The world in which we live is a criminally unequal one. In his iconic 1945 allegorical novella, Animal Farm, a satire on the facetiousness of the then Soviet Empire’s crackbrained experiment with a command economy, the legendary George Orwell in my view hit the nail squarely on the head when he said all animals were equal but some animals were more equal than others.
That’s the never-ending dichotomy of the so-called First World and its polar opposite, the so-called Third World as Orwell’s cleverly-couched diatribe applies as much to the tread-of-the-mill laissez faire economics of our day as it did to Marxist-Leninist Russia a generation back.
At an economically tumultuous juncture of our country’s history as we presently are, where unemployment has become something of a Gordian Knot conundrum, a promisingly ameliorational pursuit known as Business Process Outsourcing (BPO) is well worth exploring as a salvavic option.
One pundit defines BPO as “a subset of outsourcing that involves contracting the operations and responsibilities for a particular business process to a third-party service provider.” Examples of BPO services, which invariably do not constitute a company’s core or primary mission, include inbound and outbound call centres, live chat, bookkeeping, web development, research marketing, accounting and finance, and after-hours call answering services. BPO is driven, fundamentally, by the imperative of cost-cutting and overrides national boundaries through the employment and deployment of technologies that make human and data communications easier, thus lending credence to the concept of the global village that is today’s world.
BPO had been in existence in its primordial form since as early as the 19th century but it was not until the 1980s that its latter-day incarnation loomed larger and the term outsourcing became part of daily business parlance. Today, every continent is into BPO, including the economic Dark Horse called Africa. The Global IT-BPO Outsourcing Deals Analysis segments BPO buyer regions into three categories. These are North and South America (42 percent); Europe, Africa, and the Middle East (35 percent); and Asia and Oceania 23 percent.
In a Third World country such as Botswana, overseas-oriented BPO is key to bringing in those paramount hard currencies besides engendering a radical turnaround in the all too dingy joblessness picture. But are we up to it folks? Have we gotten aboard the bandwagon or we are virtual spectators watching nonchalantly as the BPO locomotive streaks away at breakneck speed?
JAX’S FLASH-IN-THE-PAN SUCCESS
The extent to which BPO has taken root in Botswana is not apparent. The first time I heard of it was in August 2007, when the Botswana Qualifications Authority (BQA), then going by the name Botswana Training Authority (BOTA), put it on record at a one-day IFSC-organised conference that they were in the process of developing standards for the nascent BPO industry in Botswana whilst they benchmarked with Mauritius, the UK, and South Africa. Little, if anything at all, has been heard of their progress since.
In February 2018, The Botswana Guardian reported of the newly-established Direct BPO, a fully-owned subsidiary of Mascom, which was looking to employing 400 people at the very outset. Once again, details as to how Direct BPO, whose establishment coincided with Mascom’s 20-year anniversary, has fared to date remain sketchy.
Perhaps the most spectacular case of a BPO operation in Botswana was that of Oseg, a company begun by Majakathata Pheko, affectionately known as Jax, in 2003 under the Debtsolve franchise umbrella. Oseg, which comprised of three divisions, offered customer management and financial services solutions and operated out of Gaborone and Windhoek in Namibia, where it touted MTN as its principal client. Oseg did receivable management for local financial blue chips such as Barclays Bank, FNB, Bayport, MVA, Botswana Insurance Company, Letshego, and Standard Chartered, and in due course CEDA and Mascom. It also served the Australian offshore market. Its account receivable division was the biggest in Botswana, handling over 60,000 accounts and managing a portfolio of over P400 million.
At its height, Oseg employed 150 people and had spent over P15 million on cutting edge technology and manpower training. In 2007, Oseg was nominated for Best Non-European Contact Centre at the CCF Awards held that year in Birmingham, UK, the “Oscars of the industry”.
Then in 2016, the sky seemed to have fallen. Oseg found itself saddled with an odious P4.4 million debt, with its staff resultantly trimmed to just under 50. According to media reports, Jax pointed to his own bankrollers and their partners in the alleged crime as his rather devious saboteurs. “I have evidence that powerful people in the bank and a cabal of friends both inside and outside the bank were intentionally and aggressively looking for ways to weaken Oseg, tarnish its name and diminish its value as they were in the same competing business interests, in the call centre and the factoring business,” the then youthful entrepreneur, who was only 41 at the time, bemoaned.
