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What you need to know about BBBEE Codes and Compliance


One of the main topics discussed and unpacked during the Supplier Development Workshops hosted by the Gauteng Provincial Treasury is the B-BBBEE Codes and Compliance. Deputy Director: BBBEE, Sphiwe Ndlovu from Gauteng Department of Economic Development gave more insight into this policy.

B-BBBEE stands for Broad-Based Black Economic Empowerment and means the viable economic empowerment of all black people, particularly black women, black youth, black people living disabilities and people living in rural areas.

This is achieved through diverse but integrated socio-economic strategies that include amongst others increasing number of black people that manage, own, control enterprises and productive assets. Ndlovu also explains the Codes of Good Practice were designed as a framework to guide business to contribute to a better South Africa.

Ndlovu gives the top 7 tips every business owner should know about BBBEE Codes and Compliance.

  1. B-BBEE certificate/affidavit is only valid for 1 year.

  2. The Trumping Clause Provision which stipulates that in the event of any conflict between the B-BBEE Act and any other law in force immediately prior to the date of commencement of the B-BBEE Act, where such conflict relates to a matter dealt with in the B-BBEE Act as amended, the B-BBEE Act shall prevail.

  3. 3 elements of the codes have been identified as priority elements with subminimum targets of 40% each. Those priority elements are Ownership, Skills Development and Enterprise Development.

  4. Missing a sub-minimum target in one or more of the priority elements results in discounting your BEE level by one level e.g. Level 6 (Recognition Level) would become Level 7 (Recorded Level).

  5. 'Black People' is a generic term which means Africans, Coloureds and Indians;

  6. (a)who are citizens of the Republic of South Africa by birth or decent; or

  7. (b)Who became citizens of the Republic of South Africa by naturalization

  • Before 27 April 1994

  • On or after 27 April 1994 who would have been entitled to acquire citizenship by naturalisation prior to that date

Ndlovu also lists the top 5 tips every business owner should know, in order to not violate BBBEE Codes:

  1. Know the definition of black.

  2. Know and understand what ownership means.

  3. Be aware of fronting and what it means.

  4. Subject to section 9(6), an enterprise in a sector in respect of which the Minister has issued a sector code of good practice in terms of section 9, may only be measured for compliance with the requirements of broad-based black economic empowerment in accordance with that code.

  5. Enterprises operating in a sector in respect of which the Minister has issued a sector code of good practice in terms of section 9, must report annually on their compliance with broad-based black economic empowerment to the sector council which may have been established for that sector.



Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER

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