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AT THE BENCH MARK OF EMPOWERMENTB-BBEE AMENDED CODESEXPLAINED
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BEE (Black Economic Empowerment) or Broad-Based Black EconomicEmpowerment (BBBEE) as it is technically known is an initiative by the SouthAfrican government to address historical imbalances of the country byfacilitating the participation of black people in the mainstream economy.Black people refer to African, Coloured and Indian who are South Africancitizens by birth or by descent, or who were naturalised prior to thecommencement of the interim constitution in 1993, or who those would havebeen able to acquire citizenship by naturalization prior to 27 April 1994 had itnot been for the presence of the Apartheid policy.BBBEE is governed by the Broad Based Black Economic Empowerment (BBBEE)Act No. 53 of 2003 and the BBBEE Codes of Good Practice gazetted in February2007 and the Amended Codes of 2013.
Who needs to comply / participatePublic Sector Procurement Anyone who supplies government or the State-owned Enterprises (Eskom,Transnet etc.) or is in a direct line to any of their suppliersMoney from government Anyone trying to become involved in Public-Private Partnerships Anyone attempting to purchase state-owned assets Further broadening of BEE net to include govt. grants etc.Regulated Industries & Concessions Anyone seeking a license or concession from government(Banks, mines, petrochemicalcompanies, telecommunications companies, gambling institutions, import / export companies, etc.)Public Perception (Social License) National BEE Database – BEE score is public domain info. National BEE Label for consumer products & services and retailers Shareholder Activism
What does a BEE Scorecard MeanYour score counts towards yourcustomer’s score Your supplier’s score counts towards yourscore BEE is not a compliance issue .it is a competitiveness issue.
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What does the “OLD’ Scorecard focus on Gender empowermentDisabilitiesSupport for the youth, rural and elderlyIncreasing local production and value-addingSupporting small businessesSectorial issuesPro-active investment in business developmentCommunity projectsMassive Skills Development
What else does the “Amended ” Scorecard focus on Ownership – Mandatory rating for allbusiness’ Disabilities Support for the youth, rural and elderly Increasing local production Supporting small businesses Pro-active investment Enterprise andSupplier Development Massive increase in Skills Developmentemphasis – Targets have Doubled
NEW CODES : KEYCHANGES The seven elements of the BEE scorecard have been reduced to five elements: Ownership – Mandatory Management Control – Now includes Employment Equity Skills Development Enterprise Supplier Development – Merged Preferential Procurement and EnterpriseDevelopment Socio Economic Development
REVISED CODES : ThresholdsEnterpriseTurnoverExempted Micro EnterpriseLess than R10mQualifying Small EnterpriseMore than R10m but less thanR50mLarge EnterpriseMore than R50m
2007 AND 2013 SCORECARD COMPAREDElementCodes of Good Practice 2007Amended Codes of GoodPractice 2013Weightingpoints2025% 1 VoteWeightingpoints25Management & Control1050%1925% 1Vote50%Employment Equity1580%--Skills Development153% of Payroll20Preferential Procurement2070%-6% ofPayroll-Enterprise Development153%--Enterprise & tTotal51%51%Ownership100Target109Target
REVISED CODES : Recognition LevelsB-BBEE Status Current LevelLevel 1 100 points 100 points135%Level 2 85 but 100 points 95 but 100points125%Level 3 75 but 85 points 90 but 95 points110%Level 4 65 but 75 points 80 but 90 points100%Level 5 55 but 65 points 75 but 80 points80%Level 6 45 but 55points 70 but 75 points60%Level 7 40 but 45 points 55 but 70points50% 30 but 40 points 40but 55points10% 30 points 40 points0%Level 8Non-Compliant
A New Requirement :Priority Elements(Based on % of target) 40% on ownership’s net value 40% of the skills development score 40% of each of the targets in the 3 categories within the Enterprise and SupplierDevelopment element, namely: Preferential Procurement (25 point weighting) Supplier Development (10 point weighting) Enterprise Development (5 point weighting)Failure to meet any of these subminimum targets , results in the discounting of 1 level !!
Element Amended Codes of Good Codes of Good Practice 2007 Practice 2013 Weighting points TargetWeighting points Ownership 20 25% 1 Vote 25 25% 1 Vote Management & Control 10 50% 19 50% Employment Equity 15 80% - - Skills Development 15 3% of Payro
