Paragraph 3.1 of Statement 300 of the Amended General B-BBEE Codes of Good Practice  applies Priority Skills as:   Core, Critical and Scarce Skills, as well as any skills specifically identified in:   o   A Sector Skills Plan issued by the Department of Labour of the Republic of South Africa; o   The National Skills Development Strategy III; o   The New Growth Path; and o   The National Development plan.   There is no comprehensive list that collectively incorporates all Priority Skills across all sectors as they differ per each SETA. Consequently, organisations must research what Priority Skills apply to the sector applicable to them.   Skills Development Services  are available to assist Members with understanding Priority Skills within their Sector.

The Preferential Procurement element measures the way a Measured Entity procures goods and services from Suppliers. One of the key point Indicators under the General Amended B-BBEE Codes of Good Practice is the spend on Suppliers that are at least 51% Black Owned based on the applicable B-BBEE Procurement Recognition Level. As per Schedule 1 of the General Amended B-BBEE Codes of Good Practice , 51% Black Owned is defined as:   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;   Enterprise & Supplier Development Services  are available to assist Members with analysing their Supply Chain from a B-BBEE perspective.

When a Measured Entity implements B-BBEE Initiatives, they need to ensure that the initiatives do not constitute a Fronting Practice. As per the B-BBEE Act, the definition of a “Fronting Practice means a transaction, arrangement or other act or conduct that directly or indirectly undermines or frustrates the achievement of the objectives of this Act or the implementation of any of the provisions of this Act, including but not limited to practices in connection with a B-BBEE initiative-   (a)in terms of which black persons who are appointed to an enterprise are discouraged or inhibited from substantially participating in the core activities of that enterprise; (b) in terms of which the economic benefits received as a result of the broad-based black economic empowerment status of an enterprise do not flow to black people in the ratio specified in the relevant legal documentation; (c) involving the conclusion of a legal relationship with a black person for the purpose of that enterprise achieving a certain level of broad-based black economic empowerment compliance without granting that black person the economic benefits that would reasonably be expected to be associated with the status or position held by that black person; or (d) involving the conclusion of an agreement with another enterprise in order to achieve or enhance broad-based black economic empowerment status in circumstances in which- (i) there are significant limitations, whether implicit or explicit, on the identity of suppliers, service providers, clients or customers; (ii) the maintenance of business operations is reasonably considered to be improbable, having regard to the resources available; (iii) the terms and conditions were not negotiated at arm’s length and on a fair and reasonable basis;”   Technical Services  are available to assist members in understanding the definition of a Fronting Practice.

The Socio-Economic Development element requires an Independent Competent Person to present an Independent Competent Person’s Report to confirm that the requirements of an organisation’s Socio-Economic Development contributions have been met and that a claim is indeed legitimate.   As per Schedule 1 of the Amended General B-BBEE Codes of Good Practice, a “Competent Person” means a person who has acquired through training, qualification and experience the knowledge and skills necessary for undertaking any task assigned to them under the codes.”   An Independent Competent Person must have no conflict of interest when nominated to sign off on an organisation’s Socio-Economic Development initiative. Such a person must have sufficient training and experience or knowledge, as well as other qualities that allow them to assist an organisation in the capacity of an Independent Competent Person. The competence level depends on the initiative's complexity and the requirements of a particular assessment. An Independent Competent Person must have a duty of care to an organisation’s investors.   Socio-Economic Development Services  are available to assist organisations that wish to confirm the competence of an Independent Competent Person.

In terms of the B-BBEE Act, on 18th May 2021, a Practice Note under Gazette #44591 was published by the Minister of Trade Industry & Competition. The notice outlines the rules for discretionary Collective Enterprises. The purpose is to clarify how Ownership by Collective Enterprises is defined as Broad-Based Schemes, Employee Share Ownership Programmes, Trade Unions, Not for Profit Companies, Co-operatives, Trusts should be interpreted under the B-BBEE Codes of Good Practice.   Ownership Services  are available to assist members with Ownership structures.

