AFRICA BUSINESS NEWS

BP Southern Africa continues its commitment to transformation

Posted on 01 December 2014 by Africa Business

BP Southern Africa (BPSA), one of the oldest companies operating in South Africa for over 90 years, has completed a major Broad Based Black Economic Empowerment (B-BBEE) transaction with two new BEE investors, as part of its continued commitment to meaningful transformation in the country.

BPSA’s commitment to transformation dates back several years.  In 2001 it became one of the first companies in the petroleum sector in South Africa to implement a BEE transaction with the Mineworkers Investment Company (MIC) and WDB Investment Holdings/WDB Fuel (WDB).

BPSA’s previous ownership structure was advantageous to both BP and the former BEE shareholders.  However, consistent with BEE legislation changes, BP has deepened its equity ownership structure to ensure a greater balance between economic and voting interest, which BP believes provides more sustainable transformation for the future.

BPSA has sold 25% + 1 share to two BEE partners, namely KAPELA and the BPSA Education Foundation, a Broad Based Black Economic Empowerment Trust.

The Kapela BEE consortium includes the Disability Empowerment Concerns Trust, which is a majority black  broad based trust with over two million people with disabilities as beneficiaries (at least 85% are black and 50% are women), as well as a majority black owned and managed private equity firm.  Kapela acquired a 20% +1 share and the BPSA Education Foundation acquired 5% of BPSA’s shares.

Mr Israel Skosana, Kapela Executive Chairman says:  “We are excited to be a shareholder in BP South Africa.  The acquisition of 20% + 1 share is a significant investment for us.  We are looking forward to partnering with the BPSA Education Foundation as shareholders, other members of the board of directors and management of BP South Africa in creating value for all relevant stakeholders. Together we can continue to contribute towards the socio-economic transformation of our beloved country. Ms Fatima Abrahams and I will be on the Board of Directors of BPSA”.

The transaction was concluded after a competitive process where every bidder was treated in a fair and transparent manner.  The partners (MIC and WDB) were invited to participate in this process and during this time elected to extract value from their existing investment, enabling BPSA’s new BEE structure.

Mary Bomela, Chief Executive Officer of the Mineworkers Investment Company (MIC), noted: “Our sale of equity in BPSA was motivated solely by value considerations.  We have been invested in BPSA for over 10 years, and the relationship between BPSA and MIC has been mutually beneficial and remains affable. Our investment in BPSA has consistently performed to expectations. BPSA is a dynamic business with strong management and good future prospects. We wish the company and its new partners well in its future endeavours”.

Thandi Orleyn, BPSA Chairman, says:  “BPSA has a measurable track record in Broad Based Black Economic Empowerment and the announcement shows our continued commitment to South Africa’s transformation agenda and progress made in deepening various parts of our transformation.”

Through the BPSA Education Foundation, BPSA will contribute in meaningful and sustainable ways to enhance the standard of living and improve the well-being of previously disadvantaged, specifically black women and people with disabilities, through education and skills development.  This aligns with BPSA’s existing Community, Social Investment (CSI) as well as Skills Development programme.

Within Skills Development BPSA has established a progressive partnership with Wits on a Targeted Talent Program (TTP) and is investing R105 million over five years with R15 million spent in 2014 alone to enrich the lives of just under 1,000 students.  At its core, this enrichment program identifies talented pupils in underprivileged rural areas and guides them through specially developed engagements over a long term period (2 – 3 years) to prepare them for their final matric exams and for transition into the University environment.

The program has already produced some of South Africa’s top matriculants with 900 more pupils expected over the program’s 6 year run.

Source:   BP South Africa

THE NEW AGE NEWS

Bring BEE closer to the poor 

THANDISIZWE MGUDLWA       The New Age | 4 Sep 2014

       

An area which regrettably does not get the attention it deserves, is the question of economic transformation and development, in the context of the Black Economic Empowerment (BEE) policy, aimed at uplifting historically disadvantaged people.

One thought it wise to explore this very important subject and attempt to deepen the debates, discussions and dialogues which must lead to the grass-rooting of BEE framework. 

The commission definition  of BEE is, "It is an integrated and coherent political process. It is located within the context of the country's National Transformation Programme, namely the RDP (Reconstruction and Development Programme). It is aimed at changing the imbalances of the past by seeking to substantially transfer and confer ownership, management and control of South Africa's financial and economic resources to the majority of the citizens. It seeks to ensure broader and meaningful participation in the economy by Black people to achieve sustainable development and prosperity."

With that, it would be worthwhile to look at what is preventing South Africa from its mission of renewing itself from the tyranny of colonial oppression and apartheid, considering that 60% of the 51 million our citizens still languish in poverty and underdevelopment 20 years after the end of colonial rule.

