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Statistics South Africa is the source used to determine the Net Profit After Tax (NPAT) for calculating the targets for Enterprise Development, Supplier Development and Socio-Economic Development. The latest statistics  were published during December 2024. The statistics in this version will be for the 3rd quarter of 2024.   Any B-BBEE Verification from hereon would most commonly apply the latest Industry Norm published by Statistics South Africa. For example, if a B-BBEE Verification takes place in January 2025, the latest published stats to be used would be those posted during December 2024.    Technical Compliance Services  is available to guide members in calculating their Targets.

On 20 December 2024, Norton Rose Fulbright South Africa Incorporated made an application to the High Court of South Africa raising concerns on the implementation and practical components of the Legal B-BBEE Sector Codes Of Good Practice. The Founding Affidavit  sights many concerns over certain areas of the Legal B-BBEE Sector Codes Of Good Practice which seek to be addressed. The BEE Chamber will be watching this space very closely and looking forward to the way onward on the implementation of the Legal B-BBEE Sector Codes Of Good Practice. Technical Compliance Services  are available to guide Members on the status of the Legal B-BBEE Sector Codes Of Good Practice.

The concept of “Black New Entrants” is found under the Ownership scorecard whereby the Amended General B-BBEE Codes of Good Practice allows for Two Points to be scored based on a 2% Compliance Target.   The definition contained under Schedule 1 of the Amended General B-BBEE Codes of Good Practice  defines “Black New Entrants” as “ Black participants who hold rights of ownership in a Measured Entity and who, before holding the Equity Instrument in the Measured Entity, have not held equity instruments in any Entity which has a total value of more than R50,000,000.00 measured using a standard valuation method.”   Technical Services  are on hand to assist with the understanding of the above and how it is recognised.

Although entering into an Enterprise or Supplier Development loan contract is generally done with the best intentions, some loans issued will inevitably be defaulted on or, in the worst case, a Beneficiary will refuse to repay it. When giving a loan, an organisation has the full rights of recovery; however, this has to be clear in the terms and conditions. First and foremost, a loan must take the form of a debt instrument; thus, it must never be a grant disguised as a loan.   Any loan made with the intention of not receiving repayment of the capital amount is not a loan but a grant and must be claimed as such. Consequently, claiming a loan under Enterprise or Supplier Development instead of a grant is Fronting Practice.   However, if a beneficiary fails to repay a bona fide loan, an organisation may offer a Beneficiary a grant which will allow them to repay the loan. Otherwise, an organisation can write off the loan or follow the legal route based on the terms and conditions of a particular loan.   Enterprise & Supplier Development Services are available to guide Members to ensure their contracts align with the requirements of the relevant code.

A B-BBEE Code of Good Practice is a framework of measurement on a Measured Entity scores points to achieve a specific B-BBEE Status Level. It consists of all principles, calculations, and methodologies on how this is executed.   As per Clause 3 of Statement 000 of the Amended General B-BBEE Codes of Good Practice , the following is stated:   3. APPLICATION OF THE CODES   3.1 The   following Entities are measurable under the Codes:     3.1.1 all Organs of State and Public Entities;   3.1.2 all Measured Entities that undertake any economic activity with all Organs of State and Public Entities;   3.1.3 any other Measured Entity that undertakes any economic activity, whether direct or indirect, with any other Measured Entity that is subject to measurement under paragraph 3.1.1 to 3.1.2 and which is seeking to establish its own B-BBEE compliance.     Technical Services  are on hand to assist with the understanding of the above.

Some time ago, the B-BBEE Policy Unit published a FAQ document online which assisted the implementation of B-BBEE Legislation. One of the FAQs included the rules around a Commissioner of Oaths which stated:   Q -  Can a B-BBEE affidavit (Sworn Affidavit) be commissioned by a Commissioner of Oaths connected to the deponent that is an EME or QSE with more than 51% ‘Black’ Ownership? For example, ABC Traders’ Financial Director is a Commissioner of Oaths; can that person commission its Sworn Affidavit?   A -  Commissioner of Oaths must be independent as per the Justices of the Peace and Commissioners of Oath Act. Therefore, ABC Traders may not have its Financial Director commission their Sworn Affidavit   Technical Services  are available to assist Members in further understanding the above.

