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Early payments apply to Supplier Development Beneficiaries only. Clause 3.7 in Statement 400 of the Amended General B-BBEE Codes of Good Practice  outlines the definitions, as well as the only circumstance in which a Large Enterprise can qualify for early payments:   “3.7 Beneficiaries of Supplier Development or Enterprise Development are EMEs, QSEs or Generic Entities which are at least 51% Black Owned or at least 51% Black Women Owned utilizing the flow through principle. However, in terms of Generic Entities, this is based on the provision that at the first instance of receiving assistance from the Measured Entity, it was identified that such suppliers were EMEs or QSEs. This recognition for Generic Entities will only be allowed for 5 years from the first time of receiving assistance from the Measured Entity.”   Enterprise & Supplier Development Services  are available to help members determine how to claim Early Payments.

As per Schedule 1 of the Amended General B-BBEE Codes of Good Practice, a B-BBEE Controlled and B-BBEE Owned Company is defined as follows:   “ B-BBEE Controlled Company  means a juristic person, having shareholding or similar members interest, in which black participants enjoy a right to Exercisable Voting Rights that is at least 51% of the total such rights measured using the Flow Through Principle”   “ B-BBEE Owned Company means a juristic person, having shareholding or similar members interest, that is B-BBEE controlled, in which Black participants enjoy a right to Economic Interest that is at least 51% of the total such rights measured using the Flow Through Principle;”   Technical Compliance Services  are available to assist Members in understanding definitions under Schedule 1 of the Amended General B-BBEE Codes of Good Practice.

The SANAS Website  publishes information on all accredited B-BBEE Rating Agencies, which, apart from the contact details, includes:   o   The unique SANAS accreditation number; o   The date of SANAS accreditation and the expiry; o   The status of accreditation, which could include one of the following: Accredited | A B-BBEE Rating agency has successfully passed the SANAS accreditation process and applied to retain its status as a SANAS Accredited B-BBEE Rating Agency. Expired | When a B-BBEE Rating Agency has allowed its SANAS Accreditation to expire. Withdrawn | Where a B-BBEE Rating Agency either voluntarily or involuntarily withdraws its accreditation. Suspended | SANAS has issued a B-BBEE Rating Agency with a serious non-conformance/s regarding their B-BBEE Verification processes and procedures that needs to be addressed. A B-BBEE Rating Agency may retain its accreditation status depending on the result of actions implemented.   o   The scope of Accreditation, which is a certificate that states what B-BBEE Code of Good Practice they are accredited to measure. For example, there may be an accreditation allowing a B-BBEE Rating Agency to conduct a B-BBEE Verification on the General, Construction and Financial Services B-BBEE Codes of Good Practice. However, without specific accreditation, it would not be able to conduct a B-BBEE Verification on the Tourism B-BBEE Sector Codes of Good Practice.   Therefore, before choosing a B-BBEE Rating Agency, an organisation must check its Scope of Accreditation to ensure that it can conduct a B-BBEE Verification on the relevant Sector Code of Good Practice. If a B-BBEE Rating Agency conducts a B-BBEE Verification on a Sector Code of Good Practice they are not accredited to measure, the B-BBEE Certificate issued on this basis will be null and void.   B-BBEE Verification Services  are available to advise Members in relation to this area.

On 29 October 2024, the Legal Practice Council issued an Updated Notice of Frequently Asked Questions  on the Legal B-BBEE Sector Codes of Good Practice.   The Introduction of this document stated the following:   “The LPC is aware that practitioners require clarity on the Legal Sector Code (LSC) gazetted on 20 September 2024. The Charter Council, which is in the process of being set up, will on its establishment, engage with practitioners and provide information, clarification and guidance. In the meantime, the LPC requested the Legal Sector Code Steering Committee to compile the FAQ below to provide some clarity.”   The BEE Chamber looks forward to further clarity on certain areas of the Legal B-BBEE Sector Codes of Good Practice for effective implementation.   Technical Compliance Services  are available to advise how members in relation to the Legal B-BBEE Sector Codes of Good Practice.

