It comes as no surprise that in the midst of the COVID-19 pandemic businesses have been tried and tested, encountering terrible challenges and unfortunately with many barely managing to weather the storm.
The state of optimism
might be regarded as an unusual expectation right now but the reality is this:
The COVID-19 pandemic will pass, we shall overcome this and we shall continue
with our respective business operations. Now is as good a time as any to be
inventive, resourceful
and productive to work towards achieving that long-desired growth and expansion
of your business.
With reference to many businesses in dire financial distress and its subsequent search for financial relief, the government and its various sectors have announced relief schemes in conjunction with each of its own set of qualifying requirements. On 7 April 2020, Tourism Minister Mmamoloko Kubayi- Ngubane announced that The Tourism Relief Fund (“the Fund”) is effective and open to applicants. One of the requirements holds that the Fund will be guided with the objectives of Economic Transformation and the Tourism B-BBEE Sector Codes. It goes without saying that it will be highly improbable for B-BBEE non-compliant entities within the Tourism Sector to be granted any relief from The Fund. Tourism Minister Ngubane is adamant to commit to the current criteria and added that The Tourism Relief Fund is open to providing relief to businesses which are compliant with the various South African legislative measures for businesses.
It is, however, important to note that B-BBEE compliance is not a legislative requirement. In simple terms, it is not a legal requirement for businesses to undergo a B-BBEE verification to conduct their respective business operations. This certainly raises the question about the validity of the criteria set forth by Tourism Minister Ngubane. As explained, the Minister is acting in accordance with Section 10 of the B-BBEE Codes of Good Practice which states that: “every organ of state… must comply with any relevant code of good practice issued in terms of this Act in determining criteria for the awarding of incentives, grants and investments schemes in support of broad-based black economic empowerment”.
The consequences of B-BBEE non-compliance might not always appear to be prioritised but it does negatively impact your business one way or another. The latter is evitable as we have already listed one example of a negative impact resulting in missed opportunities in a desperate search for relief in dire and critical times.
Here’s why taking a step towards obtaining a SANAS accredited B-BBEE verified status creates the ultimate x-factor for your business… The Procurement and Supply cycle. There is an existing misconstrued concept of belief that having a B-BBEE verified status would only be rewarding to entities engaging in government tender processes. On that note, herewith an example of the negative impact on Company X – a non-compliant B-BBEE entity not engaging in tender applications:
Company A, a B-BBEE compliant entity, is awarded a tender from the government to supply furniture to all schools. Company A has no existing operations providing the required materials, assembly or installation of the furniture. Company A, awarded with a tender as a result of its B-BBEE Compliance status, needs to maintain its B-BBEE status by procuring from other B-BBEE compliant entities. Company A approaches Company B, a B-BBEE Compliant company, for installation of furniture. As a result, Company B is contracted for the project. Company A approaches Company X to provide the materials, however, the non-compliant status of Company X affects the B-BBEE status and rating of Company A and in return affecting the prospects of Company A being awarded more tender projects. Company A therefore rather approaches and contracts with Company E for the supply of materials.
The journey to an accredited B-BBEE compliant status does not have to be a challenging process and it very seldom requires making changes to existing shareholding structures. With SEESA professional B-BBEE consultancy expertise and assistance, ensuring the best possible outcome with cost-effective measures, businesses are well on their way to greater opportunities. Be excited and get on board with our legal professional services ensuring optimal success.
SEESA has always been committed to providing ongoing quality service to all of our clients, should you require any assistance or require any other BEE related advice, please contact your nearest SEESA office and/or SMS “SEESA” to 45776 and a Legal Advisor will contact you. All SEESA BEE Legal Advisors are available during the lockdown.
ABOUT THE AUTHOR:
Anzette Visser is an Admitted Attorney and a SEESA BEE Legal Advisor in Pretoria. She obtained her BA.LLB degree from the North-West University, starting her career at SEESA in 2018.