Thresholds for Major B-BBEE Transactions
The Department of Trade and Industry published Government Gazette number 40898 on 9 June 2017 which set out the final thresholds for the registration of Major B-BBEE Transactions with the BEE Commission. This document can be downloaded here.
All major B-BBEE transactions which exceed R25 million must be registered with the B-BBEE Commission. If the transaction was finalised after 24 October 2014, the transaction must be registered with the Commission within 2 months of the publication of this Notice. The B-BBEE Commission will then assess the transaction and provide input.
This requirement excludes Ownership recognised in terms of Statement 103 – Recognition of Ownership contributions made by Multi-National Companies.
A major B-BBEE transaction is any transaction exceeding R25 million that has resulted, or will result in a Measured Entity claiming ownership points on the Scorecard in terms the BEE Codes of Good Practice. The Notice provides that the transaction value excludes administration, professional and any legal fees.
The documents to be submitted to the B-BBEE Commission are not defined but should be as prescribed by the B-BBEE Commission.
Construction Sector Code
The Department of Trade and Industry published the Draft Amended Construction Sector Codes on the 28th October 2016 for public comment. There will be no transitional period so the sector code will be applicable from date of gazetting. All construction sector companies will be measured in terms of this new Code.
The Draft Amended Construction Sector Code includes three segments of the value chain, namely, Built Environmental Professionals, Constructors (General Build) and Manufacturers and Suppliers of building material, plant hire and equipment.
Any White owned construction EME will have an opportunity to increase their B-BBEE level contribution by 1 level if they spend 100% on Skills Development and Enterprise Development as set out in the Qualifying Small Enterprise scorecard.
The completion and signing of the EME Affidavit will not be allowed in the Construction Industry to avoid the fraud. The Construction Sector Charter Codes will prescribe a nominal fee for the issuing of these EME certificates.
Additional points allow construction companies to obtain more bonus points when they spend on initiatives that give priority to designated beneficiaries such as black women, black women owned enterprises, youth, people with disabilities and construction employees.
The Draft Scorecard for Generic companies is as follows:
| Element | Weighting | |
| Contractors | BEP’s | |
| Ownership | 27 + 4 bonus points | 27 + 4 bonus points |
| Management Control | 18 +4 bonus points | 18 + 4 bonus points |
| Skills Development | 21 + 5 bonus Points | 29 + 5 bonus Points |
| Preferential Procurement and Supplier Development | 34 + 4 bonus points | 27 + 3 bonus points |
| Socio-Economic Development | 5 + 1 bonus point | 5 + 1 bonus point |
| Total | 105 + 18 bonus points | 106 + 17 bonus points |
The Draft Scorecard for QSE companies is as follows:
| Element | Weighting |
| Ownership | 27 + 3 bonus points |
| Management Control | 20 points |
| Skills Development | 24 + 2 bonus Points |
| Preferential Procurement and Supplier Development | 29 points |
| Socio-Economic Development | 5 points |
| Total | 105 + 5 bonus points |
The compliance target for Ownership has increased on the Construction Charter Code to the following percentages:
- 3% from year 1 to year 4
- 35% from year 5
The compliance target for Skills Development in the Construction industry has been set as follows:
- 2% for the first 2 years
- 5% over year 3 and 4; and
- 3% after year 5 for both Contractors and BEP’s
Bonus points have been allocated to recognise initiatives that promote black employees who complete mentorship programmes during the last 3 years of the measurement period for 2 points and on the number of black employees who registered with an professional industry body for 2 points.
Under Procurement, only procurement from Entities that are 35% Black Women owned are scored, under the General codes this is 30% Black Women Owned. There are bonus points for procurement from 51% black owned, or 51% Black Designated Group Owned and 35% black women owned suppliers.
There is no Enterprise Development, instead points are scored for:
- Compliant with Supplier and Contractor development Programmes
- Supplier Development programmes
- Supplier Development programmes made to entities that are 51% Black Women owned.
If you have any B-BBEE consulting needs, please contact either Charlene Skipp on [email protected] (083 780 7209) or me on [email protected] (083 440 2130).
Kind regards,
Richard Ryding