1. PRESENTATION TO THE PORTFOLIO COMMITTEE ON PUBLIC ENTERPRISES
Broad –Based BEE
31 AUGUST 2005

2. Table of Contents Introduction
Policy instruments to achieve Broad-Based BEE
Roles and objectives of the Department Broad- based BEE
Past Transactions Performance
Challenges and lessons learned
Way forward

3. Introduction DPE’s vision is to ensure SOEs :
Facilitate economic growth through locating them in an optimal industry structure and ensuring the efficiency of their operations and the economic effectiveness of their investment Programmes

4. Introduction continued
Play a leadership role within the economy in the areas of corporate governance and national policy implementation;
Catalyse sector and regional economic development opportunities.

5. Policy instruments to achieve BBBEE
Policy framework : Accelerated Agenda towards the Restructuring of State Owned Enterprises ( 2000)
Triple bottom line reporting ( TBL) in line with the King II Report on Corporate Governance.
Broad-based Black Economic Empowerment Act of 2003

6. Policy instruments to achieve BBBEE continued
As part of Governance the Department expect SOEs to lead in the following :
Employment Equity
Skills development
Preferential Procurement
Sectoral Charters and in the absence will be guided by the Code of Good Practice

7. Policy instruments to achieve BBBEE continued

8. Role & Objectives of DPE’s BBBEE
Leverage the procurement spend to promote SMMEs, BEE and people with disability , youth and women empowerment .
Enhance economic inclusion by HDIs.

9. Role & Objectives of DPE’s BBBEE continued
To ensure accelerated progress in relation to skills development. I.e Spoornet Academy ( 2006), Transwerk Training and Eskom Up scaling Programme.

10. Role & Objectives of DPE’s BBBEE continued
Departmental level
Socio economic unit :
Monitoring of socio economic performance of SOEs against government socio economic objectives.
Lead in the identification of socio economic KPIs and targets .

11. Role & Objectives of DPE’s BBBEE continued
Departmental level
Report on quarterly and annual basis performances of SOEs in relation to empowerment.
Provide inputs to shareholder compacts.

12. Going forward
DPE will actively seek ways to bring in BBBEE players when :
Entering into Public -Private Partnerships ( PPPs)
Concession
The disposal of non core business of SOEs
In the execution of the above the Department will be guided by the following:
The Broad-based Economic Empowerment Act
The Preferential Procurement Policy

13. Restructuring transactions
Past Performance
Telkom IPO ( ESOPs, Ucingo BEE Consortia, Retail offers ( PDIs) 2003
Transnet Virtual Care ( MBO) 2003
ACSA ( BEE consortium ( 4%) and ESOP (1% ) 2000)
Transnet, Connex ( SEP/ BEE 80 %)
Transnet Production House 2001

14. Restructuring transactions continued
Completed transaction under Forestry:
Siyaqubeka ( BEE shareholding 10%)
Singisi ( BEE shareholding 10%)
Amatole ( BEE shareholding 25%)
Mountain to Oceans ( BEE shareholding 50%)
Komatiland ( BEE shareholding 30 % )

15. Challenges and lesson learnt
Concentration of suppliers to SOEs
Inadequate disclosure in the SOEs Annual reports
Identification of real Economic Empowerment beneficiaries i.e Denel

16. Challenges & lesson learnt continued
Lack of funding
Skills development is not well targeted
The SOEs Procurement policies regarding conflict of interest , fronting and Fraud Preventation Plans are not well spell out

17. Way forward
Need to create a standard framework for SOEs reporting on socio economic issues
SOEs should communicate their successes on Broad-base black economic empowerment
Submission of the SOEs Broad-Based Black Economic Empowerment as part of their three corporate plan.

18. Way forward continued
DPE to tightened oversight in relation to Broad- Based Black Economic Empowerment
Need to create a standard framework for SOEs reporting on socio economic issues
SOEs should communicate their successes on Broad-base black economic empowerment

19. Way forward continued
Submission of the SOEs Broad-Based Black Economic Empowerment as part of their three corporate plan.
DPE to tightened oversight in relation to Broad- Based Black Economic Empowerment
The Publication of socio economic booklet ( September 2005)

20. Way forward continued
The DPE is discussion with SOEs toward common framework in addressing the skills shortage of the country particularly in technical fields.
Review procurement policies of SOEs to leverage investments spend to promote SMMEs, BEE and youth, people with disability and women empowerment

21. The end
Thank you