rights across South Africa. ‘Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER’. https://www.sanews.gov.za/south-africa/employment-and-labour-blitz-inspections-and-raids-yield-results

Umamah Bakharia | 1 October 2024 Institutions of higher learning need to recruit more women and people with disabilities to achieve the equal representation dictated by the Employment Equity Act. A new report by the Commission for Gender Equality (CGE) also noted that some universities are reluctant to review their sexual harassment policies, resulting in inadequate measures being in place to protect victims and punish perpetrators. “It is also vital that universities provide adequate funding for gender transformation to achieve their employment equity targets, as well as manage the retention of female staff,” said the report, which focused on gender dynamics at Walter Sisulu University, Sefako Makgatho Health Sciences University, University of Fort Hare and the University of the Western Cape.  At Walter Sisulu University, the 13 top management positions comprise eight African men and five African women with no representation of people with disabilities and other races. Men occupy 583 academic staff positions and women 516. At the administrative level, 473 positions are occupied by women and 394 by men. “These figures indicate that women are in the minority in top and senior management, as well as at academic levels,” the report says. The university has an assigned employment equity manager with decision-making authority, but the report says this has not been effective, “given the skewed employment equity representation”. The institution does not have a flexitime policy, childcare facilities or policies to enable the reasonable accommodation of parental obligations.  “The lack of such a policy demonstrates a reluctance to implement the provisions of the Code of Good Practice on Pregnancy and After the Birth of a Child, particularly clause 5.2.2, which requires consideration for protective measures and adjustments to working arrangements for pregnant or breastfeeding employees,” the report said.  At Sefako Makgatho Health Sciences University, the commission found that men were overrepresented in the top, senior and academic positions, as well as the professor and dean levels. “The university is having difficulties in addressing employment equity barriers that are deeply rooted in the social culture of the institution and further perpetuated by the location, scarce skills and some unattractive disciplines,” it said. The University of Fort Hare has 18 senior management positions, of which only four are held by women, with no representation of those with disabilities. The report further found that the university’s sexual harassment policy was not compliant with the Code of Good Practice.   Although there are laws in place to address gender equality, there is not much awareness, said Brightness Mangolothi, the director at Higher Education Resource Services-South Africa (HER-SA). “The Code of Good Practice on Pregnancy is a taboo issue that is not talked about, and the Code of Good Practice on Harassment is yet to be fully engaged on. Where policies exist, there is poor education and implementation of policies and monitoring, and evaluation remains a challenge,” she said . Meanwhile, the Commission for Gender Equality has applauded the University of the Western Cape after it found that of the 2 553 people the institution employs, 1 552 are women and 1 001 are men.  “Gender equity is seen as a priority at the university, and the work of the Gender Equity Unit is foremost in this endeavour,” the report said.  It recommended that the university include a section on gender on the payroll personal data verification to enable human resources to capture information on gender diversity. In terms of Article 10 of the Convention on the Elimination of All Forms of Discrimination Against Women, the government is obliged to take all appropriate measures to eliminate discrimination against women to ensure their equal rights with men in the field of education. While the report has been welcomed by HER-SA for raising “pertinent issues”, the organisation called on the Commission for Gender Equality to address what “needs to be done to get universities to commit to the implementation of the recommendation”.  The department of higher education said it has been working to address gender gaps in institutions.  “The department of higher education and training is working with the CGE and the Higher Health [an organisation in the department that deals with gender-related issues] to identify trends and challenges [by] working with institutions,” said the department’s communications director, Lucky Masuku. ‘Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER’. https://mg.co.za/news/2024-10-01-universities-need-to-better-address-gender-inequality-report-says/

