The Amended Construction Sector Codes applies to businesses who derive more than 50% of their annual revenue from Construction-related activities and include the following:
Contractors – conduct construction project activities including Civil Engineering, Electrical Engineering, power transmission, general building, specialist construction works e.g. wiring, air-conditioning, heating, asphalt work, excavations, scaffolding, and support, shop-fitting, structural steelwork, water-proofing, etc.
Build Environment Professional (BEP) – planning, design, and costing of construction projects, e.g. consulting engineers, architects, quantity surveyors, town planners, etc. It also includes project management and design of the construction value chain including environment, energy, industrial, property, transport, and infrastructure.
Construction Material Suppliers – manufacturing, creation, or supply of building material and equipment used in construction e.g. cement, concrete, bricks, electrical equipment, steel, plant hire, plumbing, etc.
How to determine B-BBEE levels for EME and QSE Entities
Exempted Micro Enterprises (EME) are companies with a total annual turnover of less than R10 million for Contractors and a total annual turnover of less than R6 million for BEP’s.
Qualifying Small Enterprises (QSE) are companies with an annual turnover of between R10 million and R50 million for Contractors but in the case of BEP’s an annual turnover of between R6 million and R25 million.
As with the Codes of Good Practice, the Construction Sector Codes also makes provision for automatic levels, but recognition is also granted even if the company is less than 51% black-owned.
- Less than 30% black ownership qualifies for an automatic level 5 B-BBEE certificate
- Between 30% and 50%, black ownership qualifies for an automatic level 4 B-BBEE certificate
- 51% or more black ownership qualifies for an automatic level 2 B-BBEE certificate
- 100% black ownership qualifies for an automatic level 1 B-BBEE certificate
The above mentioned is only applicable to BEP’s whose annual turnover is below R6 million and Contractors whose annual turnover is below R10 million. It is important to remember that a sub-minimum requirement for Skills is applicable here (please contact your legal advisor to confirm this requirement).
There are no automatic level 4 and 5 available for QSE entities.
Should an entity qualify for an automatic B-BBEE Certificate as mentioned above, there are further options for level enhancement also available to them. Your Legal Advisor will assist you in explaining the different options.
Should an entity have an annual turnover of below R1.8 million (BEP) and below R3 million (Contractor) they qualify for an automatic B-BBEE Affidavit. The same levels will be applicable as mentioned above. These entities do however not have to comply with the 40% sub-minimum requirement.
Sources:
Broad-Based Black Economic Empowerment Act 46 of 2013
Amended Construction Sector Codes of Good Practice
About the Author
Lezé Jonker started her career at SEESA in 2017 and is currently working as a BEE and Labour Legal Advisor at SEESA Port Elizabeth. She completed her LLB degree at UNISA.