Article by attorney from our sister site: FindanAttorney.co.za : Nicolene Schoeman-Louw
On 11 October 2013 the revised Broad-Based Black Economic Empowerment (BBBEE) Codes were gazetted by the Minister of Trade and Industry (DTI). Broadly speaking, many of the changes have been welcomed, but there are concerns as to some of the amendments to the scorecard. In April 2015 these (new) Codes will come into operation thereby replacing the existing BB BEE Codes of Good Practice.
The most important change - is that the new codes reduce the existing seven scorecard elements (generic scorecard) to five, where the scoring will also be different - being:
1. Ownership
2. Enterprise and Supplier Development
3. Management Control
4. Skills Development
5. Socio-Economic Development
The scorecard level of compliance weighting (particularly from a procurement perspective), however is one of the concerns. The table below illustrates this effectively:
|
B-BBEE Status |
Old B-BBEE Codes
Point Required |
Amended B-BBEE Codes
Points Required |
B-BBEE Recognition Level |
|
Level One Contributor |
>= 100 points |
>= 100 points |
135% |
|
Level Two Contributor |
>= 85 but < 100 points |
>=95 but < 100 points |
125% |
|
Level Three Contributor |
>= 75 but < 85 points |
>= 90 but < 95 points |
110% |
|
Level Four Contributor |
>= 65 but < 75 points |
>= 80 but < 90 points |
100% |
|
Level Five Contributor |
>= 55 but < 65 points |
>= 75 but < 80 points |
80% |
|
Level Six Contributor |
>= 45 but < 55 points |
>= 70 but < 75 points |
60% |
|
Level Seven Contributor |
>= 40 but < 45 points |
>= 55 but < 70 points |
50% |
|
Level Eight Contributor |
>= 30 but < 40 points |
>= 40 but < 55 points |
10% |
|
Non-Complaint Contributor |
< 30 points |
< 40 points |
0% |
This means, without a business changing anything to their strategy that affects them adversely they will be one recognition level lower. So, former level 3’s will now be 4’s or worse and so forth.
Accordingly, it is crucial for businesses to not only understand these codes, but also to consider strategies that would facilitate compliance simultaneously with the new codes becoming effective in April 2015. That way, businesses would comply, remain competitive and not run the risk of losing clients or work (suffering losses) due to not being compliant.
For more information about the new BBBEE codes and its interpretation, feel free to subscribe to Schoeman Tshaka Attorneys’ monthly newsletter or see our website at www.schoemalaw.co.za
Nicolene Schoeman - Louw, Schoeman Tshaka Attorneys (Cape Town)
Tel: +27 (0) 21 425 5604
Email : enquiries@schoemanlaw.co.za
Website: http://www.schoemanlaw.co.za
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Twitter: @NicoleneSL_Att and Schoeman_Tshaka