Sabrina Jardim | 1 October 2024 With South Africa facing a critical shortage of skilled and qualified artisans and engineers, steel producer ArcelorMittal South Africa ’s (AMSA’s) fully Quality Council for Trades and Occupations- (QCTO-) accredited Engineering Academy, based in Vanderbijlpark, Gauteng, offers artisan training to help address the technical skills gap in the country. In a media presentation on September 26, AMSA learning and development manager Nicolene van Emmenes posited that an integrated approach to skills development could address current deficiencies in basic education, as well as help to increase the number of apprentices trained at further education and training (FET) colleges, and the quality of the training . In the latter area, she noted, initiatives were being put in place to improve the quality of teaching and provide college lecturers with practical workplace experience. She added that AMSA had based its skills development strategy on addressing issues within physical science and mathematics at the basic education level, as well as the skills development of the unemployed, thereby bolstering the required skills for the South African economy and addressing the business needs of AMSA. As part of its learner pipeline development, AMSA offers an apprenticeship programme that offers institutional training , as well as workplace exposure. The apprenticeship is a three-year learning programme, culminating in a trade test with a National Trade Certificate. AMSA Engineering Academy junior manager Busisiwe Dhladhla noted that the academy offered apprenticeship opportunities for seven occupational trades, including electricians, millwrights, mechanical fitters, fitters and turners, boilermakers, welders and instrumentation mechanicians. Apprenticeships comprise 30% institutional training and 70% workplace exposure. “The training is specific to the trade itself and, through the programme, learners will be equipped with the skills they need to become competent in these trades both locally and internationally,” said Dhladhla. AMSA currently has 359 apprentices in training at the Engineering Academy. INITIATIVES AMSA is actively involved in several initiatives to help address skills gaps in South Africa at a national level, assisting the departments of higher and basic education and the business sector. Given that the QCTO now oversees the accreditation for occupational qualifications and programmes, Van Emmenes noted that AMSA assisted with curriculum development for new occupational qualifications linked to the QCTO. As previously reported in  Engineering News , legacy qualifications and singular unit standards have expired as of June 30. Hence, anyone wishing to enrol learners or employees for skills development will, therefore, need to be QCTO-accredited. Consequently, while AMSA was previously accredited for legacy qualifications, the company is now accredited to provide occupational qualifications. The AMSA Engineering Academy has been fully QCTO accredited since 2022 and is expecting to have its first candidates qualifying in October this year. The steelmaker is also recognised by the Manufacturing , Engineering and Related Services Sector Education and Training Authority (merSETA) as a platinum -ranked skills development company, and is a member of the Accelerated Artisan Training Program (AATP). Van Emmenes highlighted AMSA’s role in the Master Steel Plan project , a development initiative in collaboration with MerSETA. She explained that AMSA had engaged with the Department of Trade, Industry and Competition and MerSETA to develop an expanded skills programme in the form of apprenticeships and metals production learnerships. MerSETA has provided a R62-million funded investment for 300 production learners and 200 apprentices on a registered structured learning programme at AMSA on a 30-month project , which began in January. Recruitment for the project has been completed and all learners have registered and have begun with their learning programmes. AMSA also offers university bursaries for engineering students and for employees wishing to further their studies. Closing date for applications is October 31 and applicants can apply on the company’s website. “Our focus is to ensure young people are aware of the opportunities at AMSA. We've got opportunities from university bursaries right through to apprenticeships, so there are a wide range of opportunities for young people to become part of a challenging but exciting world of work in industry,” said Van Emmenes. ‘Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER’. https://www.engineeringnews.co.za/article/arcelormittal-south-africa-works-to-address-skills-gap-through-artisan-training-2024-10-01

Rebecca Campbell | 3 October 2024 That South Africa, in general, and the renewable-energy sector in particular, need skills development, is a truism. But the requirements of the renewable-energy industry and the output of skills development institutions and programmes are significantly out of alignment. But not in the way you might think. The country is currently producing too many skilled renewable-energy workers, compared with the industry’s actual needs. This was made clear during a panel discussion at the Windaba 2024 conference, at the Cape Town International Convention Centre. Presidential Climate Commission employment strategy head Devan Pillay pointed out that, across the entire economy, over the past ten or so years the government and business together had spent about R20-billion on skills development. Skills development, however, depended on understanding the demand, including long-term demand. Thus, two or three years ago, the training of solar panel installers had been prioritised, with the result that today there was an oversupply of these specialists, while other key sectors still lacked sufficient skilled workers. Energy and Water Sector Education and Training Authority CEO Mpho Mookapele affirmed