Aug 271 min read

CONDITIONS ATTACHED TO BENEFICIARY DELIVERABLES

Incorporating accountability clauses in Enterprise Development or Supplier Development agreements is essential for securing investments, but it must be balanced with the guidelines of Clause 4.12 in Statement 400 of the Amended General B-BBEE Codes of Good Practice. This clause encourages Measured Entities to develop comprehensive plans for Qualifying Beneficiaries that include clear objectives, priority interventions, key performance indicators (KPIs), and a concise implementation plan with articulated milestones. Imposing strict accountability without considering these elements can be punitive and counterproductive. A more holistic approach that focuses on empowerment and growth, while still ensuring accountability, can lead to sustainable and successful outcomes for both the organization and the Beneficiary.

More often than not when organisations enter into a relationship with an Enterprise Development or Supplier Development Beneficiary, it wants a guarantee that their investment will be successful. Hence, many choose to incorporate accountability clauses to secure their investment. However, Clause 4.12 in Statement 400 of the Amended General B-BBEE Codes of Good Practice states:

"4.12 Measured Entities are encouraged to develop and implement an Enterprise Development plan and Supplier Development plan for Qualifying Beneficiaries. The plan should include:

4.12.1 Clear Objectives;

4.12.2 Priority Interventions;

4.12.3 Key Performance indicators; and

4.12.4 A concise implementation plan with clearly articulated milestones".

Placing accountability conditions on Beneficiaries may be punitive without taking into account all factors in clause 4.12.

Enterprise & Supplier Development Services are on hand to guide organisations before entering into a contractual agreement with a Beneficiary, as Sector Codes may have differing requirements.