In a follow up from the previous B-BBEE Newsflash regarding the changes in the codes, our CEO, Jonathan Goldberg has been privy to a detailed presentation by the DTI, who confirmed the following:
* The generic scorecard will be reduced to five elements from the current seven.
– Employment Equity and Management Control are merged into one consolidated element, and
– Preferential Procurement and Enterprise Development merged to form a Supplier Development Element.
* Qualifying small enterprises would have to comply with all five elements and would no longer be allowed to choose the best four.
* There has been a review of the turnover threshold that determines what qualifies as an exempted micro and qualifying small enterprise. The exemption remains but threshold changes
* There will be a reduction of overall BBBEE level achieved if sub minimums are not achieved.
* There will also be an adjustment of the recognition level scorecard qualification – An indication thereof below, but changes may have since been made!
The possible enhancement of black owned enterprises.
– Automatic compliance at Level One or Two
Other discussions around the specific elements:-
• Broad based groups currently receive bonus points. There will be more points for such categories in the score.
• The new entrant level will be revised.
• There will be a sub-minimum on net values. In other words, on the repayment of the shares (economic benefit).
• Ownership fulfilment point will be removed.
• The private equity section from the financial services charter will be included.
• Board participation and top management has been cleared up and redefined for clarity. The same applies for senior top management and other top management.
• The compliance targets have been aligned to the EE Commission report.
• This means target is split between African, Coloured and Indian on each indicator.
• There will be a reduction of level achieved if sub minimums are not achieved.
• This element has been re-defined, effectively tightening up what will be considered as allowable spend.
• The learnership matrix has been revised to target “priority” and “related” training.
• Training areas have been aligned to critical areas of Government priorities – Learnerships will include unemployed youth.
• There are sub-minimums that have been set here as well.
• Supplier and enterprise development will be more difficult in future with a substantial review on the cards…Some mentions.
• Procurement from more than 50% black owned and 35% black women owned get enhanced recognition.
• On enterprise development the shorter payment has been revised and tightened up.
The codes will be released for public comment shortly after which we will analyse further. Until then, if there is any significant news we will keep you posted.