The Information Technology Association (ITA) has responded to the government notice of a proposed ICT sector code by recommending that the ICT sector remains on the current DTI codes.
According to the president of the ITA, Chose Choeu, the ITA has made many recommendations to government concerning all aspects of the proposed industry codes. Many of these recommendations are positive for the sector. For example, in skills development, the ITA has proposed far-reaching changes, which will align the sector to international best practices and e-learning concepts.
The ITA finds that many of the draft ICT codes chapters were incorporated into the DTI codes. “Our industry has long adopted the DTI Codes of Good Practice, and many of our members have made significant strides in complying with the codes,” says Choeu.
The ITA, the largest IT association, was not involved in or consulted with in any meaningful way in the ICT charter drafting process in the last five years.
The charter also does not address job creation despite this being a significant national requirement.
However, the ITA believes that certain clauses contained in the draft sector codes are anti-transformational and creates favourable conditions for larger companies. “The draft charter recommends that any company enjoys favourable terms if the equity investment in it is larger than R7.5 billion. This is arbitrary and no research has been undertaken or published for industry comment,” says Choeu in a draft proposal to Minister of Trade and Industry Rob Davies.
“The ITA, which represents the interests of its members, cannot justify that this clause operates in our industry,” says Choeu. Assuming the value of a very large company is R100 billion today, this would imply that R7.5 billion is the equivalent of 30% empowerment. The loss of empowerment to black people in South Africa would therefore be R22.5 billion. This approach would represent effective disempowerment. No specific timeframes are required to correct the imbalance in shareholding. As the R7.5 billion is capped, the effective BBBEE percentage ownership of the company would erode over time.
“The ITA believes that this approach would represent effective disempowerment, and no specific timeframes are required to correct the imbalance in shareholding. We recommend, accordingly, that the legislation regarding BBBEE remain as per the existing DTI codes,” says Choeu.
Issued by: Office of the Information Technology Association of South Africa
PO Box 6697
Halfway House
1685
Tel: +27 11 312 3040
Fax: 086 693 3783
Web site: www.ita.org.za
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