Under Statement 400 of the Amended General B-BBEE Codes of Good Practice , there are allowable exclusions when calculating Total Measured Procurement Spend (TMPS) and one of those items include Imports. However, there are certain rules that need to be considered.   Clause 6.5 under Statement 400 of the Amended General B-BBEE Codes of Good Practice states the following:   6.5       Imports: the following imported goods and services: 6.5.1    imported capital goods or components for value-added production in South Africa provided that:   6.5.1.1 there is no existing local production of such capital goods or components; and 6.5.1.2     importing those capital goods or components promotes further value-added production within South Africa;   6.5.2    imported goods and services other than those listed in paragraph 6.5.1 if there is no local production of those goods or services including, but not limited to, imported goods or services that – 6.5.2.1     carry a brand different to the locally produced goods or services; or 6.5.2.2     have different technical specifications to the locally produced goods or services.   6.5.3    The exclusion of imports listed under 6.5.2 are subject to them having developed and implemented an Enterprise Development and Supplier Development plan for imported goods and services. This plan should include:   6.5.3.1 Clear objectives 6.5.3.2 Priority interventions 6.5.3.3 Key performance indicators; and 6.5.3.4 A concise implementation plan with clearly articulated milestones             6.5.4    The Department of Trade and Industry will from time to time consult with the industry and issue practice notes with regard to the provisions on import exclusion.   Enterprise & Supplier Development Services  are available to assist Members meeting the requirements for Import Exclusions.

Under Statement 300 of the Amended General B-BBEE Codes of Good Practice , clause 6 lists various Legitimate Recognisable Training Expenses under the element of Skills Development.   Clause 6 states the following:   6. LEGITIMATE RECOGNISABLE TRAINING EXPENSES   6.1.1 costs of training materials; 6.1.2 costs of trainers; 6.1.3 costs of training facilities including costs of catering; 6.1.4 scholarships and bursaries; 6.1.5 course fees; 6.1.6 accommodation and travel; and 6.1.7 Administration costs such as the organization of training including, where appropriate, the cost to the Measured Entity of employing a Skills Development facilitator or a training manager.   Skills Development Services  are available to assist members to ensure that they claim all Legitimate Recognisable Training Expenses under the element of Skills Development.

Schedule 1  defines a ‘Voting Right’ as a Voting Right attaching to an Equity Instrument owned by or held for a participant, measured using the Flow-through Principle or the Control Principle. An ‘Exercisable Voting Right’ is a Voting Right of a Participant that is not subject to any limit.   Therefore, an ‘Exercisable Voting Right’ is not a ‘Voting Right.’ The difference between the definitions is that ‘Exercisable Voting Rights’ refer to ‘Voting Rights’ that are not subject to any limitations.   Technical Compliance Services  are available to help members understand the difference between ‘Voting Right’ & ‘Exercisable Voting Right’ under B-BBEE legislation.

The most significant risk to an organisation meeting its Preferential Procurement targets is fraudulent B-BBEE Credentials. They not only go against the spirit of B-BBEE, but they put an organisation at risk, as fraudulent B-BBEE Credentials generally only reveal themselves at the time of an organisation’s B-BBEE Verification.   The B-BBEE Commission's website contains a list  of known fraudulent / invalid B-BBEE Credentials currently in circulation.   If any Members have suspicions about B-BBEE Credentials currently on file, Certificate Collection Services  is on hand to assist with validation of their authenticity.

As per Schedule 1 of the Amended General B-BBEE Codes of Good Practice , a “Start-up Enterprise” means a recently formed or incorporated Entity that has been in operation for less than 1 year.  A start-up enterprise does not include any newly constituted enterprise which merely a continuation of a pre-existing enterprise.   Further rules applicable to Start- Up Enterprises include:   Start-up Enterprises are deemed to have qualifying B-BBEE Status in accordance with the principles of paragraph 4 of Statement 000 of the Amended General B-BBEE Codes of Good Practice. a Start-up Enterprise may be measured in terms of the QSE scorecard, or the Generic scorecard should they choose to. a Start-up Enterprise must submit a QSE scorecard when tendering for any contract, or seeking any other economic activity covered by Section 10 of the Act, with a value higher than R10 million but less than R50 million. For contracts of R50 million or more they should submit the Generic scorecard. The preparation of such scorecards must use annualised data.   Technical Services  are on hand to assist with the understanding the requirements of Start-Up Enterprises.