Selecting the correct Skills Development service provider, in most cases, is the difference between the success or failure of a Skills Development Strategy. Therefore, due diligence before contracting a Skills Development service provider is essential and would include establishing the following:   o   How long have they been in business? o   Did they previously trade under another company name? o   What are the geographical areas in which they operate? o   Do they have references that support a solid track record? o   What is the average drop-out rate of Learners? o   Do they rely on third-party intervention? o   Are the Learners’ salaries or wages in line with the national minimum wage requirements? o   Can they furnish evidence that they are an accredited Skills Development service provider? o   Do they adhere to the standards of the body of their accreditation? o   Can they provide a financial viability report from their auditors? o   Do they agree to a site visit to confirm that the facilities will adequately accommodate Learners from both an infrastructural and geographical perspective? o   Can they confirm that they have the in-house capacity to meet the contract requirements? o   Do they have a good relationship with the primary SETA aligned with the sector an organisation represents?   Skills Development Services  are available to assist members in selecting a Skills Development service provider.

Informal training is the means that many organisations use to drive their Skills Development mandate. Category G is Informal Training whereby the Skills Matrix references work-based informal programmes. It refers to the workplace or internal training, whereby one employee trains another.   The following evidence substantiates a claim for this category (Not limited to):   o   Certified copy of a South African identity document; o   A signed EEA1 or any documentation confirming race and gender presented by the trainee; o   A training register confirming the date, the number of hours, as well as the trainer’s and trainee’s names. All parties must sign off this evidence; o   The payslip/s of the trainer will verify the hourly rate paid in the month training took place. Evidence may include the trainer’s IRP5 if the Measurement Period is a February year-end.   Skills Development Services   are available to assist Members with B-BBEE Verification requirements under the element of Skills Development.

Changes to B-BBEE Legislation in 2013 closed a loophole that allowed early payment terms for Black Owned businesses in exchange for Preferential Procurement points. The amendments meant that an organisation may only claim early payment terms from Supplier Development Beneficiaries. Therefore, the following applies to an invoice on which a claim for early payment is going to be made:   The invoice payable for goods or services must appear in an organisation’s TMPS; Only the amount for early payment terms must reflect.   Enterprise & Supplier Development Services   are available to assist with claiming early payments.

Daily, during the procurement process, organisations are purchasing across sectors, whether they are paying for hotel accommodation, professional fees or other goods and services that support the delivery of their business offering. Similarly, an organisation measured on a specific B-BBEE Sector Code of Good Practice may make purchases from suppliers measured on other B-BBEE Sector Codes of Good Practice.   In choosing a supplier that is measured outside the B-BBEE Sector Code of Good Practice on which an organisation is measured, one must be aware of each B-BBEE Sector Code of Good Practice’s targets and expectations. An example is that qualification criteria for EMEs & QSEs differ under Sectors such as Construction and Media, Advertising & Communication.   Without being aware of each criterion of each B-BBEE Code of Good Practice, this could, at the time of a B-BBEE Verification, impact an organisation’s Preferential Procurement Scorecard.   Certificate Collection Services are available to assist Members with validating B-BBEE Statuses.

Based on Statement 300 of the General Amended B-BBEE Codes of Good Practice , an organisation can only claim Skills Development Expenditure for Learnerships if an organisation incurred such an expense within their financial year.   Evidence for a Learnership for a B-BBEE Verification under the Skills Development element include, however, are not limited to:   A signed Learnership Agreement; Proof of the expenditure incurred by providing invoices and proof of payment; A certified copy of a Beneficiary’s ID; A completed EEA1; Proof of Payslips; Doctor’s confirmation of Disability (if applicable); and An interview between the Learner and the B-BBEE Rating Agency conducting the B-BBEE Verification.   Skills Development Services   are available to assist Members with B-BBEE Verification requirements under the element of Skills Development.

Generally, expenses on Bursaries for employees do not constitute Skills Development Expenditure if an organisation can recover any of the employee's expenses or if the grant is conditional in any way. However, the following two conditions are acceptable as part of an employee obligation whereby expenses will be recognised.   Successful completion of studies within an identified period; or The continuation of employment for a stated period following the successful completion of their studies which does not extend the period of their studies.   Members need to consider the above when implementing Bursary strategies and agreements.     Skills Development Services   are available to assist Members to develop & implement Skills Development initiatives.

The liquidity of an Enterprise Development Beneficiary matters. A long-term Enterprise Development Strategy more often than not incorporates future Bonus Points for elevating a Beneficiary from Enterprise Development status to that of Supplier Development. However, core to successfully claiming these points is that the Enterprise Development Beneficiary remains in business. In other words, claims only qualify if an Enterprise Development Beneficiary’s business is liquid and actively trading.   Therefore, organisations must put measures in place to track the performance of their Beneficiaries.   Enterprise & Supplier Development Services are available to assist Members with Enterprise & Supplier Development strategies.