Malatsi’s B-BBEE policy sets ‘wrong precedent’

COMMUNICATIONS and Digital Technologies Minister Solly Malatsi’s policy direction to ease broad-based economic empowerment (B-BBEE) regulations in the Information and Communications Technology (ICT) sector faces an uphill battle, with MPs from within and outside the coalition government expressing their strong objections on Tuesday.

Malatsi was hauled before the Communications and Digital Technologies Portfolio Committee to explain his new policy directives aimed at easing Broad-Based Black Economic Empowerment (B-BBEE) requirements for licensing satellite services, including  American billionaire Elon Musk’s Starlink. 

Malatsi reiterated his commitment to the principles of transformation in South Africa, stating that the new policy does not aim to create exceptions for specific companies or individuals.

Malatsi, who highlighted the ongoing efforts to introduce an equity equivalent investment programme in the ICT sector, clarified that his department's work predates recent international developments, specifically referring to last week's visit to Washington by the South African delegation led by President Cyril Ramaphosa.

Malatsi dismissed claims that the timing of the gazette could benefit Starlink, saying: “This work is not about introducing dispensation for any individual or company.” 

The minister sought to reassure the committee that the policy direction allows stakeholders 30 days to submit their views, which will help shape the final product.

“In the end, Icasa may continue to require 30% (B-BBEE ownership), but it must permit commitments envisaged in the ICT sector conditions for valid applications for individual licences,” he stated.

However, dissent erupted within the committee, with members expressing alarm over the implications of the proposed policy.

ANC MP Oscar Mathafa questioned Malatsi’s decision to open licensing applications without a clear strategy encompassing the equity equivalent programme, arguing that this move could undermine the transformation agenda that the government was mandated to pursue.

“We request all parties and members of society who are interested in this matter to reject this particular policy direction,” he said emphatically.

The sentiment was echoed by EFF MP Sinawo Thambo, who accused  Malatsi of attempting to amend legislation covertly through policy directions designed to align the B-BBEE Act with ICT sector codes.

His colleague Sixolise Gcilishe said the EFF would not hesitate to legally challenge the proposals.

“We will explore all legal mechanisms. We are not to accept our laws being written in Washington. You are setting a wrong precedent by bending backwards when you are bullied. This is about Starlink and Washington,” Gcilishe said.

MK Party MP Colleen Makhubele accused Malatsi of failing to engage transparently with stakeholders and highlighted the need for a thorough regulatory impact assessment before proceeding with the proposed policy changes.

DA MP Tsholofelo Bodlani countered the criticism, urging critics to acknowledge the opportunity for public comment within the 30-day submission period.

“All choose to ignore that little fact,” he remarked, suggesting that some criticisms were politically motivated.

Committee chairperson, Khusela Sangoni-Diko, raised concerns about the legal authority Malatsi held to align the B-BBEE with ICT codes, questioning the potential consequences of removing the 30% B-BBEE requirement.

“Why take away from black people one thing they can make a structural shift in the economy?” she pressed, advocating for industry players' desire for regulatory parity.

In response, Malatsi expressed surprise over the committee's shock regarding the policy proposals, reiterating that the discussions had been ongoing.

“There could be no legitimacy to a claim whatsoever that this process was done in a clandestine manner. We are in a stage that involves and invites public submissions,” he maintained.

Malatsi insisted that he was not making a special dispensation for certain businesses.

“Nothing could be further from the truth. I am not being bullied. I don’t take kindly to bullies and I would not allow myself to be bullied.”

Cape Times