Overview to the new BEE Codes

The minister announced draft codes in October 2012. The intention is to replace or refine the existing codes of good practice. Those draft codes caused lots of consternation: Some of the recommendations were unsustainable or infeasible:

Importers who struggled to become compliant.
Businesses without ownership stood to drop two levels.
Issues around QSEs, sector codes were not addressed.
Value Adding status incorrectly defined.

The minister invited submissions and we and over 500 organisations, including many clients whom we advised, gave proper and competent submissions. The objective has always been to create a sustainable set of codes that help, and not hinder transformation.

The dti has taken note of the comments, and held a report-back session in March.

Moving forward:

The next stage of the revised codes (now dubbed the refined codes) is going to be held in the form of a B-BBEE summit in early October 2013. We are anticipating the minister issuing these codes during that session or very shortly thereafter as a formal gazette. Last year a similar event was held where the revised codes were announced but were issued a few days later. The DTI simply offered a presentation giving insight into the soon to be gazetted codes.

In terms of the act, the minister must gazette any proposed change in line with section 9 (5) of the B-BBEE act. Thereafter, and taking into account public submissions, he has the right to gazette the changes in terms of section 9 (1) of the act.

Once this is done, it will explain when the changes will come into effect. The dti has not announced if the minister will follow the 9 (1) route, or issue the proposals as 9 (5) and request further submssions.

Some of the issues we expect to be cleared up include:

Verification issues around the new codes
Interpretive issues – in line with the about to be signed B-BBEE Amendment Act.
Sector codes
Application date for the new codes

Either way, whatever is gazetted will have far reaching repercussions. You simply have to be first to know about the changes. We will be hosting a series of seminars to help companies understand what the new legislation entails, strategies to implement it without dropping a level and begin creating interpretations for companies to follow – EconoBEE Newsletter dated Thursday 26 September 2013.

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