A QSE that is more than 51% Black Owned qualifies for Enhanced Recognition, which means that an Affidavit is the only B-BBEE Credential they have to present. Paragraph 5 of Statement 000 published in Gazette #42496  makes the following allowance for Enhanced Recognition:   ELIGIBILITY AS A QUALIFYING SMALL ENTERPRISE (QSE)   5.1  A Measured Entity with an annual Total Revenue of between R10 million and R50 million qualifies as a Qualifying Small Enterprise.   5.2  A QSE must comply with all of the elements of B-BBEE for the purposes of measurement.   5.3  Enhanced B-BBEE recognition level for QSE: 5.3.1      Despite paragraph 5.2 above, a Qualifying Small Enterprise which is 100% Black Owned, measured using the flow-through principle, qualifies for elevation to a “B-BBEE Level One Contributor” having a B-BBEE recognition level of 135%. 5.3.2      Despite paragraph 5.2 above, a Qualifying Small Enterprise which is at least 51% Black Owned, measured using the flow-through principle, qualifies for elevation to a “B-BBEE Level Two Contributor” having a B-BBEE recognition level of 125%. 5.3.3      A Black Owned QSE in terms of paragraph 5.3. above, is only required to obtain a sworn affidavit on an annual basis, confirming the following: 5.3.3.1 Annual Total Revenue of between R10 million and R50 million; and 5.3.3.2 Level of Black ownership.   5.4  Despite paragraph 5.3 a black-owned QSE may be measured in terms of the QSE scorecard should it so choose.   5.5  Any misrepresentation in terms of Para 5.3 above constitutes a criminal offence as set out in the B-BBEE Act as amended.   QSE Services  are available to members with any queries relating to the above.

Here are three tips for avoiding the common conflict that many organisations face regarding what version of a B-BBEE Code of Good Practice is applicable to them:   Organisations must comply with the requirements of the B-BBEE Code of Good Practice they qualify to be measured against. For example, an organisation that does not earn 50% of its annual revenue from a sector that has a B-BBEE Sector Code issued in terms of Section 9 (1) of the B-BBEE Act must revert to be measured on the Amended General B-BBEE Codes of Good Practice. In 2019 there were amendments to the Amended General B-BBEE Codes of Good Practice, namely in Statement 000, Statement 300, Statement 400 and Schedule 1 – Interpretations & Definitions. These amendments only apply to those measured on the Amended General B-BBEE Codes of Good Practice. As to date none of the Sector Codes have been amended to incorporate these amendments, they do not apply to those measured on a B-BBEE Sector Code. The Transport Sector Code has not been amended since it was introduced in 2009. Subsequently, an organisation falling into this ambit is still measured against the requirements of the initial B-BBEE Codes of Good Practice implemented in 2007.   Consequently, an organisation measured on the Transport Sector Code has not yet faced the consequences of not meeting sub-minimum requirements of the Priority Elements or the Discounting Principle. However, the Y.E.S initiative is applicable to the Transport Sector based on a Clarification Statement issued in February 2020.   Lastly, if a Sector Code, either amended or not, is silent on an issue, an organisation must revert to the requirements held within the Amended General B-BBEE Codes of Good Practice.   It is, however, vital to know the difference between Silence vs Conflict in the context of B-BBEE Legislation to avoid any issues.    Technical Compliance Services  are available to help members understand the difference between Silence VS Conflict under B-BBEE legislation.

The core aim of Socio-Economic Project Contributions is to support income generation. Therefore, any contributions must pass the income generation test at the time of an organisation’s B-BBEE Verification.   Schedule 1  of the Amended General Codes of Good Practice defines Socio-Economic Project Contributions, which must be pre-approved by organs of state or a sector as:   “Socio-Economic Project Contributions means monetary or non-monetary contributions carried out for the benefit of any projects approved for this purpose by any organ of state or sectors including without limitation:   o   Projects focusing on environmental conservation, awareness, education and waste management; and o   Projects targeting infrastructural development or reconstruction in underdeveloped areas; rural communities or geographic areas identified in the government’s integrated sustainable rural development or urban renewal programmes; o   New projects promoting beneficiation.”   Socio-Economic Development Services   are available to Members to assist meeting requirements under the element of Socio-Economic Development.