The ICT empowerment charter should not be as easy on foreign-owned companies as the newly-released financial services charter has been, because this could be unfair to local companies, says ICT charter chairman Dali Mpofu.
Mpofu says placing the burden of black equity empowerment (BEE) targets solely on South African firms would prejudice them unfairly against their foreign-owned counterparts.
He was commenting on this week`s release of an empowerment charter for the financial services industry, which some hope may provide a clue of what`s in store for a similar document for the ICT industry.
Local offices of overseas companies have been watching the unfolding of an ICT charter with concern, with some being quite vocal against local equity participation at the ICT charter indaba held a month ago.
Alignment needed
The financial services charter is the first of the industry-specific charters to be drawn up since the promulgation of a law setting guidelines and definitions for accelerating participation and ownership of historically disadvantaged people in SA corporations. It is also the first charter to be drawn up by an industry following the fuss created when government drew one up for the mining industry about a year ago.
"The financial services charter impacts directly on the ICT industry, as that is where about 40% of the financial industry`s procurement takes place. So the two charters must be in alignment," Mpofu says.
The financial services empowerment charter exempts foreign companies, saying that "those companies that have a global policy that precludes local ownership will be exempt".
Mpofu says this is too simplistic and that the ICT industry would examine "equity equivalents", or policies by foreign-owned companies that would include an alternative set of rules that would include such factors as only doing business with black-owned companies.
Recognising constraints
Gordon Frazer, MD of Microsoft SA, says the financial services charter is encouraging in the way it deals with the multinationals, but he feels there are still many ways that those companies can make a meaningful contribution.
"I don`t want the multinationals to be let off the hook entirely. I just think we have to recognise some of the constraints placed on us by our shareholders."
Frazer says the "equity equivalents" can be judged in various ways and could include donations to training institutions and the possibility of supporting ICT clusters that would foster "real innovation and growth".
Martin Vergunst, MD of Computer Sciences Corporation (CSC) in SA, says the exemptions the finance sector charter offers multinationals did surprise CSC and he is waiting to see how the ICT charter will now address multinationals.
However, Vergunst says the financial services charter did offer an example through realistic ownership timelines. "Delaying target dates for increased black ownership until 2010 acknowledges that it takes time for credible black entrepreneurs to acquire the necessary financial muscle and experience to take a meaningful and responsible share of equity."
Greg Reis, MD of Business Systems Group, which is 40% owned by black economic empowerment group HCI, says the main difference between the financial and the ICT industries lies in the formal structure of the financial industry.
"Perhaps the much-needed regulation of the ICT industry and the appointment of an industry ombudsman could be the prerequisite in order to establish the 'finite` set of 'licensed ICT` organisations, to which an ICT BEE charter could apply. It, however, should be approached in such a way so as not to stifle the creativity and entrepreneurship so often found in this industry," Reis says.
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