B-BBEE Certificates should only be issued to compliant entities

We recommend that the dti minister, SANAS and IRBA jointly ensures that BEE certificates only be issued by verification agencies or approved auditors if the measured entities have reached a compliant BEE level. Where the entity is not-compliant, agencies/auditors should not be allowed to issue certificates.

Far too many companies ask to be verified and end up with a non-compliant score – less than 30 points. Some even get 0 (zero) points, which is more an indication of lack of interest than a genuinely poor score. Quite frankly, it is impossible to earn 0 points. At least one or two of their suppliers must be compliant – banks, cell phone companies. We have even seen a tender going out for the issuing of a “non-compliant certificate”. We have hundreds of non-compliant certificates on our database.

Very often the company is only interested in obtaining a BEE certificate, to give to their customer, in the hope that the certificate will be accepted, without the customer complaining about the low level. The customer’s contact person who receives the certificate is often untrained on BEE principles and does not always understand how levels work, or what non-compliant means. They often simply accept a certificate if it was produced by an accredited agency or auditor. They really should go back to their supplier and explain that a non-compliant certificate does not help them at all.
Our suggestion is that a verification agency must not be allowed to issue a certificate to an entity unless it has reached a compliant level – level 8 at minimum.
A BEE certificate should be seen as a certificate of achievement, and not a certificate of attendance. If you pass your matric, you get a matric certificate. If you fail, the school does not issue you with a certificate of failure. Anything less than Level 8 should not be rewarded with a valid B-BBEE certificate.

We recommend to the minister and to the regulators, SANAS and IRBA, that they instruct the verification agencies and approved auditors NOT to issue a BEE Certificate of Compliance, if the company is not in compliance. The agency can issue a letter and report, not bearing the SANAS or IRBA logos stating the points achieved with a clear disclaimer that this cannot be used as a certificate.

To be fair, there are some agencies that already refuse to issue a certificate to a non-compliant company. However, often all that the non-compliant company does is appoint a different agency or approved auditor. If all agencies were to follow the same policy, we would expect to see an improvement in levels of compliance. If a company that needs a valid BEE certificate were to not get one because they were not compliant, we believe that the company would take instant remedial steps to become compliant.

We believe that this will go a long way to ensuring improved compliance, and better implementation.
This is not a change to the codes, but only the method of verification, so does not require a gazette or commentary period in terms of 9(5) of the act. If SANAS and IRBA were to issue guidelines and in the future, notices of non-conformance, we believe that this would be sufficient – Source: EconoBEE Newsletter dated Tuesday 20 August 2013.

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