that there was a need to accept that there were skills that were needed now, but that long-term planning was needed to develop the skills that were required for the future. There was indeed now an oversupply of solar technicians; people had the skills, but there were no jobs available. The country and sector needed a workforce with skills that could be applied across wider industry. For example, what skills did solar technicians have that could be used in other industries? “Some renewable energy jobs are not long-term jobs,” she warned. Pillay observed that renewable-energy projects involved a planning phase, a construction phase, and a post-construction (operation and maintenance) phase. The operation and maintenance phase would not require the number of workers that the planning and especially construction phases needed. Nordex Energy South Africa head of people and culture Zelrese Brair confirmed that the misalignment between skills training programmes, and the actual industrial demand for those skills, also applied to the wind energy sector. (Germany-domiciled Nordex Energy is an original equipment manufacturer (OEM) of onshore wind turbines.) She highlighted that, from the perspective of Nordex, as an OEM, service technicians were needed. But, as for the other wind power specialists, OEMs would need only a few of each. “An engineer is an engineer,” she noted. “A service tech is a service tech.” But, to work in the wind power sector, they needed to understand the requirements of the sector. Mookapele put the spotlight on a related current problem. Students at technical vocational education and training colleges were successfully completing the theoretical phases of their training, but they could not graduate. This was because private-sector companies simply did not have the capacity to take them for their in-practice training. “That’s a sad reality.” ‘Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER’. https://www.engineeringnews.co.za/article/skills-development-and-the-renewable-energy-sectors-worker-needs-are-misaligned-in-south-africa-2024-10-03

Bongani Mdakane | 3rd October 2024 Six directors of the Gauteng-based firm NJM Treatment and NDE Services (NJM) have appeared at Palm Ridge magistrate’s court on Thursday facing charges of fraud. Mark Douglas Smith, Alexander Elias Roditis, Vanessa Chungu, Raymond Crozier, Guy Phillip le Roux and Ronald James Hoy were arrested on Monday and hauled straight to court for bail applications. Companies that are also accused of committing fraud are NJM, Dasmar Engineering and Thermo Jet. All six granted bail of R20,000 each All six accused were granted bail of R20,000 each, and their case was postponed to  November 29. Sunday World broke the story of NJM in July last year, when a businesswoman named Baleseng Zinyana claimed acts of fraud at the company. Zinyana lodged a formal complaint with the Independent Regulatory Board for Auditors (IRBA) in 2021. She lodged it against the auditors of her company, NJM, for suspicious fraudulent activities. In the complaint, Zinyana said she acquired 26% of the engineering company’s shares. These she paid for in cash in 2014. She said after the reviewed financial statement for the year ended February 28 2019 was presented, the board resolved in November 2019 to appoint an audit firm to perform an audit for the 2018-2019 year as well as the years to follow. Hawks spokesperson, Colonel Katlego Mogale confirmed the matter.  “These arrests stem from extensive investigations into fraudulent activities. They involve  NJM Treatment and NDE Services and other entities. The accused face charges of fraud, theft, and money laundering. “Investigations revealed a series of issues. The directors of NJM Heat Treatment and NDE Services misrepresented themselves to Eskom. …They did so by submitting fraudulent tenders for supply of goods. And they falsely claimed to have a valid shareholders’ agreement and engaged in fronting practices. Thus violating the B-BBEE Act,” said Mogale. Entered plea of not guilty In court, the lawyer of the NJM directors, Ian Small-Smith, read their affidavits to magistrate Phillip Venter. In it they all pleaded not guilty on charges they faced. The court heard that in October 2017, the directors knowingly submitted falsified financial records to Eskom. This was to secure a tender, leading to fraudulent activities. “The South Gauteng High Court heard the case, where suspects admitted to presenting false information to Eskom. Similar fraudulent activities were identified in their dealings with Sasol, resulting in the termination of NJM’s services. The potential loss to both entities is estimated at over R400-million,” said Mogale. Barred from leaving the country Venter told the accused that they should not leave the country without informing the investigating officer. And they should give compelling reasons to the police if they had to travel abroad. The National Head of the Hawks, Lieutenant General Godfrey Lebeya, has welcomed the arrests. “We urge all businesses to desist from corrupt actions and maintain transparency and integrity in their operations. Corruption has severe legal consequences, be it in the private or public sector. And it undermines trust and credibility. Upholding ethical standards is crucial for a fair and just society,” said Lebeya. ‘Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER’. https://sundayworld.co.za/news/directors-of-eskom-sasols-supplier-busted-for-bee-fraud-fronting/

