Aveng and DTI launch Black Suppliers Summit

In partnership with the department of trade and industry (DTI)‚ infrastructure development company Aveng launched the Black Suppliers Summit in Johannesburg on Tuesday. The summit aims to provide a platform in which big business and small enterprise are able to network with a view to addressing the challenges faced by black suppliers. Speaking at the opening of the summit‚ Aveng CEO Roger Jardine said: “The Aveng Group acknowledges that the success of (small business) is closely intertwined with our own success. We ensure that through our various initiatives we support emerging enterprises that have a direct impact on the Aveng value chain.

“Our commitment to growing the number of sustainable small‚ micro and emerging enterprises is an effective way of addressing the scourge of poverty‚ underdevelopment and unemployment that confronts our country.” Jardine noted the challenges local construction companies faced‚ including lower spending on infrastructure‚ highlighting the South African Federation of Civil Engineering Contractors’ estimate that more than 100‚000 jobs had been lost in the sector since the employment peak of 200‚000 in 2009. A revival of infrastructure spending was critical to the South African construction industry and to all players in the industry‚ he said.

“The development of these businesses and investing in infrastructure is important to the broader economic growth of the country. Not only does the sector support the fiscus through the taxes we pay‚ we also provide job opportunities‚” Jardine said. With a quarter of the South African population unemployed‚ it was clear the construction sector was important to the economy‚ he said. “Through sustained investment we are better able to support (small businesses) and develop their skills for future projects.” Jardine also spoke about the reputation of the construction industry and the recent comments in the media calling for the banning of companies found guilty of collusion and the banning of contractors.

He said that‚ given the importance of the sector‚ such a policy would be detrimental to the long-term economic health of the country and would be a blunt policy instrument that would have unintended long-term negative consequences. Using the UK Office of Fair Trading’s (OFT’s) probe into cover pricing activities in the construction sector as an example‚ Jardine said: “In the latter part of 2009 in the UK‚ a code of conduct was launched by the industry to promote compliance with local and European Union competition laws. The OFT provided guidance advising clients that contractors who had been fined should not be discriminated against. “The OFT indicated that it did not intend for companies to be barred from public sector contracts‚ as such a situation would serve to reduce competition‚” he said.

Jardine said there needed to be a focus on cleaning up the industry and ensuring business was run ethically and with integrity. He called for a commitment to an industry-wide code of conduct. “In this same vein we must embrace Economic Development Minister Ebrahim Patel’s call for an ‘integrity pact’. As an industry we must go further. We must also adopt an industry-wide code of conduct that directly addresses the endemic practices of the past‚” he said. Jardine said the code should focus specifically on eradicating unlawful competition practices that had emerged.

“There is no doubt that an efficient and competitive economic environment‚ focused on sustainable development‚ will benefit all South Africans. We must all look forward and commit to conducting business ethically‚ and undertake not to reach agreements with competitors to fix prices‚ divide markets or engage in collusive tendering. It is just wrong‚” he said. Tax compliance among large and small construction companies was also a concern. “We would like to do business with partners who are committed to the letter and the spirit of the law. Aveng will make tax compliance and administration assistance available to our emerging black suppliers‚” Jardine said.