As a fact, the legal equality of all South Africans was achieved with the end of Apartheid in 1994. However, the elimination of the aftermath of the former social and economic discrimination of Blacks, Coloureds, Indians and Chinese has yet to be realised.

In order to promote and accelerate the economic equality of the Black population, the post 1994 democratic government devoted itself to the politics of BEE, which in 2003 had broadened into Broad-Based Black Economic Empowerment (B-BBEE), in effort to reach the majority who did not benefit from BEE.

Fundamentally, BEE as an economic development strategy, ensures that there will be no area in the economy, which will not be affected by B-BBEE.

Also important to remember is that an integral aspect of the apartheid project was the planned and deliberate exclusion of non-whites from the mainstream of the economy.

Moreover, Blacks were selectively hampered to achieve self-employment

and to establish own enterprises, with a large majority of Blacks settling in the so-called 'Homelands'.

It has been the declared goal by BEE proponents to actively integrate Black entrepreneurs into the private economy via the transfer of company ownership, management and control functions.

And in order to implement these goals, and to make them measurable, in particular, the legislator introduced Black Empowerment Scorecards.

Notably, these elements have already begun and will gain even more importance in the coming years.

To its credit, the post 1994 democratic government demanded a coordinated strategy in regards to BEE in the mid-1990’s.

And in 1998, the BEE-commission was established to meet these stated demands. It was its task to develop a commonly accepted definition of  BEE as well as proposals of methods for restructuring.

BEE archives can confirm that even though the government had already previously enacted multiple laws to reduce the unequal treatment in the economy, a coordinated and holistic approach with regards to BEE was lacking.

An in October 2000, the BEE-commission presented its final report. This report was the basis for the government’s strategy paper, which was published three years later.

The legal foundation regarding BEE was created in January 2004 as the Broad-Based Black Economic Empowerment Act came into being.

According to many BEE stakeholders, this law replaced, reformed and coordinated the previously enacted laws and support programs. The exact description of the law’s regulations and the relating actual provisions for the implementation in practice took place via conduct guidelines in particular.

The government defines BEE as, "An integrated and interrelated socio-economically process, which contributes directly to the economic restructuring South Africa’s and to a significant rise of the Black proportion who will lead, control or own companies within the South African economy. Furthermore, this process shall lead to a significant decrease of income differentials."

It must also be noted, that the term “Blacks” according to the prevailing legal framework includes all Blacks, Coloureds and Indians as well as Chinese.

This  has  changed with the recent amendments of the  Codes of Good Practice in 2013 in favour of a more exact definition differentiating between gender and specific ethnic groups that used to be treated the same under the old term definition. 

People living with disabilities also form part of this.

The BEE strategy still aims to achieve the following goals by 2014, "A significant rise in the proportion of Blacks as owners and managers of existing and new companies; a significant rise in the number of Blacks in executive positions, a rise of Blacks’ capital share in companies; the increase in Blacks’ share in factors of production, for example land; the expansion of economic activities in underdeveloped areas; expedited economic growth available equally to all segments of the population; and the increase in the level of income for Blacks resulting in the reduction in income differentials."

Essentially, the concept of Direct Empowerment in terms of BEE comprising the ownership of company shares and voting rights as well as the right of participation in management and therefore in corporate governance.

In this context and in consideration of direct empowerment, the possibility of participation of Black employees needs to be mentioned. Instead of having outsiders participate in businesses it is often in times preferred to have the own employees participate in the company.

However, this does not take place via the transfer of employee shares but via the creation of a Employee Share Ownership Scheme (ESOP) in form of a BEE Employee Trusts (BET).

Companies ought to comply with the guidelines of the Employment Equity Act. This law was enacted in order to employ an amount of Blacks in all business areas and in all levels at comparable work and income terms according to the composition of the population within a specified point in time.

The South African National Government has introduced multiple programs for advanced training and support for Black employees in order to reach this goal and to improve the rather low level of training.

A company will be awarded with up to 20 points on the scorecard, if it actively promotes advanced training of its employees within the framework of the official Skills Development Programmes. And such programme have been drafted by a Skills Development Facilitator as well as been approved by the respective Sector Education & Training Authority (SETA).

For example, 2% disabled people ought to be employed in order to collect 2 of the possible 15 points from this area. The majority of the points  is awarded by reaching the targets for Blacks in various management levels.

Please note, that full points are only awarded if an approved Workplace Skills Plan has been approved by the respective SETA prior to the financial year measured.

Further, the Black empowerment element preferential procurement has under the new Codes 2013 been included in the newly amalgamated element “Enterprise and Supplier Development”.

Therefore, debates, discussions and dialogues must continue to rally all stakeholders towards national consensus and action.