Jan Vermeulen | 2 October 2024 For three and a half years, regulations that would compel all network and Internet service providers to have 30% black ownership have been suspended with no indication of whether they will be implemented. This has plunged South Africa’s entire telecommunications industry into a state of uncertainty, with smaller players disproportionately affected. The Independent Communications Authority of South Africa (ICASA) published its new local ownership regulations on 31 March 2021 after a contentious public consultation period. It supersedes existing provisions in the Electronic Communications Act (ECA), which requires that telecommunications companies offering national services be 30% owned by historically disadvantaged groups (HDGs). HDGs include black people or citizens who are women, youth, or people with disabilities. Compliance with this equity provision was low, and ICASA also did not enforce it on those who already had the necessary licences. To understand how this happened, it is necessary to go back twenty years — before the Electronic Communications Act of 2005 came into effect. Under the previous Telecommunications Act of 1996, there were many licences for different types of networks. These included licences for public-switched telephone services, mobile networks, international telecommunications services, and private telecommunications networks. For everyone else, there was the Value Added Network Service (VANS) licence. The law also explicitly stated that only Telkom was allowed to operate a local access network until the Minister of Communications said otherwise. When the ECA replaced the Telecommunications Act on 19 July 2006, it dramatically simplified the licences and included a mechanism for converting old licences to the new regime. This was to facilitate the so-called “managed liberalisation” of South Africa’s telecommunications sector, hopefully ending Telkom’s decade-long monopoly. Instead of licences for different types of services — which wasn’t very future-proof — the ECA essentially had two different licence types and two licence classifications. The two types were Electronic Communications Network Service (ECNS) and Electronic Communications Service (ECS). An ECNS licence allows licensees to build and operate physical networks, whereas an ECS licence lets them offer telecommunications services. These can be issued as either “individual” or “class” licences. An individual licensee can operate nationally, whereas class licences are regional. Under the direction of the late former minister Ivy Matsepe-Casaburri, ICASA published a list of VANS licensees who would be converted to an I-ECNS licence. These licensees would be permitted to build their own physical network infrastructure, like Telkom, Neotel (now Liquid), Vodacom, MTN, and Cell C. Some of the VANS licensees that were left off the list launched a legal challenge against ICASA and the minister in what became known as the “Altech case”. The case dragged on until August 2008, when the Pretoria High Court ruled in favour of Altech and all other VANS. Matsepe-Casaburri ultimately chose not to appeal . By November of that year, Altech’s win was final. ICASA had to convert all VANS licensees to I-ECNS licences. The minister’s capitulation meant Altech and about 300 other voice and data carriers could all build their own network infrastructure. Several of these VANS licensees were small businesses, ranging from sole proprietorships to companies with fewer than a dozen employees. This means many did not meet the 30% HDG ownership requirement, but thanks to the government’s bungling of the ECA transition, they got I-ECNS licences anyway. As a result, the South African government accidentally sparked a boom in South Africa’s telecommunications industry. A vibrant and fiercely competitive sector emerged. Although it took several years for true competitors to Telkom to rise, Vumatel and the Parkhurst Residents and Business Owners Association smashed the floodgates in 2014. While a few small private fibre network operators were active at the time, these were predominantly rolling out in more affluent estates and gated communities. These also generally focused on “greenfield” residential complexes that were still under construction. Vumatel and Parkhurst showed that the models being used to determine the financial feasibility of suburban fibre rollouts were flawed. Parkhurst also proved there was consumer demand by running a survey among community members, and showed there were many operators willing to build them a network by accepting bids through a tender. It ignited a craze among South Africa’s leafy suburbs. Several had soon published their own tenders. However, it soon became unnecessary for neighbourhoods to get fibre network operators’ attention this way. A fibre landgrab soon ensued. By March 2019, just under five years after Parkhurst, Vumatel had overtaken Telkom’s Openserve as the largest fibre-to-the-home provider in South Africa in terms of homes passed. Those are the homes covered by its network but which do not necessarily have an active connection. During the five years that followed, Vumatel doubled down. It extended its lead over Openserve and overtook it in terms of homes connected. At the same time this industry boom was taking off, Icasa instituted an inquiry in 2014 regarding the