It strikes me …

Friday, 20 August, 2004
Lesley Beake
An opinion on Black Economic Empowerment ... and the way forward

Watching an industry transform itself is a bit like watching grand opera. Full of passion and drama, huge scenery changes, a lot of posturing, some bum notes, plenty of activity in the chorus, a few soloists, some boring bits between the excitements ... and a high price involved in the whole production.

Big changes in thinking and in human relationships have already taken place within the wine industry. President of the Black Association of the Wine and Spirit's Association (BAWSI), Mr Nosey Pieterse's comment on the balance of the audience (somewhat pale when he spoke shortly after the panel discussion started, but substantially redefined once the late arrivals had settled in) might be entirely justified, but a couple of years back there would have been even fewer people of colour represented in the hall, and indeed on the panel.

Mr Nosey Pieterse further noted that we were looking at an industry that has seen tenfold growth since 1994 (from 20 million litres to 220 million litres). 'To what extent has this been reflected in the lives of the people of colour who work in the industry?' he asked.

In reply the industry can only answer that there has been change in those ten years - more involvement in housing, health and education, more sharing. Is this all to be dismissed as 'soup kitchen mentality'? Is it in time, on track and up to the mark? Is it enough?

The answer is that no, it is not enough. But there is commitment to more substantial Black Economic Empowerment (BEE). The rather irritated remark from the floor when the commitment of the industry was called into question should be noted: 'We're here aren't we?'

And they were. The invitations had gone out to 150 people - 160 turned up. The door kept opening discreetly as more and more chairs were added to the lines set out in the Stellenbosch hotel where Deloitte were hosting their seminar on BEE - and how the industry should proceed with it.

BEE is an acknowledged necessity in the industry but the frustrations were mirrored in the questions from the group of very concerned and determined industry players who attended.

  •     How do I start?
  •     How do I go about it?
  •     How do I afford it?
  •     What's the blueprint?

    As Dr Johan van Rooyen, CEO of the South African Wine and Brandy Company said in his opening remarks: 'Empowerment is about growing what we have ... the question is not the willingness, it is the how to do it.'

    And BEE involves a commitment not just to token share-holding, but to genuine involvement and what Mr Jeffrey Ndumo, of the Department of Trade and Industry calls 'indirect empowerment' in the matters of social responsibility, skills development and training.

    But facing challenges that include deferred shares, equity transactions and exit mechanisms is a bit of a poser, especially for smaller businesses that don't include corporate lawyers and financial whiz-kids on their payroll.

    Michael van Wyk, partner at Deloitte's Cape Town office sees a tremendous need for information about every aspect of black empowerment and his company hosted the panel discussion, and encouraged questions, to highlight the need for a sustained (and sustainable) approach. For an industry that has exhibited such a spirited growth in such a short time, and the ability to change direction in other aspects of its business methods, this new challenge, the challenge for genuine black business empowerment, is definitely not insurmountable.

    Finding what Deloitte's legal partner, Katherine Jarvis, called: 'aspects of partnering' is something that just has to be worked at. What emerged as a consensus from all the panelists was:

  •     It has to be done.
  •     It has to be done with industry enthusiasm.
  •     It has to be done across the board, and not just in special cases.
  •     It has to be done through genuine financial empowerment and increased skills.

    And it has to be done as an integral part of everyday business, not something apart. Mr Jeffrey Ndumo said: 'BEE has to be part of your business strategy. It has to be imbedded. Discuss it within your business. Go out and get advice. Build it into your system ... but don't see it as something separate.'

    And don't (as one clever member of the audience suggested) wait and see what everybody else does and learn from their expensive mistakes. This is a growth opportunity for the South African wine industry, one from which we can emerge with dignity and respect, if we get it right. One from which we will suffer irreparable damage if we don't.

    The initiative has moved along smartly from the emotional: (people are living there) to the practical and the financial: (how do we make a real difference, where do we find the money ... and are there any tax breaks?).

    Act One is over. Act Two has only just begun ... will shortly be featuring more information on the proposed BEE scorecard, which will make possible the practical measurement of the process within the industry.