Jax reported the matter to NBFIRA and what came of that, not to mention the continued viability of his business, I have not been able to establish. I just hope and trust that Jax personally weathered the tempest as I have it on good authority that he is doing fairly well.
BOTSWANA MISSING OUT ON DOLLAR-DENOMINATED BILLIONS
For emerging economies, and even peripheral Third World countries, the BPO business can be something of a gold mine. According to the latest McKinsey report, the global BPO industry is valued at $163 billon and is expected to grow at $183 billion by the year 2023.
In the Philippines, BPO, which began with a call centre setup way back in 1992, accounts for 11 percent of GDP, the single biggest contributor to the nation’s economic activity. It employs 1.3 million people in over 700 outsourcing companies. One company, called Teleperformance, alone employs 47,000 people in 21 sites. In 2019, the BPO sector generated revenues of the order of $26.3 billion.
In India, the BPO sector, now 30 years old, provides direct employment to 2 million people and indirect employment to 8 million. In 2019, the BPO income overall amounted to $8.6 billon. In Mauritius, the ICT/BPO sector contributed 6 percent to GDP in 2019, representing a key driver of the Mauritian economy. The BPO sector is responsible for 53 percent of the 27,000 people employed in the ICT/BPO superstructure in 850 companies.
According to the Economic Development Board of Mauritius, leading multinationals such as Accenture, Huawei, Aspen Pharmacare and Allianz have back office operations in Mauritius. In addition, a number of international payroll companies currently use Mauritius as a service delivery centre.
Kenya is also looking to position itself as a hub for global digital BPO, notably through government promotion schemes such as Ajira. According to the ITC Authority of Kenya, the market size for online work was estimated to be $4.8 billion in 2016 and was projected to generate $15 billon by 2020. With only 7000 people employed in the BPO industry in the country, we are talking about a modest figure though it is still brisk compared to the rather lugubrious situation in Botswana. Clearly, there are billions in US dollar terms to be had in BPO and we are missing out on these big time.
MZANZI LEAVES BW IN THE DUST
Yet it is Big Brother next door from whom we have precious much to glean as he is our immediate competitor potentially in the BPO race. Remember, if our IFSC continues to flounder to date, it is largely on account of the fact that in Mzansi, we have a formidable rival right on our doorstep.
As we speak, the South African BPO sector is valued at $461 million going by the invariably authoritative McKinsey survey. It employs 270,000 people in six cities, a figure projected to more than double to 775,000 by 2030. Of the current total staff base, 65,000 serve international clients. That South Africa has made such enormous strides in the BPO arena is meritoriously earned and not simply fortuitous. It has been voted the second most attractive BPO location in the world for three years on the trot.
The South African BPO sector is tipped to grow by 3 percent per annum over the next three years, a rate which is in line with the trends in the global BPO space. There are currently over 100 local and international BPO providers operating in South Africa, with local players in the main serving large multinational customers. The industry’s key offshore business clientele is domiciled in English-speaking countries, notably the United Kingdom, United States, Canada, Australia, New Zealand and Ireland, with 61 percent coming from the United Kingdom, 18 percent from the United States and Canada, and 11 percent from Australia.
In June this year, the $1.5 trillion-strong Amazon announced that it would be signing up a total of 3000 South Africans to help cater to its customers in North America and Europe, which is testament to the fact that the country’s BPO market continues to make waves in the Western world. If Jeff Bizos is impressed, you can count on the likes of Elon Musk and Mark Zuckerberg to follow suit too sooner rather than later.
A FORGONE OPPORTUNITY TO TURBO-CHARGE THE BPO INDUSTRY IN BOTSWANA
Empowerment Africa is an organisation that boasts a business network that enables established and emerging businesses to connect, partner, and create long-term value with Africa-based projects. With reportedly 3000 esteemed contacts, it liaises with governments, major corporations, and investors to facilitate business opportunities, deliver deal flow, and provide research across its network to the Empower Africa business community.
Empowerment Africa recommends seven countries in Africa with thriving outsourcing industries. They are Ethiopia, Nigeria, South Africa, Kenya, Ghana, Mauritius, and Madagascar in that order. Botswana is conspicuous by its absence and that must be ample cause for concern to our Monetary Authorities, especially given that at least on paper, we are economically better off than three to four of these countries.