industry’s low levels of ownership by historically disadvantaged groups. Unfortunately, Icasa’s inquiry did not seem to recognise that its own failure to issue new I-ECS and I-ECNS licences since 2010 was a key culprit. It also didn’t seem to recognise that making it easier for young entrepreneurs to launch telecommunications companies would boost participation from black people. Instead of considering ways to further liberate a sector where small businesses had flourished, Icasa began drafting updated regulations in 2020 to crack down on it. Its plan was to not only change the ownership requirements, but to enforce them on everyone with individual-type licences — including the small businesses that had obtained theirs back in 2009. Despite industry backlash, Icasa forged ahead. Now, its chilling regulations are hanging like an axe over the whole industry, with Icasa lacking the courage of its convictions to follow through — and defend them in court — or withdraw them. One of the most prominent examples of these regulations preventing progress is Starlink’s hesitation to launch in South Africa . However, Starlink is hardly the only collateral damage the regulations will cause. South Africa’s broadband revolution didn’t happen overnight. It took three years between Altech launching its legal challenge in 2006 and Icasa converting all VANS licences to I-ECNS licences in 2009. It was another five years before that breakthrough led to South Africa’s explosion of fibre network operators. Five years after that, Vumatel had toppled Telkom’s fixed-line monopoly. In 2024, another five years on and nearly twenty years since Altech took Icasa and the Minister to court, Vumatel launched fibre in Alexandra . And Vumatel is just one of several companies doing fantastic work in South Africa’s broadband sector. Incidentally, Vumatel’s parent company has a BEE shareholder. Like most of South Africa’s major fibre network operators, it won’t really feel this change. It’s the smaller industry players who will be impacted most. By further restricting I-ECNS and I-ECS licences, Icasa is actually undermining the very thing that helped make South Africa’s broadband industry so vibrant. If it wants to boost transformation, it needs to incentivise black entrepreneurs to enter the sector and make it easy for them to succeed — not punish the forerunners and innovators on whose backs and blood the industry was forged. ‘Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER’. https://mybroadband.co.za/news/telecoms/563017-dark-cloud-over-south-african-communications-industry.html

Bongani Mdakane | 7th October 2024 Political parties have welcomed the arrest of the directors of the Joburg-based engineering company NJM Treatment and NDE Services (NJM).  Mark Douglas Smith, Alexander Elias Roditis, Vanessa Chungu, Raymond Crozier, Guy Phillip Le Roux and Ronald James were charged with fraud on Thursday after handing themselves to the police.  They appeared before the Palm Ridge Magistrate’s Court on the same day, where they were granted bail of R20 000 each. They denied the charges and indicated they intend to plead not guilty.   They are expected back in court on November 29.  They allegedly submitted false information to Eskom and Sasol to secure tenders, leading to an estimated R400-million loss for both entities.  Political parties commended the arrests, especially investigating officer Lieutenant Colonel Jeremiah Jabulani Dlamini.   ActionSA leader Herman Mashaba welcomed the arrests.  “This case of these individuals in particular, caused almost irreparable damage to our economy, leading to the current unacceptable high levels of unemployment. We hope our courts factor this during their sentencing process,” said Mashaba.  EFF spokesperson Leigh-Ann Mathys said the NJM directors “actions have not only violated laws but have also exacerbated the crisis of corruption. The fraudulent submission of tenders and their misrepresentation under the Broad-Based Black Economic Empowerment (BBBEE) Act is an attack on the transformative goals of economic empowerment.”   ATM leader Vuyo Zungula said: “ATM firmly believes that crimes of this nature should carry hefty sentences.”   NJM’s woes stated when the company revealed in the Joburg High Court about a year ago that it misrepresented its BEE status in a bid to get an Eskom tender.  NJM former shareholders also worsened the entity’s problems when they complained about fronting involving its 26% shareholder Baleseng Zinyana and another 25% shareholder, Vanessa Chungu.  They alleged that in 2017, the NJM directors Mark Smith and Alex Roditis intended to sell shares equalling 25% to another black woman, Chungu, to enable the company to be 51% black-woman owned.  They said they were later informed that Chungu bought the shares but because she did not have the capital she would pay for them from dividends, which would leave her forever indebted while the company continued to benefit from a good BBBEE assessment scoring.  ‘Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER’. https://sundayworld.co.za/news/parties-welcome-arrests-of-njm-directors/

