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The Independent Communications Authority of South Africa (Icasa) says it plans to introduce new BEE regulations for the information and communications technology (ICT) sector before the end of the 2020/2021 financial year.
In February, the regulator published the draft employment equity regulation. The purpose of the draft rulemaking is “to promote stock ownership by historically disadvantaged individuals and to promote broad-based black economic empowerment (B-BBEE).”
In a presentation to parliament on Friday (September 4), Icasa said that the draft regulation seeks to impose, among others, the following regulations:
- A requirement for all existing licensees to meet mandatory capital ownership requirements, 30% shareholding by blacks and BBEEE level 4 status, within 24 months following the promulgation of the regulation;
- Penalties of up to R 5 million of 10% of the licensees’ annual turnover when a licensee does not meet the mandatory minimum requirement;
- A requirement for annual compliance reporting on the status of capital ownership by black people in the licensee.
A faster transformation is needed
Data released by the Broad-Based Black Population Economic Empowerment Commission (B-BBEE) at the end of July shows a slight change in transformation levels, with overall black ownership reflecting a four percentage point increase of 25% of black property in 2018 to 29%.
Only 3.3% of the entities listed on the JSE are 100% owned by blacks, which was 1.2% in 2018 and 1% in 2017, the commission found.
The three worst performing sectors in property in 2018 were AgriBEE (11.19%), media, advertising and communication (19.55%) and finance (21.64%).
The commission said worrying trends are also seen over the three-year period 2017-2019.
“Although black ownership indicates a slight change, the percentage of black ownership does not always correspond to the management control scores,” he said.
“For example, an entity can get full points for ownership and very low management control, which gives the impression that even though black property is registered, black people are not involved in the central control and operations of the measured entity.
“In addition, the saturation of the management control points is still between the middle and lower management, and the rotation of black executives from one measured entity to another is observed, without using the skill development element to create a line of new black executives. “
The group said that for real and accelerated broad-based economic empowerment to be achieved, the B-BBEE Act must be applied consistently by both the public and private sectors, particularly with respect to section 10 and section 13G of the B-BBEE Law. , which are required.
“In addition, ownership, skills development, and business and supplier development are priority elements, yet overall performance is not satisfactory.”
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