AT THE BENCH MARK OF EMPOWERMENT B-BBEE AMENDED CODES EXPLAINED
BEE (Black Economic Empowerment) or Broad-Based Black Economic
Empowerment (BBBEE) as it is technically known is an initiative by the South
African government to address historical imbalances of the country by
facilitating the participation of black people in the mainstream economy.
Black people refer to African, Coloured and Indian who are South African
citizens by birth or by descent, or who were naturalised prior to the
commencement of the interim constitution in 1993, or who those would have
been able to acquire citizenship by naturalization prior to 27 April 1994 had it
not 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 February
2007 and the Amended Codes of 2013.
Who needs to comply / participate
Public Sector Procurement
• Anyone who supplies government or the State-owned Enterprises (Eskom,
Transnet etc.) or is in a direct line to any of their suppliers
Money 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, petrochemical
companies, 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 Mean
Your score counts towards your
customer’s score
Your supplier’s score counts towards yourscore
BEE is not a compliance issue……
……..it is a competitiveness issue.
What does the “OLD’ Scorecard focus on
• Gender empowerment
• Disabilities
• Support for the youth, rural and elderly
• Increasing local production and value-adding
• Supporting small businesses
• Sectorial issues
• Pro-active investment in business development
• Community projects
• Massive Skills Development
What else does the “Amended ” Scorecard focus on
• Ownership – Mandatory rating for all business’
• Disabilities
• Support for the youth, rural and elderly
• Increasing local production
• Supporting small businesses
• Pro-active investment Enterprise and Supplier Development
• Massive increase in Skills Development emphasis – Targets have Doubled
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 Enterprise
Development
Socio Economic Development
NEW CODES : KEY
CHANGES
Enterprise Turnover
Exempted Micro Enterprise Less than R10m
Qualifying Small Enterprise
More than R10m but less than R50m
Large Enterprise More than R50m
REVISED CODES : Thresholds
Element Codes of Good Practice 2007 Amended Codes of Good Practice 2013
Weighting points
Target Weighting points
Target
Ownership 20 25% + 1 Vote 25 25% + 1 Vote
Management & Control 10 50% 19 50%
Employment Equity 15 80% - -
Skills Development 15 3% of Payroll 20 6% of Payroll
Preferential Procurement 20 70% - -
Enterprise Development 15 3% - -
Enterprise & Supplier Development
- - 40 80%
Socio-Economic Development
5 1% 5 1%
Total 100 109
2007 AND 2013 SCORECARD COMPARED
B-BBEE Status Current Qualification
Revised Qualification
B-BBEE
Recognition
Level
Level 1 ≥100 points ≥100 points 135%
Level 2 ≥85 but <100 points
≥95 but <100 points
125%
Level 3 ≥75 but <85 points ≥90 but <95 points 110%
Level 4 ≥65 but <75 points ≥80 but <90 points 100%
Level 5 ≥55 but <65 points ≥75 but <80 points 80%
Level 6 ≥45 but <55points ≥70 but <75 points 60%
Level 7 ≥40 but <45 points ≥55 but <70points 50%
Level 8 ≥30 but <40 points ≥40but <55points 10%
Non-Compliant <30 points <40 points 0%
REVISED CODES : Recognition Levels
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 Supplier
Development 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 !!