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For Sibusiso Maphatiane, meeting the government’s broad-based BEE targets is not enough — you have to go beyond them.
According to the “2022 Sanlam Gauge Report”, the second edition of the annual survey that tracks the extent to which the private and public sectors are meeting BBBEE targets, on average businesses are achieving only 87.16% of their goals.
This would come as no surprise to Maphatiane, whom President Cyril Ramaphosa recently appointed to the BBBEE advisory council, which advises the government on the transformation of the economy.
The Sanlam report, released in July, identifies “management control” as the category in which business is doing worst — as was the case last year — achieving only 55.9% of the targets.
Socioeconomic development stands out as the category in which business is doing best, scoring an average of 160% of its targets — though in some cases companies just threw money at the problem.
Maphatiane got involved in empowerment because he “couldn’t stand outside the fence and throw stones” at the advisory council for not ensuring that BBBEE became a reality. “I told myself that I needed to intensify my contribution to this cause by taking up a leading role.”
He started out as an accountant before getting into the steel industry, and is now head of Naledi Inhlanganiso (Naledi), a 100% black-owned group.
Maphatiane tells the FM that the government’s BBBEE policy does not go far enough to redress past injustices for many black people. “I needed to do something to change things for the better.”
He says the BBBEE requirements are not ambitious enough. On a government tender up to the value of R50m, BBBEE points account for 20% of the total, he says. “For tenders exceeding R50m, the BBBEE scoring points are 10%. If we say this programme is a very important policy to empower the previously disadvantaged, how do we achieve that with the 10%?”
Maphatiane says he agreed to serve on the council because of how people “trivialised” BBBEE. “I told myself that my contribution must not be on a theoretical basis. Having been in this business for more than 10 years now, I have seen how government policy on BBBEE gets trivialised.”
As an example, he cites government tenders for renewable energy projects that stipulated minimum levels for local manufacturing content.
“One of the institutions contacted me regarding a participating company that requested exemption from local content requirements. Specifically, this request was for permission to import steel flange components based on non-existing local manufacturing capabilities,” Maphatiane says.
I know of at least three companies in SA, including Naledi, that have the capability and capacity to produce these components
“I know of at least three companies in SA, including Naledi, that have the capability and capacity to produce these components.”
He says the company in question was showing disrespect for BBBEE by looking for loopholes and ways to get around it. “They will import parts and make a higher profit because the price they need to pay here might be a little bit steep compared with the Asian countries. These are the kind of things that some of us experience.”
It’s not only business that is in Maphatiane’s sights. He says in many instances state-owned enterprises fail to comply with the policies and regulations. “If government institutions do not take the BBBEE policy seriously, how do you expect the private sector to?”
Maphatiane has a long history in the steel industry. In 2012 Naledi, through a consortium that included the Industrial Development Corp, acquired a majority stake in the then listed Dorbyl. The only operational division in Dorbyl at the time was Guestro Automotive Casting & Machining in Benoni.
Guestro is now Naledi Foundry, which produces steel, grey iron, spheroidal graphite and high-chrome iron castings for local and international customers in the automotive, valves, earthmoving, rail, infrastructure, mining, transport and power-generation sectors.
Naledi Ringrollers in Vereeniging makes seamless forged-steel products, supplying rail, petrochemical, civil engineering, power-generation and medium-to-heavy engineering markets. It exports forged railway components to more than 43 countries.
Maphatiane, who has a BCom Hons, began his career in 1985 as an accounting teacher in Soweto at Mncube High School. He joined Vista University as a lecturer. In 1996 he was appointed FD at the SA Revenue Service, where he was instrumental in introducing the first black accountants.
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Published by Arena Holdings and distributed with the Financial Mail on the last Thursday of every month except December and January.