The next five years will see radical socio-economic transformation as “economic transformation and inclusive growth take centre stage among state priorities,” said Jacob Zuma at the inauguration of his second term of office as State President. He affirmed the role of Black Economic Empowerment (BEE) as one of these priorities.
It is therefore reassuring that the Department of Trade and Industry (Dti) has already been working towards clarifying some of the confusion in the BEE Codes, says Signa CEO Murray Chabant.
A joint technical committee of the Dti and the Association of BEE Verification Agencies (ABVA) made the following key announcements in a report released in May 2014.
1. Clarification statements relating to the current Codes of Good Practice (2007) have been released. These statements address issues in ownership, employment equity, preferential procurement and enterprise development. (Interpretation_Statement_2007_COGP_042014.pdf)
2. All BEE certificates issued from 1 May 2015 must reflect the requirements of the Amended Codes; this also applies to Sector Charters. If verification takes place after 30 April 2015, irrespective of financial year end, the Amended Codes will apply.
3. The various statements that were omitted in the Amended Codes will be released by the end of the current financial year.
4. B-BBEE certificates issued under the 2013 Amended Codes are valid and entities that are ready to be measured on the Amended Codes must have their BEE certificates accepted in the market, as they are legally valid.
5. Alignment of Sector Codes: Sector Codes are required to align with the amended Codes by 30 April 2015, failing which the Amended Codes will apply.
6. Empowering Supplier status: A qualifying small enterprise (QSE) that has greater than 51% black ownership will have to confirm its status as an empowering supplier on its affidavit.
While the market undoubtedly appreciates these clarification statements, many issues in the Amended Codes remain unclear, says Chabant.
“With BEE identified as a priority for the next five years of economic transformation, it is critical that the Amended Codes of Good Practice are clear and well understood by business to ensure accurate and meaningful implementation.”
In the last 10 years Signa has assisted over 1 000 businesses implement effective transformation strategies that have seen marked improvements in their BEE scores and organisational empowerment. Signa is a member of ABVA.