Newly amended BBBEE Codes were published by the dti minister, Dr Rob Davies on 11 October 2013 and will be used to verify businesses whose financial year ends 10 October 2014. The codes will replace the existing BEE codes of Good Practice. Those businesses that are verified after October 2014 will be subject to the amended codes.
The amended codes are fairly similar to the existing codes, although some weightings and names of some elements have been changed. There is a general improvement in the targets which should result in better transformation. More points on skills development can be earned than ever before showing the importance of skills development in the economy and we see this as a positive move.
Amended generic principles include:
- A generic scorecard adjusted in accordance with government key priorities.
- Five scorecard elements with employment equity and management control as well as consolidation of preferential procurement and enterprise development.
- Broad based groups elevated into the main ownership scorecard.
- All companies except Exempted Micro Enterprises to comply with all elements.
- Scorecard points and qualification criteria for awarding of B-BBEE status levels seriously adjusted.
- Employment equity and management control merged into one element: Management Control (MC) weighted at 15 points collectively.
- Preferential procurement and enterprise development merged into one element: Enterprise and Supplier Development (ESD) weighted at 40 points collectively
- Importantly, skills development has been increased to 6% of payroll spend and the 0.3% of payroll spend for persons with disabilities has been retained but the weighting has been increased to four points from the previous three.
- Introduced minimum requirements of priority elements: Ownership, skills development, and enterprise and supplier development, with the implication that if these are not achieved the overall verification level will dilute by one point.
- The thresholds for exempted micro enterprises and qualifying small enterprises have been adjusted to R10m and R50m turnover per annum respectively.
- Enhanced the recognition status of black owned EMEs and QSEs.
The amended BBBEE codes will probably result in the average verification level being a level 7 for those businesses who are not innovative or who do not adopt an integrated approach to BBBEE
I Can! will be hosting a ‘Client Info Sessions’ nationally in January and have invited John Botha to present on the amended B-BBEE codes. John has spent the last six years at NEDLAC as a business representative and who is a consultant in transformation, human capital development and labour law.
For more on revised scorecards B-BBEE recognition, see full dti report: