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BLACK ECONOMIC EMPOWERMENT
Despite the fact that the Environmental Services Industry (which includes recycling) has no industry transformation charter, ECOmonkey is determined to position itself as a BEE service provider par excellence. Therefore, ECOmonkey measures its transformation as a company against the requirements for empowerment set out in the Broad-Based Black Economic Empowerment Act, No. 53 of 2003, and the Codes of Good Practice on broad-based black economic empowerment.
Introduction
There are seven pillars of BBBEE, and the extent to which companies in specific industries are supposed to comply with the act, is spelled out in specific BEE industry transformation charters and the Codes of Good Practice. The seven pillars are:
1. Shareholder equity
2. Management equity
3. Employment equity
4. Skills development
5. Preferential procurement
6. Enterprise development
7. Corporate Social Responsibility - residual and industry-specific
Codes of good practice on BEE
Section 9 of the Broad-Based Black Economic Empowerment Act No. 53 of 2003 (BEE Act) legally provides for the issuing of Codes of Good Practice on broad-based black economic empowerment. Besides the BEE Act, companies and role players that have driven transformation charter processes to date, have lacked a standard BEE framework from which to develop charters. Furthermore, some charters were developed even before the BEE Act and the Department of Trade and Industry's (DTI's) Strategy for Broad-Based Black Economic Empowerment were released. Consequently, there exists substantial incomparability amongst charters, with respect to content as well as criteria for measurement. This results in entities in certain sectors with stricter measurement criteria being unfavorably disadvantaged when competing for business with entities in sectors with more lenient measurement criteria.
No charter for the environmental services sector
Deputy President Phumzile Mlambo-Ngcuka has appealed to waste management companies to allow smaller, locally based companies to enter the sector ahead of the adoption of the Waste Management Act in June [2007]. Government warned [n April 2007] that it intended to use its financial muscle, through procurement and funding to municipalities, to encourage transformation of the sector, which is earning more than R1 billion from municipalities alone, if the industry did not make an effort to transform itself. Financial pressure was governments only tool as the environmental services sector did not have a black empowerment charter. Mlambo-Ngcuka recently challenged the environmental services sector to develop a charter to bring it in line with other sectors (Benjamin, Chantelle, Appeal to rubbish companies to let in the little man, Business Day, 03 April 2007).
The deputy president said it was essential that ways be found to open the sector to small and black-owned businesses. [She] said waste management businesses, many run by municipalities, could link up with poor communities via co-operatives or small enterprises to set up recycling or local waste collection schemes. This could bring down the costs to local government and reduce the amount of waste going to landfill sites, he said. In Johannesburg, three of the city's five landfill sites will be full in seven years, reducing waste disposal capacity by 70% and forcing the city to look at ways of reducing the waste stream.
The [Waste Management] act could have serious financial implications for municipalities, as it had new requirements for, among others, issuing permits, incineration and processing landfill sites. Waste removal is still the cheapest service available, so municipalities will more than likely see some additional costs. The new legislation has tough penalties, including a maximum fine of R10m and imprisonment for 10 years for those found guilty of contravening measures aimed at controlling and limiting the disposal of waste, failing to formulate industry waste management plans or operating without the necessary licenses.
BEE initiatives
1. Management Equity
The terms of employment of all employees will include the right to belong to the ECOmonkey Employee Participation Forum (EPF). The EPF represents the interests of the employees in terms of employee hygiene, training and development. The EPF is mandated to bring to Management the concerns, proposals and requests of the employees of ECOmonkey. The EPF will constitute 25%+1 vote of the voting rights of the enterprise.
2. Employment Equity
ECOmonkey aims to employ mainly black women and 80% of its employees are black. Part of its employee base consists of owner-drivers of waste removal trucks. The Employee Ownership Scheme of ECOmonkey entails that the trucks used by the enterprise are owned by their drivers.
3, Enterprise Development
The owner-drivers of the waste removal trucks used by ECOmonkey are trained and assisted by ECOmonkey to manage their SMME enterprises. The company's policy is to source staff from community-based organizations (CBOs) or NGOs.
4. Shareholder Equity
The founders of ECOmonkey are currently in consultation with potential equity partners. Their goal is to structure the shareholding of ECOmonkey to ensure that the company fully supports BBBEE.
5. Skills development
All employees of ECOmonkey are trained in the highly specialized domain of recycling. Without specific knowledge and skills, the materials cannot be sorted and identified correctly and contamination takes place, rendering the materials useless and fit only for landfill. The employees are also trained in:
Basic business practices for entrepreneurs and SMME owners
Basic literacy and numeracy if required
Occupational health and safety
Waste management principles
ECOmonkey takes black marketing and communications students from select technicians and universities into its learner ship program me, to specifically acquire the skills and understanding involved in Cause or Social Responsibility Marketing. This is a skill which is critically needed by NGOs, CBOs and Section 12 companies, since, without it they have great difficulty obtaining funding. In this Endeavour ECOmonkey partners with its marketing agency, Red Pennant.
Preferential Procurement
ECOmonkey delivers its raw, sorted materials for remanufacturing to companies that are BEE as well as ISO compliant. These companies include:
Holmic (for rubber tyres)
PETCO (for plastics)
Anglo e-Waste, DESCO Electronic Recyclers. Computer Scrap Recycling, and Xperien Refurbishes (for computers) - all ITA-approved
Pikitup (for general waste)
Waste man Group (for organic waste)
Collect-a -Can (for tin)
Computer Aid International (for e-waste)
Worldwide stocks of primary raw materials are dwindling, and at the same time, secondary raw materials are becoming more important. South Africa's waste management legislation is meant to minimize the waste of primary raw materials by promoting the avoidance of waste, the recovery of recyclable materials, and the re-use and recycling of these materials into secondary raw materials for production. Disposal of waste must be a last resort.
Quality recycling
As with many cycles in nature, some raw material cycle only work under one condition: the raw materials that are recovered must be of the same high quality as at the beginning of the process. Technology, therefore, plays less of a role in the recovery of the materials than comprehensive organization, education and systematic quality management. Only in this way can we ensure that the materials the ECOmonkey passes on to manufacturers for reconstitution is high-quality and uncontaminated.