This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS SECTION 01 OF 02 PRETORIA 004313 
 
SIPDIS 
 
DEPT FOR AF/EPS DKRZYWDA AND AF/S/TCRAIG 
COMMERCE FOR 4510/ITA/IEP/ANESA/OA/JDIEMOND 
TREASURY FOR GCHRISTOPULOS, LSTURM, AND AJEWEL 
DEPT PASS USTR FOR PCOLEMAN AND WJACKSON 
 
SENSITIVE 
 
E.O. 12958: N/A 
TAGS: EINV ETRD EFIN ECIN ECON SF
SUBJECT:  AMERICAN FIRMS CRITICIZE FOURTH DRAFT OF ICT 
EMPOWERMENT CHARTER 
 
REFTEL:   A) PRETORIA 3726 
          B) PRETORIA 2651 
          C) PRETORIA 2164 
          D) PRETOIRA 2092 
 
(U) This cable is sensitive but unclassified. Not for 
Internet distribution. 
 
¶1.  (SBU) SUMMARY.  The American Chamber of Commerce in South 
Africa (AmCham) submitted comments on the fourth draft of the 
Information Communication and Technology (ICT) empowerment 
charter September 15 to the ICT Charter Working Group. 
American businesses described the fourth draft as impractical 
and unworkable.  Amcham, acting on behalf of U.S. businesses 
in South Africa, requested a meeting with Deputy Minister of 
Communications Roy Padayachee.  A fifth draft of the Charter 
will be submitted for governmental review by the end of 
September.  END SUMMARY. 
 
¶2.  (SBU) The American Chamber of Commerce in South Africa 
(Amcham) submitted comments on the fourth draft of the 
Information Communication and Technology (ICT) empowerment 
charter September 15 to the ICT Charter Working Group.  The 
document outlines concerns held by U.S. businesses operating 
in South Africa.  AmCham's document was also sent to the 
attention of the Deputy Minister of Communications Roy 
Padayachee.  AmCham expects to meet independently with 
Padayachee to discuss what it perceives to be major flaws in 
the fourth draft. 
 
¶3.  (SBU) In private, several executives of U.S. businesses 
in South Africa describe the fourth draft as "rubbish", 
"disappointing", and "completely unworkable."  One official 
said the document, was a "giant leap of impracticality" from 
the third draft.  In public, the companies have identified 
the following items as the significant issues of the fourth 
draft: 
 
- The scorecard definition of accreditation is incomplete 
with major omissions, which make impossible any attempt to 
apply the scorecard to real businesses. 
 
- Some targets are punitive and fail to account for special 
circumstances. 
 
- The excessive number of indicators creates unwarranted 
complexity and inflexibility. 
 
- The Charter lacks clarity on issues, which have major 
industry implications. 
 
- The Charter proposes interference in issues, which are of 
no significance to BEE and may actively prejudice 
multinational companies. 
 
- The appointment and governance of the BEE Council, its 
rules and procedures, its powers and methods of appeal of its 
decisions are undefined. 
 
- The Charter scorecard contains rigidity and inflexibility, 
which do not allow for different business models in a widely 
diverse ICT industry. 
 
¶4.  (U) AmCham and several representatives of American firms 
in South Africa met with Dali Mpofu, Chairman of the ICT 
Working Group and members of the scorecard drafting team. 
According to IBM Country Manager, Mpofu acknowledged several 
of AmCham's points pertaining to the draft's ambiguity 
regarding scoring and bonus points and said the Working Group 
would take those into consideration. 
 
¶5.  (SBU) Mpofu also indicated that he plans to submit a 
fifth draft of the ICT Charter to the Minister of 
Communications by the end of September.  The fifth draft 
would not be available for public comment at that time. 
Mpofu expects to receive government's feedback by the end of 
October.  He said the BEE Council would be formed between 
December 2004 and February 2005.  According to Mpofu the 
Council must represent the sector, but should also include 
labor and include representation from the provinces.  (NOTE: 
The composition of sectoral councils has been a major 
sticking point in the financial services sector and promises 
to be a contentious issue in the ICT sector as well.  END 
NOTE). 
 
¶6.  (U) Complete text of AmCham's submission to the ICT 
Working Group will be faxed to the South Africa desk. 
 
FRAZER