Amendments to the Codes of Good Practice

On the 31^st of May 2019 the following amendments were gazetted by the Department of Trade and Industry (DTI) in Gazette 42496:

• Schedule 1 of the Amended Codes of Good Practice;
• Amended Code Series 000, Statement 000;
• Amended Code Series 300, Statement 300;
• Amended Code Series 400, Statement 400

The following is just some of the changes that will have an effect on your Broad Base Black Economic Empowerment (B-BBEE) Rating.

Firstly, the definition of Absorption has been amended. The new definition reads as follow:

“Absorption – means a measure of the Measured Entity’s ability to successfully secure long-term contract of employment for the Employee, Learner, Intern of Apprentice.”

This means that further education of a learner after completion of the learnership, will not qualify as absorption any longer. 

In terms of the amendments to Statement 300 (Skills Development), it is important to take note of the following amendments:

• The target for the amount that needs to be spent on skills expenditure for black people have been amended to 3.5% of the leviable amount;
• There is a new indicator specifically for skills expenditure on Bursaries for black students at Higher Education Institutes.  The target for this indicator is 2.5% of your leviable amount;
• The target for learnerships, internships and apprenticeships have been increased to 5% of your total employees;
• The indicator of training spends on unemployed black people have been deleted.
• Scholarships have also been included in the Skills Development Learning Program Matrix;

The important amendments in terms of Statement 400 (Enterprise & Supplier Development including Preferential Procurement) are as follows:

• The target for B-BBEE Procurement spend from Empowering Suppliers that are at least 51% Black Owned has been increased from 40% to 50%
• The weighting on this indicator has also been increased from 9 to 11 points out
• Another amendment that was introduced was that a 51% black-owned generic company may qualify for Enterprise or Supplier Development.  The Generic entity will however only qualify on the provision that at first instance of receiving assistance from the Measured Entity it was an EME/QSE (51% or more black-owned).  This provision is also only applicable for 5 years from the first time of receiving assistance from the Measured Entity.
• Your Enterprise Development beneficiary is not part of the Measured Entity’s supply chain.

The amendments as published will be for implementation within 6 (SIX) months from date of the Gazette.  This means the abovementioned amendments will become applicable on the 1^st of December 2019.

If you have done your B-BBEE planning and expenditure in terms of the codes that was applicable at the time of your financial yearend, it is important to submit your verification before the abovementioned amendments come into effect.  The amendments will come into effect regardless of your financial year-end.

Please make sure you contact your SEESA BEE Legal Advisor should you have any enquiries regarding the new amendments.