Tuesday, July 15, 2008

Eskom Report Confirms Failure of BEE

Independent Online published the findings of a new Eskom report investigating the reasons for Eskom's failures. Of course with any such report you have to ask yourself on what authority the reasoning is done. Just because a recommendation is made or blame is laid doesn't somehow stamp finality on it. We still need to examine the logic used and the evidence presented.

BEE is a hot issue, and my experiences with blogs that discuss these topics has shown that the discussion can get distinctly race-based. While an unfortunate side effect of apartheid is that we're still tolerating race-based legislation, for one group to want zero bias when they had benefited from previous bias leaves you sitting uncomfortably.

Frankly, we're all well aware that apartheid prejudiced the development of certain race groups and that there is a backlog to make up - what really sets the views apart is how we move forward from here.

The key issue I want to address here is skills development - the very crux of BEE, its engine room. And here is exactly where BEE has failed. While BEE has been used to enrich some black sections of the population, that really is the sideshow. The idea was that giving someone an important role, ahead of schedule, would give them the opportunity to grow into that role and learn a skill needed for that role. Now how do you learn that skill? Where do you get it from and who teaches it to you?

There are three main forms of skills acquisition in industry: study for a degree or diploma, do personal research through books or internet surfing, or learn skills in apprenticeship. When I say "apprenticeship", I refer to any role where you work under someone for a while and then take over when you are ready. If you have any business or industry experience, you'll know that this is probably the leading form of skills development. And yet, that system is bypassed by BEE.

There are two results of the BEE system. Firstly, the ones who need to learn the skills are in authority over the ones they need to learn the skills from. But who ever wants to learn from a junior? It rarely works in practice. Secondly, those who do have the skills and have now been shunted pack up their bags and leave, and take their skills with them - there is no transfer. Eskom will testify that this has happened, and several departments like Public Works are experiencing exactly the same.

The end result is huge. Very little skills development results in badly run business, failed projects and bankruptcy. BEE benefactors are placed in senior positions, companies struggle, and the very people that should have been enriched are now in failing operations and bearing the brunt of criticism.

Let's paint a different scenario. Those without skills go through the proper apprenticeship process and when they are ready they are promoted and get a good new salary. The business stays strong. The former BEE benefactors do get the promotion, in the longer term, and when they do, they carry out their function in a sustainable business.

Simply put, BEE is short term and apprenticeship is there for the long term. No surprise then that BEE has benefitted a few but leaves the majority short. For this reason, the ACDP believes it is time for the sunset clause on BEE, so that the very objectives of BEE can be attained: skills development, leading to long-term, sustainable wealth. The 10 year turnaround that the ANC envisaged was never realistic and it's time to recognise that the South African skills problem needs a longer term solution that promises less and achieves more.

The IOL report can be read at: http://www.iol.co.za/index.php?set_id=1&click_id=13&art_id=vn20080715120929767C145654

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DISCLAIMER: This blog serves as a commentary and the views presented are not necessary the official views of the ACDP. For official statements and contact details, visit: www.acdp.org.za