The drive for black economic empowerment is facing a major stumbling block because of differences in the definition of black people in the law and in the various sectoral transformation charters.

City Press Business investigated how black people are defined in the various charters and in the Broad-Based Black Economic Empowerment Act, and discovered a range of inconsistencies which have sown confusion in the corporate world and which threaten to undermine efforts to fast-track BEE.

The Department of Trade and Industry (DTI) said in response to City Press Business enquiries that it planned to revise all industry transformation charters to eliminate inconsistencies between them and the Broad-Based Black Economic Empowerment Act.

"There will be a process of harmonising charters to the Act some time next year," said Jeffery Ndumo, the DTI's director of BEE partnerships.

The differences range from broad definitions, which allow for the inclusion of non-South African citizens, to defintions which include disabled people and all women.

Vuyo Jack, a director of EmpowerDex, a BEE ratings company, said the reason the BEE Act defined black people as Africans, Coloureds and Indians was to make it in line with employment equity law. "As the Act stands now, it may mean that Nigerians, because they are Africans, could qualify (for BEE) by the virtue of the definition (black people) in the Act, but I don't think that was the intention."

Jack said the definitions of black people in the mining and petroleum charters were too wide because both charters included all black people, all women and all disabled people, as defined in the constitution.

He added that the ICT Charter's definition was more strict because it says these people must have been denied the right to vote prior to 1993 and 1983.

The significance of 1983 is that there was "a quasi-vote, the honorary white status granted to Chinese and certain Asiatics".

Jack said the financial sector charter split the definition between ownership and employment equity purposes to allow the industry "to hire other Africans who are permanent residents".

"The rationale is because of a lack of skills (locally) and also because you find a number of African nationals in the financial services sector that are in senior executive positions. They wanted to make sure they cater for those as well," he added.

An financial services industry executive explained that one of the motivating factors behind the split in the definitions was that black people from other African countries could serve as role models for young South Africans.

Andrea Brown, a consultant on industry transformation charters, said the definition of black people as contained in the BEE Act was correct because it removed terminology which emerged in previous policies, which had been abused by some companies. She cited the hiring or clinching of deals with white women only as one form of abuse.

The Empowerment Act was signed by President Mbeki in January this year but will only come into effect *1 on a date which has yet to be determined by the president.

The Act empowers the minister of trade and industry to give legal backing to the industry transformation charters by publishing them in the government gazette. However, the minister can only gazette the charters once he has made sure they are in line with the BEE Act, BEE strategy and the BEE code of good practice, which the DTI has yet to make public.

With ackowledgements to Jabulani Sikhakhane and City Press.

*1 Heaven help most of us.