The dti issued Gazette 40997 on 21 July 2017. It dealt with 2 issues:
- Appointing the dti B-BBEE unit as the B-BBEE Verification Professional Regulator.
This means that the B-BBEE unit will have to work together with SANAS to regulate Verification Agencies, or as they are called in the Draft, Rating Agencies. The dti will then have to work with consultants and other businesses to regulate other areas of the B-BBEE playing field. - The issue of draft changes to Statement 005 for 60-day comment.
Statement 005 deals with the Verification industry to ensure that certificates remain credible. This is part of the continued movement towards professionalising the B-BBEE space and is to be welcomed.
B-BBEE Verification Professional Regulator
There are concerns regarding the appointment of the B-BBEE unit as B-BBEE Verification Professional Regulator:
- There are now multiple dti bodies involved in the regulation of B-BBEE. We have SANAS, the accreditation body, the BEE unit, acting as the regulator, and then the BEE Commission, who are taking an active role in regulating and reviewing matters such as fronting, BEE transactions, and issuing opinions and notes on the interpretation of codes. Do we need these multiple agencies? Will confusion arise as to their roles and responsibilities?
- Does the BEE unit have the people with the knowledge to perform these duties and to liaise and regulate the 62 SANAS accredited agencies, and the ex-IRBA agencies currently in the process of being accredited by SANAS? Not to mention the B-BBEE consultants.
Draft Statement 005
Draft Statement 005 covers all people who work with rating the BEE status of a business, or an accredited rating agency. Does this mean that people within the business itself who are responsible for or involved with setting and implementing the company’s BEE strategy, or preparing the information for rating are also Verification Professionals subject to the training and regulation requirements of this statement? Or does it just refer to the BEE consultants, and people at the Ratings Agencies. If it includes employees we are now talking a cost, as these people will all need to perform and pass what used to be called the BEE MDP, or is now called the “B-BBEE Capacity Development Programme”. This is a 5-day course at either Wits or UNISA. When I did the course at Wits, it cost R15,000 excluding VAT, travel and accommodation.
The objectives of the statement include setting ethical standards (impartiality, competence, responsibility, openness, confidentiality and complaint resolution), education standards, certificates and reports, and standards for accreditation and withdrawal of accreditation.
Educational requirements are a minimum of the following:
- BEE Verification Professionals must have passed the BEE Capacity Development programme
- BEE Verification Professionals must have:
- Passed the BEE Capacity Development programme
- 3 years relevant technical experience with practical implementation and verification
- 1-year managerial experience
- Undergone a technical exam
What happens with people who already perform this function? Will they need to pass the exam and meet the above requirements?
These educational requirements are not a bad idea, as we need to professionalise the industry. The codes are so badly written and subject to interpretation, so we need people with a strong business grounding, and educational background to implement strategies.
All certificates issued by a rating agency must be uploaded onto the certificate portal to be managed by the BEE commission within 5 days of issue. All certificates issued before the commencement of this statement, and which are valid at commencement date must also be uploaded.
BEE requirements for verification and rating agencies
Verification agencies or rating agencies must:
- Be rated between levels 1 and 3 on their BEE scorecard. This level must be achieved within 12 months of implementation of the amended Statement 005.
- Have at least 51% black ownership using the Flow Through Principle.
- Be rated against all 5 elements of the scorecard, irrespective of size, so if they are an EME or QSE they cannot rely on an affidavit, or if an EME, a certificate from CIPC.
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