On Friday 31 May the Dti published a number of amendments to the B-BBEE Codes. These amendments will become effective 6 months following their gazetting.
For practical purposes this means:
- Should your BEE audit be prior to 30 November 2019 the current version of the Codes will still apply.
- Should your BEE audit take place after 1 December 2019 this amended version of the Codes will then apply.
We however await clarity from the Dti. These amendments are only applicable to the Dti’s codes. Should you be subject to a sector charter these amendments will not be applicable until such time as they are formally incorporated into the sector charters.
BEE123 Software UpdateWe are already very busy building the changes into the BEE123 Software and will keep you posted on our progress.
Summary of the AmendmentsBelow is a summary of some of the more relevant amendments:
General Principles (Statement 000)
- Joint Venture Certificates – The principles regarding the measurement of Joint
- Venture have been outlined
- Start-up enterprises – Start-up enterprises (notwithstanding their classification as EMEs) that are tendering for contracts must be rated on the appropriate scorecard corresponding to the value of the contract.
- Priority element sub-minimums- Clarity has been provided regarding the priority element sub-minimums.
- EMEs and QSEs can only use Flow-through for enhanced recognition (confirms Practice Guide 1 of 2017)
Skills Development (Statement 300)
The Skills Development scorecard has been updated to include:
- A new category has been added for bursaries for black students at Higher Education Institutions (4 points, Target =2.5% of leviable amount)
- Stipends and all related costs for Higher Education bursaries are recognised at 100%.
- Reduction for Skills Development Expenditure (6 points, Target =3.5% of leviable amount)
- Unemployed headcount training sub-category removed from the Scorecard
- Unemployed and Employed Learnerships, Apprenticeships and Internships combined into a single category (6 points, Target =5% of total employees).
- The Definition of Absorption has been amended to exclude ‘further education and training’ as absorption. In addition only a ‘long term’ contract will be recognised as absorption (now defined as ‘…until retirement’).
- Limitation for Category F and G training has increased from 15% to 25%.
Enterprise and Supplier Development (Statement 400)
The Enterprise and Supplier Development scorecard has been updated to include:
- The target for 51% black owned suppliers has been increased from 40% to 50% and the points increased from 9 to 11 points.
- Procurement from 51% black owned Generic/large suppliers where there had been historic expenditure whilst such supplier was an EMEs or QSEs, allows for recognition under the EME or QSE category, for a period of up to 5 years.
- Enhanced recognition changes:
First time black owned suppliers have been removed.
51% black owned suppliers (flow through) attract a 1.2 enhanced recognition
- 51% black owned Generic/large entities (flow through) can qualify as an ESD beneficiary for a period of up to 5 years, if they were previously EMEs or QSEs beneficiaries of the measured entity.
- In the ESD Matrix Guarantees have increased from 3%-50%