Broad-Based Black Economic Empowerment (B-BBEE) first became known in 2003 when the B-BBEE Strategy was published. This set the context for B-BBEE Act, No. 53 of 2003. This Act concretised the prerogative of advancing economic transformation and ensuring that Black people participate more fully in the South African economy.
What Are The Pillars of the B-BBEE Act?
The Pillars of B-BBEE are, simply put, used to measure the extent to which a company complies with the system of B-BBEE. The old Pillars are:
- Ownership,
- Management Control,
- Employment Equity,
- Skills development,
- Preferential Procurement,
- Enterprise development,
- Socio-Economic Development (Social Responsibility).
A couple of years ago, these codes were reduced to five which are:
1. Ownership
According to this component, 100% black-owned enterprises – which have a turnover of under R10 million (EMEs) – receive an automatic level one B-BBEE status. Enterprises – which are more than 51% black owned and have a turnover of under R50 Million (QSEs) – will automatically receive a level two B-BBEE status.
2. Management Control
Management Control is worth 15 B-BBEE points.
3. Skills Development
Skills Development encompasses the development of staff members as well as the granting of learnerships to unemployed individuals. Companies who fulfill this category will earn 20 B-BBEE points with a possible extra five points up for grabs.
4. Enterprise and Supplier Development (ESD):
This represents the greatest change to the prior B-BBEE Scorecard. The amendment encourages companies to develop their underdeveloped suppliers. with mentoring to ensure the latter becomes sustainable and viable.
5. Socio-Economic Development
This category remains the same as it was under the previous B-BBEE Scorecard.
If you want to obtain government and/or parastatal tenders, your organisation needs to keep up their B-BBEE status. In addition, you may need to become B-BBEE accredited in order to maintain your preferred supplier status.
Global Business Solutions’ B-BBEE Bootcamp takes place in Durban from 23 to 24 August 2017. It will teach you everything that you need to know about the B-BBEE Act and how your business can comply with this piece of legislation. For more information, follow this link or contact Stacey on 041 364 0472.