The American Chamber of Commerce in South Africa (Am. Cham) Submission on the BBB-EE Amendment Bill 2011 Prepared for the Parliamentary Portfolio Committee on Trade and Industry Public Hearings 13 March 2013
American Investment in South Africa • 500+ American companies in South Africa • Am. Cham Economic Survey 2012* (80 companies participated) • Results of the survey: 1. 2. 3. 4. 5. R 233 Billion invested in SA in 2011 Employ 70 000 South Africans directly, 75000 indirectly Created 7000 new jobs in 2012 Spent R 500 million on skills and development Spent R 320 million on training. (this excludes the 1. 5% Skills Development Levy) 6. R 445 million invested into Corporate Social Investment * AC Nielsen, 2012
South Africa as an Investment Destination • South Africa is competing globally for scarce foreign investment • Countries are competitive: cutting taxes; improving educational standards; building infrastructure; signing trade deals, etc Have to do things that encourage FDI: Policy certainty Policy clarity Policy simplicity
How does FDI benefit South Africa 1. Creates employment 2. Enhances lifestyles of employees 3. Fiscus benefits from higher tax revenue 4. Increased skills transfer and transfer of best practice 5. Permanent footprint in country results in Corporate Social Investment 6. Multi-nationals provide ED opportunities for local suppliers 7. Multi-nationals use SA as a gateway into Africa bringing above benefits
South Africa’s Position with FDI South Africa is the highest ranked African economy BUT Foreign direct investment flows to South Africa tumbled 43. 6% in the first half of 2012 compared to the same period last year, while FDI to the continent as a whole rose by 5%* *UNCTAD: Global Investment Trends Monitor, No. 10; UN CTAD; 23 October 2012, http: //unctad. org/en/Publications. Library/webdiaeia 2012 d 20_en. pdf
Percentage of Businesses considering international expansion to regions
BBBEE Amendment Bill: Definitions To protect their investment, multi-nationals require policy certainty and policy clarity • • Also required is simplicity of legislation to reduce the cost of doing business • Concern that most definitions in BBBEE Bill are vague and unclear which goes against the above requirements Sections that are unclear and require definition: 1. Section 1 (a), (d), (e) 2. Section 8, 10, 19, 20, 22, 23, 24
BBBEE Amendment Bill Comments • We welcome the creation of a BBBEE Commission. • This will ensure fairness and equity We recommend that the commissioner be subject to a monitoring and evaluation standard to ensure delivery takes place
BBBEE Amendment Bill: Section 12 • • • take South Africa needs an integrated and uniform approach when dealing with sectors of state Additional legislated requirements cause confusion and increase the cost of doing business in a country Sectoral charters are already in place, are successful, and should precedence
BBBEE Amendment Bill: Section 24 • States that “Without limitation to sub-section (1) the minister may make regulations in respect of: (b) the information that …… any private enterprise is required to provide to the commission ……. ” • American companies are subject to international legislation which could limit their ability to comply if it prejudices the international operation* • Suggest the words “without limitation” be deleted. *Foreign Corrupt Practices Act, 1977 et al
Conclusion • American companies in South Africa are committed to investing in and growing the South African economy and to assist in overcoming the challenges of poverty, inequality, and unemployment The best way to do this is to attract more foreign direct investment. • Policy certainty, policy clarity and simplicity of policy is required.
Thank you for the opportunity Questions
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