Divisions within the ICT empowerment charter steering committee could spell the end of the road for the long-awaited ICT charter.
The industry failed to reach consensus in a key meeting held yesterday on the draft ICT Sector Codes of Good Practice on Broad-Based Black Economic Empowerment.
A source close to the committee states divisions are running deep in the committee and that the chairman, Norman Munzhelele, now has to report the failure of the meeting to the communications minister.
According to the source, more than 50% of the committee opposed the proposed sector codes and the process has now completely broken down.
The source also states the communications minister is likely to be disappointed by the industry's failure, saying she had expressed hope that the sector codes could be adopted while she was still in office.
In November 2008, trade and industry minister Mandisi Mpahlwa announced that soon six charters were to be gazetted as sector codes - with the ICT charter as one - but this seems unlikely to happen.
In January, the sector codes were returned to the committee and Munzhelele noted he was “confident” the issues could be resolved and the codes returned to the Department of Communications (DOC) in February 2009.
The failure to resubmit the draft sector codes could result in the industry being forced to adopt general sector codes.
No consensus
In January, ITWeb reported that the draft ICT sector codes had not been gazetted and had been referred back to the industry by the Department of Trade and Industry.
Munzhelele stated the codes were referred back over two issues - namely ownership and social investment clauses.
The DTI's Broad-Based Black Economic Empowerment Codes of Good Practice and the previous draft of the ICT charter both stated that 30% of a company's ownership had to be in black hands. The last draft of the steering committee recommended there should be a R7.5 billion cap on ownership, which would lower the barrier of entry for BEE companies. This clause would see deals with a value of at least R7.5 billion being considered to be in compliance with the codes.
The DTI returned the proposed codes requesting economic rationales for the ownership clause.
Munzhelele also stated the committee needed to iron out issues regarding social investment programmes - but said this was a “minor” issue which could be resolved quickly.
Constant delays
In May 2005, the steering committee handed over the first draft of the ICT BEE charter to the DOC after a two-year process. Previous hopes that the charter would be in operation by 2005 were dashed as the process continually suffered setbacks.
Also in 2005, the DTI finalised its Codes of Good Practice and stated that, once these were finalised, key amendments were to be made to the draft ICT BEE charter so as “to ensure alignment and harmonisation”.
The adoption of the ICT BEE charter stalled as the steering committee waited for the complete DTI Codes of Good Practice to finalise the ICT charter.
In 2007, the ICT BEE charter was finalised again and submitted, and was referred back by the DTI for consideration. In February 2008, Mpahlwa stated his department still had not received the charter and that the committee had missed the 9 February deadline.
Related story:
ICT charter wait continues
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