Mayibongwe Maqhina | 4 October 2024 The National Skills Fund (NSF) failed to provide audit evidence showing that the skills development funding for 2023-24 and prior years was properly accounted for. This was Auditor-General Tsakani Maluleke’s finding after she audited the finances of the NSF, which obtained a qualified audit opinion, saying that evidence that services had been received could not be provided. “I was unable to confirm the skills development funding by alternative means,” Maluleke said. “Consequently, I was unable to determine whether any adjustments relating to skills development funding stated at R1,784,654,000 (2022-23: R1,182,657,000) disclosed in note 20, as well as the related deferred expenditure stated at R1,370,063,000 (2022-23: R1,221,194,000) disclosed in note 9 to the financial statements were necessary,” she said. On top of this, the institution's report, tabled in Parliament this week, showed that the NSF underspent by R3 billion during the period under review. The expenditure for education and training programmes totalled R2.626 billion and capacity building initiatives were underspent by R542 million. CFO Zama Kubheka said there were factors that have contributed to underspending, such as delays in the approval of new projects, contracting process, project registration and payment of initial tranche payments. “The NSF is working hard in ensuring that SDPs receive the funds to allow for service delivery to occur,” Kubheka said. In her audit report, Maluleke said the financial statements submitted for auditing were not prepared in accordance with the prescribed financial reporting framework and supported by full and proper records. “Material misstatements of investments, deferred expenditure, provisions related to skills development funding and related parties identified by the auditors in the submitted financial statements were corrected, but the uncorrected material misstatements and supporting records that could not be provided resulted in the financial statements receiving a qualified opinion.” Maluleke blamed the state of finances at NSF on significant internal control deficiencies, with management not implementing adequate internal controls relating to project monitoring and reporting. “The leadership did not exercise adequate oversight, specifically regarding reporting on the skills development funding expenditure, performance and compliance, resulting in material misstatements and instances of noncompliance identified during the audit,” Maluleke added. Audit committee chairperson Professor Daniel van der Nest concurred with Maluleke that the system of internal control was not entirely effective during the year under review on matters of project reporting, financial statements and performance information. Van der Nest also said the timely availability of sufficient and appropriate supporting information for NSF operations was critical to resolve the qualified audit opinion and material findings. “Dependence on source documentation from skills development providers and manual reporting and consolidation processes increases the risk of human error. The implementation of the integrated ERP system will assist in improving the quality of both performance and financial reporting,” said Van der Nest. NSF’s acting CEO DK Mabusela said they unfortunately maintained a qualified audit opinion from previous year’s material misstatements. Mabusela said one of the weak areas of the NSF was sufficient human resource capacity, which has been linked to low levels of systems digitisation, automation, and information technology presence. “On the audit front, we will pay more attention on developing effective and efficient audit action plans based on the management report from AGSA, largely to conclusively address the prior year’s material findings, which was an albatross around our neck,” he said. In her report, Maluleke was unable to obtain sufficient appropriate audit evidence that disciplinary steps were taken against officials who had incurred irregular expenditure. “This was because investigations into irregular expenditure were not performed,” she said. Disciplinary action could not be taken in cases of fruitless and wasteful expenditure because investigations were not performed, Maluleke said. Higher Education Minister Nobuhle Nkabane said tightening the controls of the NSF-funded programmes should receive the utmost attention. “This has become a necessary intervention to address the shortcomings highlighted by AGSA in the NSF’s 2023-24 audit and to demonstrate that the NSF is moving in the right direction,” Nkabane said. ‘Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER’. https://www.iol.co.za/capetimes/auditor-generals-findings-nsf-fails-to-provide-evidence-for-skills-development-funding-248f660a-0a87-4780-96cc-3999915850aa

On 03 October 2024, the Legal Practice Council issued a Notice of Frequently Asked Questions   on the Legal B-BBEE Sector Codes of Good Practice.   The Introduction of this document stated the following:   “The LPC is aware that practitioners require clarity on the Legal Sector Code (LSC) gazetted on 20 September 2024. The Charter Council, which is in the process of being set up, will on its establishment, engage with practitioners and provide information, clarification and guidance. In the meantime, the LPC requested the Legal Sector Code Steering Committee to compile the FAQ below to provide some information.”   The BEE Chamber looks forward to further clarity on certain areas of the Legal B-BBEE Sector Codes of Good Practice for effective implementation.   Technical Compliance Services  are available to advise how members in relation to the Legal B-BBEE Sector Codes of Good Practice.

