New Act and New Codes
Cabinet has approved the introduction of the Broad-Based Black Economic Empowerment Amendment Bill, 2012, to Parliament and the revised Broad-Based Black Economic Empowerment (B-BBEE) Codes of Good Practice, 2012 for public comment.
Some of the key areas of refinement of the Codes include:
- The reduction of the generic scorecard to five elements, with Employment Equity and Management Control being consolidated, and Preferential Procurement and Enterprise Development merged to form a Supplier Development Element.
- The points for Ownership have been broadened to include designated groups in the main points
- The thresholds for Exempted Micro Enterprises (EME) and Qualifying Small Enterprises (QSE) have been adjusted.
- All companies, except EME’s, will be required to comply with the five elements of the B-BBEE scorecard
- The B-BBEE recognition levels status table has been revised.
- Priority elements have been introduced, namely ownership, skills development and supplier development, and large enterprises are to comply with all three priority elements. The priority scores of entities that do not comply with sub-minimum requirements in each priority will be discounted.
- EME’s that are 100% black-owned will qualify as Level 1, while EME’s that are more than 50% black-owned will qualify as Level 2.
- The framework for the accreditation of B-BBEE Verification Agencies is to extend to the Independent Regulatory Body of Auditors (IRBA)
Although the revised codes are only published for comment, it is clear that changes are now inevitable and it is going to be more difficult to achieve a high score. Therefore, it now becomes absolutely vital to prepare for and achieve a good scorecard before the new codes are finalised.
All material subject to our Legal Disclaimers.