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Comments on revised BBBEE codes

We wish to bring to the attention of this committee, our observations and comments pertaining Code 700. (Page 56 3.2.2) This code pertains the Corporate Social Investment pillar of BBBEE.

Brief

Our issue lies not with the original code which requires for 75% of the beneficiaries, of an NPO/NGO to be black persons, in order for maximum BBBEE points to be scored by companies wishing to donate funds to NPO's. However, our problem is with the proposed amendments to this Code. The amendment recommendation now states; "The full value of Socio-Economic Development Contributions made to beneficiaries is of at least 100% of the value directly benefits black people.

Our issue

We wish to, in the strongest possible terms, impress upon this committee the folly of this proposed amendment and urge the committee not to entertain these changes for the following reasons.

NPO's in South Africa play a vital role in delivering a plethora of welfare related services to the vulnerable in our society. These services cover every situation including amongst others; health, education, wellness, trauma counseling, independent living, transport, HIV/AID's, access services, assistive devices, rape counseling, sport , life skills, literacy, security, old age facilities etc, etc. The list is simply endless.

With few exceptions, NGO's and NPO's don't differentiate between races when delivering services. According to the National Coalition of Social Services, representing 3000 welfare organizations, government provides less than 30% of the required welfare needs in society, while the balance is provided entirely by this sector. In other words, government relies on the NPO sector to perform the tasks that it is constitutionally obliged to deliver.

The NPO world is increasingly under great financial strain due to many factors beyond their control including; global and local financial tightening, the inconsistency and unreliability of the national Lotto, decreasing government subsidies and a growing constituency to care for.

For these recommended changes to be adopted would effectively ensure the sinking of the very sector that Government relies upon so heavily. It would require that donors apply racial auditing to ensure that only black persons could be dealt with or cared for in the non profit organisations they funded. It would mean for instance that a child who had been raped could not in fact seek care and support from rape Crisis, a funding dependent NGO, should she prove to be white. IT would mean that Life Line or Child Line would have to screen all callers first to determine their race so as not to jeopardize their funding. It would mean that South African Council of the Blind would need to ensure that no white person received attention from the fully funded cataract removal clinics it manages, or receive orientation and mobility training or a white Cane. DeafSA, Quad Para, Epilepsy SA, APD and hundreds of similar Disability organizations would, in order not to lose funding, need to purge their membership lists of all white people. The Disability Units in our Universities, all of whom rely on external funding, would need to bar any white student from benefitting from its services and facilities, in order not to lose that funding..

Naturally, however, since the above measures would be unconstitutional and therefore unlawful, few responsible organizations would entertain them, which would in turn force funders, in order that they increase their BBBEE scorecard points to seek funding opportunities elsewhere. In turn the limiting or removal of funding from these already vulnerable organizations will guarantee their reduction in services and eventual closure.

Conclusion

Given the demographics of the country, it is certain that the vast majority of NPO's have a far greater number of Black clients and constituents than white, which begs the question of why it is necessary to recommend such a demographically unbalanced and unrealistic change..

The original Code, requiring that funders, wishing to score well on their BBBEE scorecards, donate to NPO's with no less than 75% Black beneficiaries is at least consistent with South African demographics. In addition it places a strong incentive on corporates to invest, via the NPO sector, in the welfare and well being of our society which is to be commended.

We therefore strongly urge the committee to disregard the proposed amendments to this Code as the consequences will be far reaching and catastrophic. Finally, entertaining this amended Code would certainly be in contravention of the South African Constitution as well as the Promotion of Equality and the prevention of unfair Discrimination Act, not to mention international mechanisms such as the Un Convention on the Rights and Dignity of Persons with Disabilities, of which we are a founder signatory.

Jeremy Opperman 13 November 2012