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| Black Economic
Empowerment |
Black Economic Empowerment
(“BEE”) is not just a social imperative;
it is also a business imperative in South Africa.
Our policy remains to transform the business in
its entirety and to work with our stakeholders
in doing so to our mutual advantage and that of
our clients.
Through bona fide transformation of our entire
South African business, we enable our clients
to meet their procurement needs, namely: |
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of functionality and
performance in respect of professionally
managed risk and benefit programmes, and |
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from a well-resourced
organisation committed to empowerment and
thereby helping the client meet its own
BEE-related procurement objectives. |
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By engaging our suppliers,
we have influenced some of them to accelerate
their own BEE profiles, whilst in some areas we
have rationalised our supplier base. The position
is less fluid where long-term and warrantee-driven
supply contracts exist in sectors whose own BEE
Charters are still under negotiation.
Our Claims Management unit has been particularly
active in seeking BEE-accreditation of its service
providers. In the process, the Unit co-operates
with the South African Insurance Association and
is represented on the relevant industry task team.
We have referred elsewhere to our role in facilitating
and supporting the pilot BEE motor body repairer
project involving Zombodze Panel Beaters in Soweto
which we will be supporting and monitoring.
By engaging our Shanduka partners through various
task teams and liaison structures, we have been
able to better understand the changing BEE environment
and have established strategies and guidelines
to address our board, management and social responsibility
profiles. Shanduka representatives serve on our
Community Trust. Our South African board is chaired
by Cyril Ramaphosa, who also serves on the board
of Alexander Forbes Limited. Kojo Mills serves
on our South African board and Shanduka is represented
on our divisional boards. The executive of our
South African board also includes Geoffrey Nzau,
who is responsible for business development and
Mpho Nkeli who is responsible for the group’s
Human Resources and Black Economic Empowerment
initiatives.
As from November 2006, Peter Moyo was appointed
as managing director of our South African business.
As reported elsewhere, Mr Moyo has since been
appointed as group chief executive from 1 July
2006. He has stated his commitment to transformation.
Internal transformation of Alexander Forbes South
Africa is advancing through focused recruitment
and retention of talented black individuals at
all levels and capacities, supported by career-directed
development. Established organisations in South
Africa, provided they are fully transforming,
have an important role to play in ensuring the
sustainability of empowerment. Established organisations
are positioned to create and spread wealth through
employment opportunities, skills transfer and
the extension of a sound range of employee benefits
to persons to whom such security is paramount
as they build their careers.
We have under “Financial Sector Charter”
elsewhere referred to a number of examples of
how we have applied our expertise and influence
and collaborated with business partners in advancing
the objectives of BEE and of the Charter. These
examples include our role in: |
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Investment Solutions
Umbono project; |
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the pilot Zombodze Panel
Beater project to help direct claims spend
to emerging suppliers; |
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Home Loan Guarantee Company’s
facility protecting the lenders and borrowers
of low-cost housing against HIV/Aids-related
exposures. |
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Bonds ensuring housing
for dependants, this facility will play
a key role in managing what is known as
the “Aids Orphans” and other
problems cause by the premature death of
parents or breadwinners. |
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Employees from our organisation
have long played important roles in our industry’s
technical and educational structures and this
continues where we have employees serving on representative
bodies focused on the various aspects of BEE.
BEE is an ongoing process. From having pioneered
or otherwise implemented a number of initiatives
long before the Charters and Codes, we have achieved
an “A” Empowerdex rating in late 2005
based on then current criteria. Our 2004 and 2005
BEE audits have helped to identify gaps and informed
strategy. We, and the sector, face the challenge
of aligning not only with the forthcoming codes
but also with the core principles of bona fide
sustainable empowerment. |
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| Case study
4 |
| Model for empowerment
in the panel-beating industry launched |
Across South Africa, working environments
are changing and in a move aimed at giving
effect to enterprise development as espoused
in the Financial Sector Charter (FSC), Alexander
Forbes Risk and Insurance Services (AFRIS)
launched Zombodze Panel Beaters at the Orlando
Industrial Park, Soweto.
Anton Ossip, CEO of AFRIS said this
adopt-a-panel-beater programme was part
of the company’s commitment to Black
Economic Empowerment (BEE) and its contribution
to the challenge faced by emerging panel
beaters.
“Lack
of access to finance for panel beaters looking
to jack-up their operations was a constant
a hurdle,” he said. “This project
is intended to be a pilot and was made possible
with the support of several of our partners
in the industry.
“Barriers
to entry,” he added, “were made
worse by the shortage of skills and lack
of a comprehensive skills plan in the industry.
Add to these the onerous requirements manufacturers
impose for ‘approved’ repair
shops, a full-service enterprise with the
requisite equipment can cost an entrepreneur
some R10 million before he hires his first
employee and opens his door. Even a small
shop repairing only dents and dings can
require some R2,5 million in startup financing.
“Alexander Forbes and
the partners it recruited donated money,
equipment and low-interest loans to help
lift the standards of the panel beating
shop. This included the training of staff
and upgrading the premises, which was done
by staff members of Alexander Forbes. New
panel beating machinery was installed and
security measures enhanced.”
Ossip said Alexander Forbes
became involved because small players trying
to break into the R5 billion panel-beating
industry face many barriers to entry, making
it difficult for the clients of Alexander
Forbes who wish to balance a contribution
to BEE with their clients’ demand
for price and quality.
“We are extremely pleased to be chosen
as the first shop to partner Alexander Forbes,”
said Siza Nkosi from Zombodze. “We
are now the only panel beaters in Soweto
with such sophisticated equipment –
from paint-mixing machinery to a chassis-straightening
bench to welders, cutters and infrared drying
equipment – to serve our customers.
As a third-generation owner of Zombodze,
I am very grateful to all who have helped
make this happen.”
Once Alexander Forbes identified the
problem, Gari Dombo, managing director of
the Personal Services division at Alexander
Forbes, approached Nafcoc/JCCI to find suitable
panel-beater candidates to ‘adopt’.
The Bluespec Group assisted the company
with a needs analysis. In turn, they contacted
Marouns Auto Paint Centre who subsequently
lined up support from Centurion College
and TMS. In the end, Zombodze was outfitted
with quoting software, paint-mixing and
welding equipment and training for its 15
staff members. Alexander Forbes will use
its brokerage muscle to send business their
way and introduce them to other new partners.
“In fact”, said Dombo, “several
large corporate clients have shown commitment
to utilising and supporting such initiatives.”
“We were also delighted
that so many of our employees took time
out to come and help prepare Zombodze for
this launch,” said Ossip. “Their
spirit of volunteerism demonstrated our
company’s ethos and commitment to
this venture and BEE in general,”
he added.
The adopt-a-shop
method employed by some panel beaters should
be made more accessible but also be well
managed. This,“ he said, “should
not be seen as a panacea, but a sign of
progress toward transforming the sector.
“The approach should
help in the transfer of skills and provide
the insurance industry with the peace of
mind that panel shops that are below par
are being brought up to speed,” he
said. At the time of the official re-opening
of Zombodze’s, two recently damaged
vehicles were delivered to be repaired demonstrating
Alexander Forbes’ clients’ support
for this business. |
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