The Youth Employment Service NPC recently released its 2024 Annual Report  with some exciting results.   YES concluded its last financial year (FY23) by reaching the 100,000-job milestone. In FY24, its fifth year of operation, and as South Africa’s largest 12-month, full-time jobs programme, YES continued its upward trajectory to yield record results. By the end of March 2024, YES had created a grand total of more than 139,906  jobs and a record 37,092 for FY24 – a 14 percent increase over the corresponding period in FY23, despite a negative economic environment.   YES’s programme renewal rate drives YES growth because it is a measure of the initiative’s success and directly influences the ability of YES to scale and to keep generating jobs. YES scored well, with a 71 percent programme renewal rate that attests to our clients’ trust and long-term commitment.   YES has also continued to focus on efficiency and automation in scaling youth jobs. The YES cost per job is an average of R2,366 (4.2 percent of youth benefit). With many NPOs aiming for a 10% operational cost to benefit target, YES, at 4.2% is significantly better than this benchmark indicative of a lean operating model which is fully funded by the private sector.   YES Services  are available to assist members in understanding requirements under the Youth Employment Service initiative.

Thando Nondywana | 14 October 2024 Tito Mboweni 'conducted himself with expert rigour while maintaining the personable touch that made him a social media star’. Tito Mboweni was known for his forthright views and has been hailed for the significant impact he made in both the public and private sectors in South Africa. President Cyril Ramaphosa said Mboweni’s death on Saturday at the age of 65 was a shock. “We have lost a leader and compatriot who served our nation as an activist, economic policy innovator, and champion of labour rights. “As a former governor of the SA Reserve Bank (Sarb) and finance minister, he had a sharp focus on fiscal discipline and economic transformation,” Ramaphosa said. Mboweni’s family said in a statement on Saturday evening the former minister had died after a short illness. “Tito Mboweni distinguished himself in different strategic roles in the private sector and was a flag-bearer in global forums for our economy and developing economies more broadly. “He conducted himself with expert rigour while maintaining the personable touch that made him a social media star,” Ramaphosa added. Humble beginnings Mboweni came from humble beginnings in the poverty-stricken village of Bordeaux in Limpopo. His journey to becoming South Africa’s first black governor of the Sarb in 1999 was marked by notable achievements. He steered the country through the 2008 global financial crisis, providing steady leadership. ‘Passionate central banker’ – Sarb “Mr Mboweni’s passing is a great loss to South Africa, the continent and the global economic community. “He played a meaningful role in driving economic transformation and social change. “He was a passionate central banker and was instrumental in building the Sarb into the professional, formidable institution it is today,” Sarb noted in a statement. Sharp intellect and transparency SA Chamber of Commerce and Industry CEO Alan Mukoki said: “He was known for his sharp intellect, transparency in business dealings, and deep understanding of economic challenges. “As governor of the Sarb, he brought transparency and credibility to SA’s monetary policy and elevated the Sarb to one of the most highly regarded central banks globally,” Mukoki said. Minister of labour Mboweni’s contributions as minister of labour left an unmatched legacy. Under his tenure, critical labour laws were passed, including the Labour Relations Act, the Basic Conditions of Employment Act and laws on occupational health and safety, skills development and employment equity. The National Economic Development and Labour Council was also created. Cosatu on Mboweni: ‘Revolutionary’ contributions to labour’ The Congress of SA Trade Unions’ Matthew Parks described his contributions to labour as revolutionary, calling him a man of integrity and principles. “Mboweni played a historic role in putting in place the many progressive labour laws that today enshrine millions of workers’ rights to form trade unions, to collective bargaining and to strike. “That set minimum conditions for service and protects the rights of the most vulnerable,” Parks said. ANC and EFF pays tribute ANC secretary-general Fikile Mbalula said Mboweni’s death was a loss for SA as he had played a crucial role in “shaping the country’s economic policies”. The EFF said: “While we often were at odds with the former minister on policy matters – disagreeing with his neoliberal and orthodox approach to economic policy – he was always open to robust, frank and intellectual exchanges.” ‘Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER’. https://www.citizen.co.za/news/tito-mboweni-finance-minister-sarb-governor-legacy-tributes/