Thandisizwe Mgudlwa writes for AfricaBusiness.com 

SOURCE: THE NEW AGE

BUSINESS DAY NEWS

Business / Financial Services

Kagiso Capital’s R1.5bn initiative

BY PHAKAMISA NDZAMELA, 13 MARCH 2015, 06:19

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Picture: THINKSTOCK

KAGISO Capital, a newly created investment company fully owned by the charitable Kagiso Trust, plans to raise between R1bn and R1.5bn in debt this year to make investments and build up the business.

Kagiso Capital CEO Kgotso Schoeman said the company was working on making an investment in one of the companies in the education sector, but could not disclose which one.

Kagiso Capital also wants to invest in private healthcare and the food sector.  Well-known companies in the education sector include Advtech, Eduloan and Curro. The PSG-owned Curro already has a black economic empowerment (BEE) partnership. This leaves Advtech and Eduloan as potential partners.

On its website Advtech notes that it has not undertaken a specific ownership empowerment initiative but has facilitated the creation of an empowered recruitment enterprise. Eduloan could also do with a BEE partner.

The PIC, which invests largely on behalf of the Government Employees Pension, has taken a 40% stake in the education financier. Mr Schoeman said the Kagiso Trust is transferring its balance sheet with an asset value of more than R7bn to Kagiso Capital.

Mr Schoeman said Kagiso Capital’s investments comprised of KTH, FirstRand and Onelogix. He said there was no intention to exit KTH as the investment generated dividends used to pursue developmental initiatives in education.

Kagiso Capital is the second investment company that Kagiso Trust has created.

In 1993 it created Kagiso Trust Investments but this merged with Tiso Group in 2011 to create Kagiso Tiso Holdings (KTH), one of the largest black-controlled companies in SA. "We are hoping to leverage about R1bn. We definitely want to go to DFIs (development finance institutions).

"They may be keen to help us looking at the work that we do," Mr Schoeman said.

Kagiso Trust chairman Reverend Frank Chikane said the vision was for Kagiso Capital to extend the work done by the Kagiso Trust. The dividends of about R50m that Kagiso Capital generates from KTH will go straight to Kagiso Trust, Mr Schoeman said.

SOURCE: BUSINESS DAY
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NEWS24

Zuma considers opening land-claims dating back to the 1800s

By News24WireMarch 3, 2016

 

Should the 1913 cut-off date for land claims be changed to the 1800s?

President Jacob Zuma raised the question as he opened the National House of Traditional Leaders in Cape Town on Thursday.

“The very law that we have today to claim is lopsided against the black people. It is very difficult to prove that the land belonged to the ancestors and very easy to say we can’t have the land. That’s how the law is.”

“Was the decision to make 1913 the cut-off date correct? Perhaps yes. But was the land taken in 1913?

Most of the land was taken in the 1800s. Very little land was taken after 1913. This was when the colonialisation of South Africa was consolidated, he said.

He added later that he did not care if people called him names over his statements.

Zuma said that the 1913 Native Land Act, which banned blacks from buying or renting land, was merely about white colonialists shoring up whatever fertile land they had not yet claimed for themselves.

“I could forgive the period before [the 1800s]. It would be reasonable,” he said to murmurs of approval from the royalty and high chiefs assembled before him. “The dispossession of land is the source of the poverty and inequality which have become the ugly hallmark of our nation and an impediment to the future of shared prosperity.”

He quoted former ANC secretary general Sol Plaatje, who wrote that when the Land Act came into force, black men went to sleep owning land, and woke up being worse off than slaves.

Zuma said: “I believe as a son of a black man, and a black man… that we need to shift that cut-off date. But we need to find a reasonable way of addressing the issue. Within the Constitution, within the law. But look at the facts. Where do these people in informal settlements come from? Where is their land? Is it a lie that their land was taken?”

Souh Africa reopened its land claims process in 2014. It would run until June 2019. Every week, new claims were gazetted. On February 23, the National Assembly passed amendments to the Land Expropriation Act. They make matters clearer, including the administrative processes involved and the land owner’s rights.

Zuma’s comments come at the same time as some student organisations tear down symbols of colonial era lawmakers and soldiers and tell white people that their forefathers stole land in South Africa.

The EFF has also made land redistribution one of its top priorities.

In the National Assembly on Tuesday, FF Plus leader Pieter Groenewald said Zuma’s comments about land, which he made at the ANC’s birthday celebration in Rustenburg in January, were against nation building, and racist.

Groenewald reacted when ANC Chief Whip Stone Sizani stood up to say that the land was taken at the barrel of a gun.

Zuma said last year he urged traditional leaders to join efforts in claiming land, rather than lodging competing claims. He said he looked forward to debating his address in Tshwane on March 22.

News24