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Amended General B-BBEE Codes of Good Practice



The inclusion of ‘Rural’ in the criteria of the Generic Codes

of Good Practice (Codes) alludes to the government’s

commitment to Rural Development that identifies

infrastructure, poverty, land reforms, education and

unemployment, amongst others.

In August 2012, the National Development Plan (NDP) was

launched by the National Planning Commission, where the aim is

to “eliminate poverty and reduce inequality by 2030”. According

to the plan, South Africa can realise these goals by drawing on

the energies of its people, growing an inclusive economy, building

capabilities, enhancing the capacity of the state and promoting

leadership and partnerships throughout society.

In conjunction with the Codes and Sector Codes of Good

Practice, the NDP encourages initiatives to enhance ‘Black’

socio-economic circumstances in ‘Rural’ and ‘underdeveloped

areas’ where it targets: (1)

> Infrastructural development projects;

> Reconstruction of underdeveloped areas; or

> Urban renewal programmes (2).

The word ‘Rural’ pertains to people or groups of people and

forms part of the criteria in three elements of the Codes, namely

Ownership, Enterprise & Supplier Development and

Socio-Economic Development.

Although Schedule 1, which features in Gazette #42496,

contains definitions and interpretations, there is no definition

for the word ‘Rural’ or an ‘underdeveloped area’. However, a

B-BBEE Rating Agency must substantiate the assertion

of ‘Rural’ or an ‘underdeveloped area’ during a B-BBEE

Verification to allow the awarding of points in the elements

either appears.

Each B-BBEE Rating Agency has its processes to determine a

‘Rural’ or ‘underdeveloped area’. This article aims to unpack what

evidence an organisation needs to present to confirm a ‘Rural’ or

‘underdeveloped area’. Generally, a B-BBEE Rating Agency will

take the following into account

> The 2008 Verification Manual guides that the answer lies in an

area’s postal code with an accompanying proof of residence

from a tribal chief or proof of postal address (5).

> The Rural Development Task Team published the Rural

Development Framework in 1997. It defined ‘Rural’ areas

as “sparsely populated, in which people farm or depend on

natural resources, including villages and small towns dispersed

throughout these areas. In addition, they include large

settlements in the former homelands, created by apartheid

removals, which depend for their survival on migratory labour

and remittances” (3).

> Schedule 1 of the Amended Construction Sector Code of

Good Practice refers to “Communities with Limited Services”,

which makes reference to the Population Census:

“The latest STATS SA census results filtered to local municipality

level determine the following:

a Do less than 65% of the households have access to piped

water? or

b Do less than 85% of the households have access to

electricity? and

c In addition to (a) or (b), do more than 50% of the households

have an average household income in the first five levels -

including none - of the income data table.” (4).

As this Sector Code is the only one across all sets of codes with an

interpretation, one can use this as an indicator to some degree to

determine a ‘Rural’ or ‘underdeveloped area’ for B-BBEE purposes.

Thus based on the Construction Sector Code’s definition, STATS

SA can be a source of evidence when qualifying a ‘Rural’ or

‘underdeveloped area’.

The Population Census takes place every ten years. Community

Surveys take place every five to six years. The last Population Census

data is from 2011, with the next one scheduled for this year.

Census Population Data can be found on the STATS SA website

under the “Find Statistics” tab. You can search by “Theme”,

“Place”, “Indicators” and “Sustainable Development Goals (SDG)”.

Under the “By Place” option, searches for areas can be done by

Municipality, with an option to select smaller areas or places for

specific statistics.

A person claiming residence in a ‘Rural’ area would have to confirm

this status year on year.

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