In 2015, Jax approached the Ministry of Youth, Sport and Culture and propositioned a joint partnership with Oseg in unlocking BPO potential in Botswana by looking at the public sector Debt Collection and Call Centre services for government. Jax reckoned that the total market for Receivables and Revenue collections sitting in Government and Parastatal organisations at the time amounted to over P3.5 billion, equivalent to 8% of the National Budget then. If the BPO sector was to be utilised to assist in collecting this debt, over 2700 jobs would be created.
Furthermore, considering that a typical government employee spent half the time attending to inquiries from members of the public, the exercise would result in improved efficiency delivery in government departments in addition to boosting government’s liquidity position.
This is what Jax said in a 50th independence anniversary publication in 2016 on the same subject. “Our estimations are that once all the collections work is outsourced, there is a potential to collect more than P100 million every month for the Government of Botswana.
The opportunity to create more than 2700 exists, which will help to mop out unemployed graduates and upskill them. The economic impact of 2700 jobs would support more than 15,000 people in the economy and also help to create jobs in other industries that support the BPO sector, and will stimulate the whole ICT sector. Over and above that, the outsourcing would stimulate the whole IT sector and help improve Botswana’s position as an ICT and Call Centre hub.”
Once again, I am not privy to what came of this proposition, but I am persuaded that had government acceded to it, the BPO business in the country would have quantum-leaped and we would today be waltzing on the proverbial Cloud 9 in terms of revenues generated. Even the road retarder Oseg encountered with its bankers would not have been a factor at all. As significant, we would in all probability have made it on Empowerment Africa’s short list for the continent’s pre-eminent BPO addresses.
THE INSTRUMENTALITY OF GOVERNMENT IN BOOSTING BPO FORTUNES
Granted, with the advent of the still latent E-Governance, the synergic potential with the Call Centre business is stupendous. As per Jax’s pitch to those who care to hear, “The outsourcing of the E-Governance and collections will greatly improve efficiency in service delivery in the government departments. Directing traffic and enquiries to a Call Centre would empower the BPO sector in such a way that would be able to help the public from all over the country from one central point 24 hours and 7 days week.
The Call Centres would also relieve Government of the pressure to develop brick and mortar representations/offices across the country. This would help to save billions of Pula as the public will be able to access the services from the comfort of their homes and villages. The Call Centre service would bridge the urban and rural division as everyone will now be able to access Government services and receive the same service.”
The real jackpot both to government and the broader citizenry, however, resides in the offshore market. With sales cycles in the BPO business taking up to 12 months, contracts typically run from five to seven years, which is sustained lucrativeness by any measure. It is in the direction of the overseas market that much of our energy should be focused, though wary that we do not recklessly neglect the domestic market, if we are to reinvigorate the BPO industry and get meaningful returns out of it.
Developed countries are all the more keen to outsource as one way to insulate their economies against severe hurt inflicted by globalwide economic tremors. For instance, it was thanks to offshore outsourcing that Australia so ably navigated the 2008 economic crisis. That year, IBM released a BPO report showing that 80% of Australian companies were willing to outsource from offshore companies to save 50% in expenses.
Here in Botswana, I would recommend that government be in the BPO vanguard by splashing on a whole host of catalytic factors. In South Africa, for instance, the Department of Industry, Trade and Competition devoted R1.3 billion between 2007 and 2018 to bolstering the BPO industry in one way or the other and committed a further R1.2 billion in 2019 alone, gestures which no doubt underlie the solid performance of the industry.
Even when the lockdowns were in progress, the industry was accorded essential services status so that it kept the momentum going. As if not to be outdone, the South African BPO industry body, Business Process Enabling South Africa (BPESA), has commendably done its part in aiding the growth of the industry by supporting skills development, sharing best practice, and providing its members with access to other business networks and associations that drive and influence the sector’s transition into the digital economy. In Mauritius, the Prime Minister himself, and not a man of lesser stature, directly oversees the BPO sector.
For Botswana to make a mark in the BPO arena, it has to build a reputation as a reliable, cost-effective, and high-quality destination for outsourced business services, attributes all of which South Africa excels in. In addition, South African BPO players provide higher-quality services owing to strength across five key areas: availability of skills, infrastructure, risk profile, business environment, and industry size. In Botswana, we will need to nurture some of these strengths with the instrumentality of government.
With the advent of COVID-19, it is of essence that traditional BPO providers build capabilities to enable rapid deployment and ramp-up of fully functional teams under crisis scenarios. Operational resilience, that is, the ability to pivot when an ordinarily disruptive set of circumstances hits, is key. South Africa demonstrated this capacity most eloquently when 90 percent of the workforce was able to switch to remote work in residential settings, when 50 percent of operations in key competing locations such as the Philippines and India came to a virtual standstill.