Some time ago, the B-BBEE Policy Unit published a FAQ document online which assisted the implementation of B-BBEE Legislation. One of the FAQs included the evidence necessary for Absorption which was stated as follows:   Q -   What evidence is necessary for Absorption at a B-BBEE verification?   A -  The following evidence will confirm a claim for Absorption at a B-BBEE verification: A learnership completion certificate or agreement; An affidavit by the learner; An interview; An offer and acceptance of employment; A permanent employment contract or confirmation letter and payslip.   The permanent employment contract needs to meet the definition of “Absorption” under Schedule 1 of the Amended General B-BBEE Codes of Good Practice or relevant B-BBEE Sector Codes of Good Practice.   Human Capital Services  are available to assist members in understanding Absorption requirements.

On 25 November 2024, judgement was handed down regarding a matter involving Dimension Data Facilities (Pty), Dimension Data Investments South Africa (Pty) Ltd, NTT Limited and others. The matter pertained to the element of Ownership and how certain structures circumvent the objectives of Broad-Based Black Economic Empowerment.   A part of the Summary of the High Court Case Judgement  stated the following:   Broad-based Black Economic Empowerment Act 53 of 2003 - Conspiracy by senior executives of a group of companies to use en comandante / Limited Partnerships and Private Equity Fund Management structures to circumvent the objects of the Broad-based Black Economic Empowerment Act 53 of 2003 and the codes of good practice.   Ownership Services  are available to assist members in understanding Ownership requirements as well as Fronting Practices.

As per Schedule 1  of the Amended General B-BBEE Codes of Good Practice, a Black Designated Group Supplier is defined as follows: “means a supplier to the Measured Entity that is at least 51% owned by one or more of the following categories of ownership within its structure: (a) unemployed black people not attending and not required by law to attend an educational institution and not awaiting admission to an educational institution;     (b) Black people who are youth as defined in the National Youth Commission Act of 1996;    (c) Black people who are persons with disabilities as defined in the Code of Good Practice on employment of people with disabilities issued under the Employment Equity Act;                            (d) Black people living in rural and under developed areas;    (e) Black military veterans who qualifies to be called a military veteran in terms of the Military Veterans Act 18 of 2011;”   The above definition/concept is applied under the elements of Ownership and Enterprise & Supplier Development Amended General B-BBEE Codes of Good Practice.   Technical Services  are available to assist Members in further understanding the above as well as the application thereof.

Persons with disabilities are the largest marginalised group globally.   Paragraph 2.1.1.3 under Statement 300  of the Amended General B-BBEE Codes of Good Practice encourages the inclusion of persons with disabilities in terms of Bursaries, Learnerships, Internships, Apprenticeships and any other training initiative. The clause is stated as follows:   “2.1.1.3 Skills Development Expenditure on Learning Programmes specified in the Learning Programme Matrix for 'Black' employees with disabilities as a percentage of Leviable Amount”. The points on offer are four with a 0.3% target.”   Human Capital Services  are available to assist members in implementing sustainable Skills Development Strategies for Persons with Disabilities.

As per Schedule 1 of the Amended General B-BBEE Codes of Good Practice , 51% Black Owned and 51% Black Women Owned is defined as follows:   “51% Black Owned means an Entity in which:   (a)      Black people hold at least 51% of the exercisable voting rights as determined under Code series 100; (b)     black people hold at least 51% of the economic interest as determined under Code series 100; and (c)      has earned all the points for Net Value under statement 100;”   “51% Black Women Owned means an Entity in which:   (a)      Black women hold at least 51% of the exercisable voting rights as determined under Code series 100. (b)     Black women hold at least 51% of the economic interest as determined under Code series 100; and (c)      has earned all the points for Net Value under statement 100;”   Technical Compliance Services  are available to assist Members in understanding definitions under Schedule 1 of the Amended General B-BBEE Codes of Good Practice.

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 B-BBEE Sector Codes of Good Practice may have differing requirements.