RFA gets BEE ducks in a row

A vital document in the
road transport industry’s
broad-based black
economic empowerment
(BBBEE) plans has just
gone through a government
approval procedure –
designed to table it before
the minister of trade
& industry before the
November 15 sectoral code
submission deadline.
After two of years
discussions between the
Road Freight Association
(RFA) committee and the
department of transport,
the BBBEE sector code for
the road freight industry
(the Road Freight Charter),
was submitted in July to
the minister of transport
for his approval.
“This was done,” said
Sharmini Naidoo, CEO of
the RFA, “to ensure that
the charter was submitted
to the dti in time to
prevent a lapse between
the existing and the new
charters.”
And this is a must for the
truckers.
“It is imperative that our
charter comes into effect to
prevent the industry from
having to comply with the
generic code scorecard
- which is more onerous
and not adapted to our
industry.”
The procedure the draft
charter had to follow was
that it was first submitted
to the minister of transport
(Dipuo Peters) for approval
- then submitted to the dti.
“The charter,” Naidoo said,
“will then be published
by way of a gazette with a
60-day public commentary
process.”
There was also a bit
of procedural semantics
on the scene. “It should
be noted that these
sessions were considered
‘stakeholder engagement
sessions’ and not
‘consultations’. This
means that there was
no longer a requirement
for government to reach
consensus before finalising
the charter,” Naidoo added.
“As the RFA made its last
submission in July on the
scorecard, the ‘enterprise
and supplier development
(ESD)’ element had still not
been finalised. As such the
charter was submitted to
the minister with the ESD
element being the same as
the generic code scorecard.”
And in a separate letter
to Peters, the RFA also
fully explained its case
against the ESD element –
a main part of this relating
to the near-impossibility of
the industry
being able
to comply
with the
procurement
demands.
Naidoo
pointed
out that
there were
a limited
number of
suppliers
within the
industry
that were
51% blackowned.
“A significant amount of
the industry’s procurement
spend is on the purchase
of vehicles and servicing
and maintenance of those
vehicles, all of which is
provided or dictated by
the original equipment
manufacturers (OEMs)
which are international
companies.”
A similar story is to be
found in the procurement
of fuel, oil, insurance,
finance for the vehicle
(banks) and maintenance
– all necessarily from
large companies. And
this accounts for biggest
part (over 60%) of a
transporter’s expenditure.
“The second biggest
spend in a
transport
firm is on
labour,” said
Naidoo.
“So there is
little room
to meet the
proposed
procurement
spend
targets.”
The RFA
has therefore
proposed a
graduated
phasing
of the list
of exclusions submitted
over five years - with 80%
exclusion in Year 1; 70%
exclusion in Year 2; 60%
exclusion in Year 3; 50%
exclusion in Year 4; and
40% exclusion
in Year 5.
“This to allow companies
to find 51% black-owned
companies,” Naidoo said.
“We believe that with
the relevant ED and SD
opportunities this should
be possible after five years.
INSERT & CAPTION
A significant amount
of the industry’s
procurement spend
is from OEMs which
are international
companies.
– Sharmini Naidoo