The amended Broad-Based Black Economic Empowerment (B-BBEE) Construction Codes have been gazetted on 1 December 2017 by the Department of Trade and Industry. These Codes were implemented with immediate effect.
These amended Codes bring some regulatory changes for Exempted Micro Enterprises (EMEs).
When does an entity qualify as an EME?
An entity will qualify as an EME if they are:
- Contractors with a turnover below R10 million per annum
- BEPs with a turnover below R6 million per annum
The above-mentioned entities’ BEE levels will be determined as follows:
- Less than 30% Black Ownership = qualify for a Level 5 B-BBEE Certificate.
- 30%-50% Black Ownership = qualify for a Level 4 B-BBEE Certificate.
- 51% or more Black Ownership = Level 2 B-BBEE Certificate.
- 100% Black Ownership = Level 1 B-BBEE Certificate.
In terms of the amended Construction Codes, entities on which the above-mentioned are applicable to will have to comply with the 40% sub-minimum requirement on the Qualifying Small Enterprise (QSE) Skills Scorecard to avoid being discounted a level.
Certain entities will be exempted from complying with the sub-minimum requirements as explained above and will be issued with an affidavit (and not a BEE certificate):
- Contractors with a turnover below R3 million per annum
- BEPs with a turnover below R1.8 million
QSEs with 51% or more Black Ownership will qualify for an automatic Level 2 B-BBEE Certificate and a 100% Black Owned QSE will qualify for an automatic Level 1 B-BBEE Certificate. They will also have to comply with the 40% sub-minimum requirement on the Skills element or they will be discounted a level.
ABOUT THE AUTHOR
Geralene van Wyk obtained her BA (Psychology) and LLB degrees from the North-West University. After her studies she completed her articles in Pretoria and was admitted as a practicing attorney in 2006 and a conveyancer in 2007. She joined SEESA BEE in 2011 as a legal advisor and is currently a SEESA BEE National Training Senior Legal Advisor at the Pretoria Head Office.