A measurement process for quantifying the progress towards real commercial equity

• Main Author: Cilliers, Michelle
• Published: 2011
• Subjects: Affirmative action programs; Industrial procurement
• Online Access: http://hdl.handle.net/10210/4055

M.Comm. === Affirmative action has been greatly debated as a means of righting the injustices of South Africa's past. Its proponents claim it to be an effective way of providing opportunities to those falling under the definition of previously disadvantaged, while cries of "reverse discrimination" echo from those vigorously opposed to it. One of the ways in which empowerment can be achieved is through encouraging government and businesses to make use of affirmative companies in the procurement of day to day goods and services. The first initiative from government came in the form of the Ten Point Plan from the Departments of Public Works and Finance. This was later encapsulated in the Green Paper on Public Sector Reform and the "Resource Specification for the Targeting of Affirmable Business Enterprises". This allowed businesses quoting for government work to score themselves against certain criteria, viz. either by virtue of their being affirmable business enterprises (ABEs), which are two thirds owned by previously disadvantaged individuals (POls), or by entering into joint ventures of various kinds with ABEs. It is believed that the approach of basing a company's contribution to affirmative procurement purely on two-thirds ownership is limiting, and that more aspects need to be investigated to determine the level of empowerment a company is offering its employees. In addition, the high percentage ownership is a temptation for companies to engage in fronting, where token appointments are made and there is no true management or control by the company's PDI management. Subsequently it is vital that alternative approaches be taken. Corporations need to keep track of their spend with PDI owned companies, but need to know how to determine how effective these are in implementing to true economic empowerment.