ICT companies can expect to drop an empowerment level from the beginning of May, as the more onerous requirements of the amended broad-based black economic empowerment codes come into effect.
This is according to Inforcomm CEO and industry commentator Andile Tlhoaele, who this morning addressed a Media, Information and Communication Technologies Sector Education and Training Authority roadshow. "Depending on what you do between now and May, your score will drop by a point."
Under the new broad-based black economic empowerment (or generic) codes, skills development, equity ownership and enterprise development have been made priority sectors. As a result, companies that turnover more than R50 million a year need to achieve at least 40% of the points available under each of these categories, or they will fall an empowerment level.
Yet, said Tlhoaele, the ICT sector will be harder hit than companies that fall under the generic codes because the ICT charter has not yet been aligned with the new generic codes. The ICT charter, which had been almost a decade in the making, was finally gazetted with immediate effect by trade and industry minister Rob Davies, in June 2012.
Tougher targets
Tlhoaele noted the ICT charter only gives companies a potential 17 points if they tick all the skills development boxes, which makes it harder to hit the subminimum 40% than it is for companies that fall under the generic codes. This, he explained, means companies that are not able to improve their skills development in line with the pending codes will drop a level, a situation he sees as inevitable.
The charter can be aligned with the new codes, which is likely to see the available points increased, but this has yet to happen, Tlhoaele pointed out. He added the charter will have to be amended as it can no longer be scrapped because it has been in effect for almost three years.
In addition, said Tlhoaele, the amount of money that needs to be spent on training black people, to achieve the available points, doubles. He added ICT companies can also no longer claim for all training of black people - a category that includes African, Coloured and Indian races - without taking demographic populations into account.
From May, spending needs to be spread out so that it matches the economic active population (EAP) of the province in which the country operates, or the national profile if that is the case, noted Tlhoaele. EAP refers to the percentage of each demographic within a province or region.
Tlhoaele also noted the days of being able to earn points on training any skills are over, because the amended codes require that training be done in accordance with the sector's priority skills list. Previously, any training done by the sector could be claimed for.
For the past few years, the sector has gotten away without regard to the priority skills requirement, because there was no list, but this will no longer be the case and a list will have to be developed, said Tlhoaele.
"We need to do more; we are probably going to have to do things differently."
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