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Dealing with diversity
by Maryke Hörstmann
BEE is a growth imperative BEE should be viewed as more than a government's way to rectify past injustices. It is an economic growth imperative. So said Gavin Pieterse, chair of the South African Wine Industry Trust (Sawit) at the Wine Cellars South Africa (WCSA) congress held in Stellenbosch. South Africa forms part of SADC (Southern African Development Community), which constitutes 156 million people, yet constitutes only 2% of world trade. This participation in the world economy, says Pieterse, can be improved by implementing our BEE policy. "We must understand the growth imperative. We must focus on that 2% and improve it." BEE today "When the ANC first came into power, it had the opinion that the markets would correct itself. That didn't happen. Under president Thabo Mbeki's governance, government began to feel the pressures from outside. Government realised it must intervene and economic empowerment of blacks must be written into legislation."
If you want to play with the big boys, you'd better transform. The BEE Act gives a guiding framework, giving sectors a "track to run", in order to have everyone play by the same rules. It is important to note, however, that it is non-descriptive, allowing the industry to set its own viable timeline, targets and strategies. And while no-one is forced to employ a BEE strategy, Pieterse stresses that the pressure for non-compliance will be on if one has to compete with entities that has gone the BEE route. In other words, if government has to award tenders or supplier agreements and one contender has its BEE strategy in place, who's going to get the contract? "Where government has some kind of leverage in awarding licences, concessions or tenders, they w¡ll look at your empowerment score in making their decision." The plan It is aimed that by 2014, South Africa will see "effective black participation" in the region of 35%, with the average household income doubled and extreme poverty drastically reduced. "Effective participation" would be judged by ownership, skills, asset control and income. Industry-specific targets and indicators include:
The wine industry's contribution to this aim of government comes in the form of the Wine BEE Charter Process, started in November 2003 by Sawit, with the support of the SA Wine and Brandy Company (SAWB). "It is the best compromise we could come up with." The Charter falls within the broad organisational framework already set. "We're not trying to re-invent the wheel here." The timelines set are to be linked with government's ability to roll out the codes. The core elements of the Charter will be:
These four elements will form the four components of the Balanced Scorecard, with each element as a set of prescribed weighted targets. Land or no land? According to Pieterse, the code and the Act does not address the close link between ownership of assets and land. "Land ownership is not attractive to black people, because of the high cost. Third party payments have to be obtained and it takes long to show returns." For this reason, asset ownership will most probably be obtained further down the chain - marketing, processing, and other components. As for businesses, ownership and control can be measured in different ways, according to the BEE equity model:
It is estimated that the BEE Charter will be available later this year. ARA - social responsibility in the wine industry - Chan Makan There is no evidence yet that warning messages on wine packaging have lowered alcohol abuse. So says Dr Chan Makan from ARA (Industry Association for Responsible Alcohol Use), who gave an overview of the organisation's activities over the past year. He says that South Africa has a specific problem with warning labels, as a big part of the risk population is illiterate. ARA proposes that messages should rather be displayed at point-of-sale venues, such as bars or liquor outlets, to force potential consumers to confront the signs. ARA focuses on prevention rather than cure and targets those most vulnerable. They have an information resource base and is involved with alcohol education, policy development, research and self-regulation by advising producers on packaging, producing and selling. Makan notes the fact that no restrictive legislation has been passed against the wine industry since 1994 as one of ARA'S biggest achievements. The organisation stands in partnership with the Department of Education, the Department of Trade and Industry, sits on the Road Transport Safety Board, the Western Cape Liquor Policy Development Panel and the Fetal Alcohol Syndrome (FAS) USA/SA Consultative Forum. FAS is researched in only three countries - South Africa, the USA and Canada. Therefore, Makan notes, it may be a distorted picture to refer to South Africa as the "FAS capital of the world", as statistics for other countries are not readily available.
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