The SA Chamber of Commerce and Industry (Sacci) expressed concern on Thursday about revisions to the broad-based black economic empowerment (B-BBEE) codes of good practice.
“Sacci has identified... a number of procedural missteps during the stakeholder consultation phase,” its CEO Neren Rau said in a statement.
Technical guidance notes and a baseline study estimating the impact of B-BBEE legislation was absent, unfairly limiting comments by concerned parties.
The trade and industry department is responsible for revisions to the codes, which govern all sectors of the economy not under an industry-specific charter.
Rau said the department had chosen to bypass the National Economic Development and Labour Council (Nedlac) before submitting the document to Cabinet.
“Nedlac plays a crucial part in finding a negotiated solution to policy that affects the economy.”
The department's grounds for doing so - that regulations need not appear before Nedlac - were problematic.
According to the draft codes, some empowerment facets would be classified as priority elements, including ownership, enterprise and supplier development, and skills development.
Companies would be required to meet 40 percent of the targets for these elements, or face a downgrade in their empowerment status.
Rau said a Sacci survey of 91 businesses employing more than 7300 workers showed the proposed 40 percent threshold penalty scheme would impede 78 percent of businesses from improving their empowered status.
While 47.3 percent of businesses had achieved an empowered status of level four or higher, the proposed changes to the minimum point score would shift almost 70 percent of the sample to level five or below, said Rau.
A level four empowerment status allows companies to be treated as a wholly black-owned company for procurement purposes. -Sapa