Edward West | 14 October 2024 Coronation Fund Managers plans to grow its Black Economic Empowerment (BEE) from a 31% ownership level to over 51% as growing industry pressures mean it might not be able to grow its R632 billion in assets under management (AUM) unless it further transforms. Explaining why the company has proposed transactions that will involve participation by its employees who are black persons - there are currently 193 - as well as the upliftment of a broad base of beneficiaries, Coronation’s directors on Friday said these transactions were necessary notwithstanding the existing Level 1 BEE contributor status, and 31% black ownership level. “Coronation estimates the total indicative expense...to be approximately R270 million to R330m. Coronation further estimates the dilutionary impact...on earnings and dividends per Coronation share to be about 2% to 3% - excluding transaction implementation expenses - and 1%, respectively,” said the company. The share price fell 2.3% to R39 on the JSE on Friday. The directors said Coronation was facing challenges from not having 51% black ownership due to changing regulatory developments, and requirements by capital allocators and local asset management participants who were placing increased focus on minimum black ownership levels “that substantially exceed the requirements per the Codes”. The government has outlined a number of black empowerment related targets for different industry sectors in an effort to right racially skewed employment and economic equity levels in the country. Since 2021, Coronation has maintained a Level 1 contributor status in terms of the Amended Financial Sector Codes of Good Practice on B-BBEE, with, for instance 42% of total assets under management being managed by black employees. Some 64% of its employees are black, of which 57% are black women. An online search by BR showed that new black empowerment targets for financial services companies proposed this year include that 46% of top management be comprised of black employees, with a split of 26% male and 20% female.. Coronation said it was also unable to participate in industry surveys geared towards asset managers with majority black ownership, which excluded Coronation from participating in certain client mandates from the outset. The asset manager said it had also experienced outflows that were specifically allocated to asset managers with at least 51% black ownership. “Accordingly, an enhancement to Coronation’s current level of black ownership is a business imperative,” the directors said. This imperative also aligned the company's goal of substantial and sustainable transformation for the benefit of its stakeholders, the financial services industry and the wider South African community. Coronation would conclude share subscription and funding agreements that would involve establishing an employee share ownership plan (ESOP) - Coronation ordinary shares would be issued to the Imbewu Trust (ESOP Trust) for black permanent employees. The current market value of these shares was R1.21 billion. The plans also involve a broad-based ownership scheme whereby Coronation shares will be issued to the Ho Jala Trust (BBOS Trust), a trust that aims to conduct public benefit activities for the benefit of black people. The current value of these shares was R287m. The Ho Jala Trust would be issued 7.2 million Coronation shares, while the ESOB Trust would be issued 30.37 million shares. Both share issues would be over a notional funding period of 10 years. “The company will issue the subscription shares subject to a notional funding arrangement, and at the end of the notional funding period the company will repurchase, at the subscription price, the repurchase shares, determined with reference to the notional funding balance on the 10th anniversary of the Notional Funding Commencement Date,” the company directors said. ‘Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER’. https://www.iol.co.za/business-report/companies/coronation-fund-managers-to-boost-its-black-empowerment-ownership-level-to-over-51-163752dc-41a1-4c44-b441-0762da59e083