Rush, rush but the scorecard must be changed!

TNW has been criticised for suggesting the work of the BEE scorecard steering committee must have been done by people out of touch with the reality of running small businesses and who have not shown enough imagination. There are three working days left for submissions. TNW published this article in the edition being printed today. Comment follows. THE recent comment in TNW on the content of the BEE scorecard has been called alarmist by the Tourism Business Council of South Africa (TBCSA). Spokesperson Ntsiki Mpulo says that certain issues need to be clarified: “The initial targets (2009) set by the steering committee match those recommended by the DTI and used by the mining and finance sectors. “The 40 % target for 2014 has been proposed on submissions from industry members. “Industry-specific targets have been set at 50% for preferential procurement and 1% on community tourism, heritage and conservation projects - which is hardly something to ignore (in response to our call for greater industry specific target emphasis). “Ownership is not the most important criterion set out by the committee. You will see that skills development has been weighted at 20 % in the first five year period while ownership is 15 %.” (This reverses in 2014 when ownership does become the most important). Our response on the scorecard TNW maintains that the first draft is unworkable. We hope that the unseemly shortness of the consultation period (less than a month), will be enough to render input from a now-alerted sector. The deadline for submissions is 1 November. Changes we would like to see include ownership being relegated drastically in importance. Unlike the mining and finance sectors the majority of travel agency companies are small. On the inbound side SA Tourism’s recent competitive study says that there are over 800 tour operators but fewer than ten large players, which account for 60-70 % of turnover. TBCSA points out that ownership is not the only way to earn points. But then why has the target been set so high and been made the most important criterion? It is relatively simple for a listed mining company or bank to attract investors, but almost impossible for a small family business. Another indication that more thought is needed: Getting black procurement points (40% target) will be easy though, if SAA is regarded as a compliant supplier. Further, every Rand spent with SAA will also buy you points for 40 % local content. This has now been raised as a concern and will be addressed by the steering committee, say the TBCSA. Rather than enriching a few this scorecard needs to address the issues as to why there are so few black faces at Satsa and Asata meetings when operational managers gather. A shortage of skills, lack of travel and tourism background and an inability to access finance, combined with the unattractive margins in the industry - these are the main hurdles. The first three should be the most important criteria addressed by the scorecard. When people are effective in operations they will naturally gravitate to ownership. Last word: Stop the exercise now if the process enriches only a few. Forty percent of businesses will be given away for nought. BEE policy is to INCREASE the numbers of blacks with ownership and control. Tourism should set the standard by excluding individuals with more than two directorships or who effectively have shares as individuals in more than two companies from earning points for companies. That will focus us on real empowerment. David Marsh Reply to the editor using the button below.