Lastly but by no means the least, a competitive currency is a reasonably efficacious undercutting strategy. In recent months, the South African Rand has significantly weakened against the US dollar, in which the cost of outsourcing is typically denominated, and this has enabled South African BPOs to compete more effectively with Asian offerings.
It concerns me that last year, the Pula appreciated by 1.6 percent against the SDR (Special Drawing Right), which is a compound of five currencies, namely the US dollar, the British Pound, the Euro, the Japanese Yen, and the Chinese Yuan. If that relatively ripped Pula trajectory persists, it will not help our BPO competitiveness at all Rre Moses Pelaelo.
Mighty Persian King ends Babylonian exile after 60 years
For all his euphoria and grandiose preparations for Nibiru King Anu’s prospective visit to Earth, General Atiku, Nebuchadnezzar didn’t live to savour this potentially highly momentous occasion. In fact, none of his next three bloodline successors were destined to witness up-close the return of the Planet of the Gods, as Nibiru was referred to in Sumerian and Egyptian chronicles.
Nebuchadnezzar died in 562 BC, having ruled for 43 years, missing Nibiru, which showed up circa 550 BC as we set down in The Earth Chronicles series, by a whisker. During the next 6 years, he had three successors in such an unconscionably short period of time. His immediate one was Merodach, his eldest son.
In Botswana, the Trade Disputes Act, 2016 (“the Act”) provides the framework within which trade disputes are resolved. This framework hinges on four legs, namely mediation, arbitration, industrial action and litigation. In this four-part series, we discuss this framework.
In last week’s article, we discussed the third leg of Botswana’s trade dispute resolution framework-industrial action. In this article, we discuss the fourth leg, namely litigation at the Industrial Court. The Act does not define the term litigation. Litigation is generally understood to mean a situation where parties to a trade dispute take their dispute to a court, in this case the Industrial Court, for determination by a judge.
Just like an arbitrator, a judge’s decision is binding on the parties though they can, of course, appeal it. However, while an arbitrator must be acceptable to both parties, a judge does not have to be acceptable to the parties. A party can, however, apply for the judges’ recusal from the case for such reasons as reasonable apprehension of bias.
Before discussing litigation at the Industrial Court, it is apposite that a brief background of the origins and evolution of the Industrial Court be given. The original Trade Disputes Act (No. 19/1982) provided for disputes to be adjudicated, inter alia, by a Permanent Arbitrator. This is confirmed in Veronica Moroka & 2 Others v The Attorney General and Another, Court of Appeal Civil Appeal No. CACGB-121-17 at para 11.
The Industrial Court replaced the institution of the Permanent Arbitrator (Dingake Collective Labour Law in Botswana 23) following the enactment of the Trade Disputes Act (No. 23/1997) which, as confirmed in the Veronica Moroka case supra, came into force on 9 October 1997.
As per Kirby JP, in the Veronica Moroka case supra, the Industrial Court’s status “as a court was uncertain and no provision was made for it to be served by a Registrar, with the usual powers and duties of such office”.
The Court of Appeal, in Botswana Railways Organization v Setsogo and Others, 1996 BLR 763 CA, remedied this defect. It held that the Industrial Court was not a mere statutory tribunal, but was, in line with Section 127(1) of the Constitution of Botswana, a subordinate court, having limited jurisdiction.
Following the change of the definition of subordinate court by Act 2/2002 to exclude the Industrial Court, along with the Court of Appeal, the High Court and a court martial, the Industrial Court became a superior court, albeit still with limited jurisdiction unlike the High Court, for instance, which has inherent unlimited jurisdiction.
Consequently, appeals from the Industrial Court were referred to the Court of Appeal. Perhaps most significantly, according to Veronica Moroka, Industrial Court judges were now, just like High Court judges, protected by, inter alia, security of tenure.
The Trade Disputes Act was further amended and replaced by the Trade Disputes Act, 2003 which commenced on 6 April 2004 as Act No. 15 of 2004. Section 16(8) of this Act provided for the appointment of the Registrar and an Assistant Registrar, but still had no section clothing them with specific powers.
