Strategic Planning Required Around New BEE Code Amendments

Recent changes to the B-BBEE legislation have resulted in lots of uncertainty and created practical challenges for directors and business owners alike. However, once the BEE mind shift has taken place, management can use the perceived unnecessary cost to their advantage with careful planning and action.

The Amended Codes of Good Practice which came into effect on 1 May 2015 brought with it more focus in certain areas which requires a relook at existing strategy or the formulation of a total new one.

More focus is place on the following areas:

Ownership – black ownership points increase from 20 to 25

Skills development – focussed training points increased from 15 to 20

Preferential Procurement and enterprise development points increased from 35 to 40

Less Focus on:

Management Control and Employment equity points decreased from 25 to 15

Unchanged are:

The socio economic development points remained unchanged at 5

What impacts this even more is that the first three elements mentioned above are seen as priority elements with a requirement subminimum compliance target of 40% to avoid the BEE score level being discounted by 1 level.

Another big impact is that the various level scores have been amended, for example; in order to achieve a level four score below, you would now need 15 points more just to maintain you previous level four status.

	PREVIOUS	AMENDED CODES

It is also clear that  the element with which one can score the most points, is Supplier and Enterprise Development. There for with careful planning one can gain additional points in this area’s while improving your own supply chain and service.

From the above it is clear that every point now counts and that one will have to look strategically at where the most points for the money spent can be achieved. This can only happen if you plan and work through the plan systematically.

Lastly, let’s look at the definition of black as per the B-BBEE Amendment Act 2013;

‘black people’ is a generic term which means Africans, Coloureds and Indians—
(a) who are citizens of the Republic of South Africa by birth or descent;
or
(b) who became citizens of the Republic of South Africa by naturalisation—
(i) before 27 April 1994; or
(ii) on or after 27 April 1994 and who would have been entitled to acquire citizenship by naturalisation prior to that date;

NB The definition of “Coloured” includes “Chinese”

If you or your company is in need of formulating a BEE strategy specific for your business, contact Martin Barnard from B Square Financial on 083 634 0092 to set-up a consultation and discuss a solution that would fit your budget and business.

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