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Amendments to the B-BBEE Charter: Guiding You Through the Changes

Jul 09 ,2019

                            

As of 31 May, various new Amendments to the B-BBEE Charter will affect businesses around the country. These will officially be implemented by 30 November 2019, are you prepared?

The Reality

With our new Government officially coming into play, these legislative changes look to address outstanding issues and reduce Gazetting costs. Amendments are being made under Revised Code 000 General Principles, Interpretation and Definitions Revised Schedule 1, Skills Development Revised Code 300 as well as the Enterprise & Supplier Development Revised Code 400.

While some businesses are up in arms over these Amendments, the truth of the matter is that they look to clarify the confusion that has long plagued South Africa. Like with any piece of legislation, further measures, precautions and corrections should be put in place to ensure that it remains effective and helps to achieve true transformation.

BEE-Savvy

The expert team at BEE-Connex has summarised some of the key changes that you can come to expect in the next few months.

Here are a few important points to note under the Generic Codes 000:

A Designated Group Supplier: Now defined as a supplier that has at least 51% Black Ownership as defined under Black Designated Groups.

 Priority Element Compliance: 51% of Black Owned QSEs who benefit from Enhanced Recognition are not required to comply with either of the other two Priority Elements

The introduction of a new section for Eligibility of Joint Ventures.

A revised B-BBEE Generic Scorecard table that includes Bonus Points to reach a total of 118 points.

Key points to note under the Skills Development Revised Code 300:

Employed & Unemployed indicators for learnerships are now combined;

Weighting points for Skills Development expenses reduced from 8 to 6 points;

Category F & G are no longer capped at 15% but at 25% (excluding travel and accommodation - 15%);

Training Manager’s salary cannot exceed 15% of your Skills Development Expenditure;

Spend on bursaries for black students attending higher Education Institutions has been introduced (target of 2.5% leviable amount, 4 weighting point);

No double counting allowed between Skills Development Expenditure;

Stipends linked to bursary programs now a legitimate learning cost;

Definition for a bursary or scholarship scheme now specifically includes costs for funding for subsistence or accommodation during the period of study.

 

Key points to note under the Enterprise & Supplier Development Revised Code 400:

 

Procurement Spend with 51% Black-Owned Businesses: points have increased from 9 to 11 and the target from 40 – 50%.

The multiplier of 1.2 (for first-time suppliers) is removed and replaced by a 1.2 recognition boost for purchasing from 51% Black Owned or Black Woman Owned suppliers.

 Beneficiaries of ED & SD contributions must be 51% Black Owned or Black Woman Owned (EME or QSE) suppliers whose qualification is achieved utilising the flow-through principle.

The Benefit Factor Matrix is amended in that 50% of Guarantees provided on behalf of a Beneficiary can be claimed instead of 3% as before.

 The increase in the points and target in respect of procurement from 51% Black Owned Suppliers strengthens the significance of black ownership (weakens the significance of a supplier’s BEE Level).

 

Realign your compliance strategies

Confused about where you stand with the introduction of these new Amendments? Check your scorecard against our BEE-Connex database of industry experts and get connected to a perfectly matched supplier! As always, it’s imperative that we implement any required changes sooner rather than later. 

Image source: Law office of Kim Ryan