BEE, or rather B-BBEE, is an acronym for Broad-Based Black Economic Empowerment.
B-BBEE is a Government policy with its main objective to redress the economic inequalities that Apartheid caused prior to 1994. The aim is to include all race groups in our economy. During Apartheid, most race groups in South Africa were excluded from participating meaningfully in our economy. This caused a lot of inequalities and poverty.
The intended beneficiaries of B-BBEE are Black South African citizens. Black in terms of B-BBEE includes African, Coloured and Indian citizens of South Africa.
The B-BBEE Act, as well as the Codes of Good Practice (and all the various Sector Codes that were issued in terms of the Act), prescribes certain criteria that business entities must comply with to be deemed B-BBEE compliant.
A B-BBEE scorecard is applied to measure an entity’s level of compliance. B-BBEE compliance levels range from Level 1 to 8, with Level 1 being the best possible B-BBEE rating that can be achieved. If you achieve a Level 8, you are still deemed to be compliant, but your contribution to B-BBEE is seen as less meaningful than that of an entity with a higher level. If you don’t score at least 40 points on the B-BBEE scorecard, you will be considered non-compliant.
Only SANAS-accredited verification agencies can issue an entity with a B-BBEE certificate. SEESA does not issue B-BBEE certificates because we are not a verification agency. We advise our clients on all relevant B-BBEE legislation, and we assist them with strategies to become B-BBEE compliant or improve their current B-BBEE levels. We also assist clients with preparing and submitting verification packs for verification by a SANAS-accredited verification agency. This in itself is an administrative burden for most entities. Large volumes of information and documentation must be submitted to a verification agency, and if you are unsure of what is required or if you don’t know what you are doing, it may cause a lot of frustration, and it may even lead to an inaccurate score. We aim to make this process as simple and easy as possible for each of our clients.
Certain entities are exempted from B-BBEE purely based on their size (in terms of annual turnover) and level of Black ownership in the entity. If you are exempted from B-BBEE, you don’t have to be verified in terms of a scorecard. You automatically qualify for a certain level of compliance without doing anything. This is not to say that these entities do not require any assistance. SEESA can still assist these entities with what they need regarding proof of B-BBEE status and to plan for when the day comes when they are not exempted anymore.
Because B-BBEE is a Government policy, it is imperative to have a B-BBEE certificate if you want to perform any kind of economic activity with the Government. Regarding the B-BBEE Act, it is compulsory for an entity to possess a B-BBEE certificate if you deal directly or indirectly with the State. You will not be considered for any Government tenders without a B-BBEE certificate.
B-BBEE is also not only about ownership of business entities. Ownership is only one of many factors that play a role in developing our economy so that Black people can participate meaningfully. There are many ways in which entities can contribute towards B-BBEE.
Need assistance with B-BBEE in the workplace? Contact your nearest SEESA B-BBEE Legal Advisor. Alternatively, leave your details on our website, and a SEESA representative will contact you.
About The Author:
Bernard du Preez started his career at SEESA in 2011. He is currently the BEE Provincial Manager at the SEESA Pretoria branch. Bernard is an admitted attorney who completed his B.Com (Law) and LLB degrees at the University of the Free State.
Resources:
- B-BBEE Amendment Act 46 of 2013;
- Codes of Good Practice issued in terms of the B-BBEE Act.