The Department of Trade and Industry (DTI) on 02/10/12 opened a 60-day period for comment on the revised Broad-based Black Economic Empowerment (B-BBEE) Codes of Good Practice. Some of the preliminary information that was presented at the launch of these Draft Codes is as follows:

The annual revenue thresholds to be measured as an Exempted Micro Enterprise (EME), or as a Qualifying Small Enterprise (QSE) have been adjusted:

  • EME’s increasing from R5 million to R10 million
  • QSE’s increasing from between R5 million and R35 million, to R10 million and R50 million

The current generic scorecard contains seven elements and these have been reduced to five, with a total of 105 points assigned to the five elements. NB: All companies, except EME’s, are to comply with all the elements of the scorecard.

Below are some challenges companies may have to address if these Draft Codes are gazetted unchanged:

  • Ownership:
    This element is given greater recognition – points increase from 20 to 25.
  • Management Control (includes the old Management and Employment Equity):
    Less points, 15 now, whereas previously the 2 elements were worth 25 points together. Also, the sub-category ‘Junior Management’ measured under Employment Equity previously, has been removed and only 2 levels, senior and middle management, are now to be measured.
  • Skills Development:
    Still worth 20 points, but 5 bonus points can now also be scored. There is greater recognition for implementing Learnerships and Apprenticeships, i.e., a total of 8 out of the 20 points, and the 5 bonus points for “Learner Absorption” (presumably for employing them at the end of the learnership period).
  • Enterprise and Supplier Development (includes the old Preferential Procurement and Enterprise Development elements):
    Together worth 40 points (previously 35). Significantly, 13 of the 25 points allocated to procurement are for buying from Black/Black women owned suppliers. Perhaps more importantly, recognition will only be for procurement from value-adding suppliers (i.e., to obtain value-added status, the sum of total labour costs together with net profit before tax must exceed 25% of total revenue). In addition, up to 6 bonus points can be obtained new venture and job creation.
  • Socio-economic Development:
    Still worth 5 points on the Scorecard. There appears to be a shift towards emphasising training and mentoring persons to improve their capacity to work and for self-employment. Once we have the full draft Codes, we will elaborate on this.

For assistance with your BEE requirements please contact our HR department [email protected]