Why B-BBEE

Are you ready for B-BBEE verification on the new codes?

Auditors who are accredited by IRBA (Independent Regulatory Board for Auditors) will not be able to issue B-BBEE certificates after 30 September 2016. IRBA explained that they want to withdraw from being a B-BBEE regulator. These auditors have to apply for accreditation with SANAS (South African National Accreditation System) and once they receive their accreditation status, they will be able to issue certificates. SANAS interprets and applies the BBBEE Codes in a stringent manner and is now the sole regulator of verification agencies. HR Planning is a B-BBEE verification agency registered with SANAS and can issue B-BBEE certificates.

New Practice Notes

The B-BBEE commission has been established in October 2015 by the Minister of Trade and Industry, the B-BBEE commission has a mandate to investigate and deal with fronting, fraud, and other BEE transgressions. As it’s a criminal act to knowingly engage in BEE fronting practices, business owners found to have engaged in BEE fronting can be prosecuted. Penalties are up to ten years imprisonment, and a hefty fine of ten percent of turnover, or both. Another consequence – the company may be disqualified from doing any business with state organs or public entities for a period of ten years. These penalties may seem harsh, but government is serious about resolving transgressions and preventing them from occurring in the future.

So far the B-BBEE commission released 3 practice notes on procurement spend, EME’s, QSE’s and how to obtain a non-binding advisory opinion from the commission.

B-BBEE Planning

With the new B-BBEE codes effective, companies are faced with dropping their current B-BBEE status level, which could have a negative effect on their business prospects. In order to obtain a good score and comply with the new increased B-BBEE targets, companies must plan carefully to optimise their points on all 5 elements of Broad-Based Black Economic Empowerment. HR Planning have assisted companies over the last 7 years to implement successful strategies to comply with rules and regulations of the B-BBEE Act. These solutions also help companies understand their current B-BBEE state. HR Planning is a SANAS accredited B-BBEE verification agency and issue valid and reliable B-BBEE certificates across all sectors.

Who needs a B-BBEE scorecard?

The following entities are bound by the Codes and must implement BEE:

  • All organs of state
  • All public entities listed in schedules 2 and 3 of the Public Finance Management Act
  • Any enterprise which undertakes any business with any organ of state or public entity
  • Any private sector business providing goods or services to another business which is subject to measurement under the Codes, may be required to provide evidence of its own level of compliance to its customer and, to that extent, will be subject to measurement under the Codes
  • Companies limited by guarantee
  • Higher Education Institutions
  • Non-profit Organisations
  • Public Benefit Schemes
  • Section 21 companies

Which B-BBEE Scorecard do I need?

Exempt Micro Enterprise (EME) – Turnover less than R5 million
Qualifying Small Enterprise (QSE) – Turnover between R5 million and R35 million
Generic Enterprise (GE) – Turnover over R35 million
EME Tourism Sector – Turnover less than R2 million
EME Construction Sector (BEP) – Turnover less than R1.5 million

New Code of Good Practice 2013:

Exempt Micro Enterprise (EME) – Turnover less than R10 million
Qualifying Small Enterprise (QSE) – Turnover between R10-R50 million
Generic Enterprise (GE) – Turnover more then R50 million

For more information on compiling your B-BBEE scorecard contact HR Planning on 016 018 0059