The Road Freight Association has warned businesses of the potentially devastating impact of the government’s proposed new B-BBEE transformation score card for the transport industry.
RFA representative for labour relations, human resources professional, Graeme Barnard, highlighted major concerns with the new codes under the Broad-Based Black Economic Empowerment (B-BBEE) Act 53 which he said could potentially impact the ability of businesses to continue operating in the sector.
Barnard, speaking to transport sector leaders at the RFA’s 50th anniversary conference in the central Drakensberg in KwaZulu-Natal at the weekend, delivered a scathing critique of the proposed transformation scorecard, warning that there was no transition period envisaged for the potentially destructive rules.
He said the proposed changes represented a dramatic shift from current requirements.
Black ownership targets would leap from 25% to 40%, with Barnard noting the current methodology is fundamentally flawed.
"These numbers are skewed by EMB (emerging micro business) owner drivers. The real ownership representation is far more complex than the proposed scorecard suggests,” he said.
According to the scorecard, management control requirements would escalate from 50% to 65%, a target Barnard described as unrealistic.
"It's like telling school children who aren't achieving a 50% pass rate that they must now achieve 70%," he said. "It simply doesn't make sense."
Additionally, the scorecard proposes:
- A 2.5% mandatory bursary allocation for black students
- No clawback clause for bursaries (students don't need to pass or complete qualifications)
- Mandatory training can be included, capped at 40% of skills development spend
- A mandatory 30% investment in a transport-specific development fund
- Black-owned supplier target increased from 50% to 60%
- Women-owned supplier target reduced from 30% to 20%
Barnard said companies currently spending around R660 000 on skills development could see costs balloon to R1.8 million.
“We have to push so many people through learnerships. Again, those people don't have to pass the learnership. They don't have to get the qualification. But as long as you send those people through the learnership, if you can prove that there was a bum on the seat and an invoice that you paid for it, you get your points. How does that justify or equate to a substantive process in terms of empowerment?
He said the draft scorecard introduced punitive measures that could devastate businesses. For example, if a business employs foreign drivers over a certain percentage of its workforce, it will get no points for management control.
“I think it is 2.4% in one of the occupational levels. So if you have 3%, as an example, foreign drivers in your business, you're going to get zero points for all the sub-elements of management control. So that's quite onerous. It's unsubstantiated. I can't tell you how they got to that. We weren't presented with any evidence,” he said.
According to the draft, licensing becomes contingent on 51% black ownership and a Level Three B-BBEE status.
“So if you're currently not 51%, you won't get an operator's licence. This is very similar to what is happening in the ICT (Information Communication and Technology) sector with this whole Elon Musk thing in terms of Starlink, where he's unable currently, in terms of legislation (to get a licence), because there's a 30% ownership requirement,” he said.
“And interestingly enough, yesterday they published a (Government) Gazette to say they are open for public comment because they want to review that specific ITC, and that's obviously after the Washington visit.
“They're (policy makers) also not happy in terms of those entities that issue these licences and concessions, and they say those entities are gatekeeping certain categories of people,” he said.
Section 12 of the B-BBEE) Act 53 stipulates that the code must be developed by the relevant industry’s major stakeholders, not just by anyone. He said the Department of Trade, Industry and Competition also specified that the code must be “developed and agreed upon” by major stakeholders in the industry.
“So, as stakeholders of this industry, it's up to us to develop the scorecard, right? Because it's ours, we're going to have to comply with the scorecard,” he said.
However, he added that there had been insufficient engagement with the industry in drafting the proposed codes and that the RFA and its members needed to get involved and voice their concerns.
He said only three information sessions had been held, with stakeholder input seemingly disregarded. It appeared that the two transport representatives on the charter council had failed to adequately represent industry interests.
"We need to vigorously participate in the 60-day public comment period. But more critically, we must secure a meeting with the ministry (of transport) before the draft goes to the Department of Trade, Industry and Competition and see if we can actually try and talk some sense into the ministry so that they can understand what our concerns are, and why we believe that we haven't been consulted, why we believe that we haven't been, you know, provided with substantive evidence in terms of what was presented and how this will hurt the industry at large if we go ahead with this,” he said.
“Obviously, if all else fails, we have to consider alternatives, to see what other avenues are at our disposal to try and deal with this in a constructive manner.”
He said the proposed timeline suggested that implementation could occur as early as September or October this year, with early 2026 being a more likely scenario.