It, through section 20(3), also bestowed, in the Court, the power to hear urgent applications and, in terms of section 18(1), the power to grant interdicts, thereby remedying the defects identified in Botswana Railways Organization v Setsogo & Others supra, but it still had no provision dealing with writs of execution and sales flowing therefrom.
In terms of section 18(1) of the Act, the Industrial Court’s jurisdiction includes the power to hear and determine all trade disputes except disputes of interest as well as, in terms of section 20(1) (b) of the Act, the power to interdict any unlawful industrial action and to grant general interdicts, declaratory orders or interim orders.
In terms of section 20(1) (c) of the Act, the Industrial Court is also clothed with the power to hear appeals and reviews of the decisions of mediators and arbitrators respectively. It, in terms of section 20(1) (d) of the Act, has the power to direct the Commissioner to assign a mediator to mediate a dispute if it is of the opinion that the matter has not been properly mediated or requires further mediation.
In terms of section 20(1) (e) of the Act, the Industrial Court also has the power to direct the Commissioner to refer a dispute that is before the Court for arbitration. In terms of section 20(1) (f) of the Act, it has the power to refer any matter to an expert and, at the Court’s discretion, to accept the expert’s report as evidence in the proceedings.
The Industrial Court also has the power to give such directions to parties to a trade dispute provided the object of such directions is the expedient and just hearing and determination or disposal of any dispute before it.
In terms of section 20(2) of the Act, any matter of law and any question as to whether a matter for determination is a matter of law or a matter of fact is decided by the presiding judge. In terms of section 20(3) of the Act, with respect to all issues other than those referred to under section 20 (2), the decision of the majority of the Court prevails.
Where there is no majority decision under section 20 (3), the decision of the judge prevails. In terms of section 24(2) of the Act, any interested party in any proceedings under the Act may appear by legal representation or may be represented by any other person so authorised by that party.
In terms of section 28(2) of the Act, a decision of the Industrial Court has the same force and effect as a decision of the High Court, and because, unlike South Africa, Botswana has no Labour Appeal Court, decisions of the Industrial Court, just like those of the High Court, are, in terms of section 20(5) of the Act, appealable to the highest court in the land, that is, the Court of Appeal.
The Trade Disputes Act went through another amendment in 2016. Section 14 of the Act ensures the continuation of the Industrial Court. It outlines its functions as the settlement of trade disputes as well as the securing and maintenance of good industrial relations in Botswana.
In terms of section 15(1) of the Act, the judges of the Industrial Court are appointed by the state President from among persons possessing the qualifications to be judges of the High Court as prescribed under section 96 of the Constitution.
In terms of section 15(2) of the Act, these judges are headed by the President of the Industrial Court designated by the state President from among the judges.
In terms of section 15(4) of the Act, a judge of the Industrial Court who is not a citizen of Botswana or who is not appointed on permanent and pensionable terms may be appointed on contract basis and is eligible for reappointment.
In terms of section 15(5) of the Act, Judges of the Industrial Court sit with two nominated members, one of whom is selected by the judge from among persons nominated by the organisation representing employees or trade unions in Botswana and the other selected by the judge from among persons nominated by the organisation representing employers in Botswana.
In terms of section 15(6) of the Act, where, for any reason, the nominated members are or either of them is absent for any part of the hearing of a trade dispute, the jurisdiction of the court may be exercised by the judge alone or with the remaining member of the Court, whichever the case may be, unless the judge, for good reason, decides that the hearing should be postponed.
In terms of section 18(1) of the Act, An Industrial Court judge vacates office on attaining the age of 70 years, provided that the state President may permit him or her to continue in office for such period as may be necessary to enable him or her to deliver judgment or to do any other thing in relation to proceedings that had commenced before him or her.
In terms of section 18(2) of the Act, in accordance with the provisions of the proviso to section 96(6) of the Constitution, a person appointed to act as an Industrial Court judge vacates that office on attaining the age of 75 years.
In terms of section 19(1) (a) and (b) of the Act, an Industrial Court judge may be removed from office only for inability to perform the functions of his or her office, whether arising from infirmity of body or mind, or from any other cause or for serious misconduct.
In terms of section 19(2) of the Act, the power to remove an Industrial Court judge from office vests in the state President acting in accordance with the procedure provided under section 97 of the Constitution for the removal of High Court judges.
*Ndulamo Anthony Morima, LLM(NWU); LLB(UNISA); DSE(UB); CoP (BAC); CoP (IISA) is the proprietor of Morima Attorneys. He can be contacted at 71410352 or email@example.com