The basics of the Amended Codes of Good Practice

On the 11th October 2013 the DTI issued the Amended BEE Codes. This was a long time in coming and is seen as a new step for BEE in the country. The original BEE codes of Good Practice were first Gazetted on the 9th February 2007 and has been followed by companies in order to get their B-BBEE certificates.

The government realised that the BEE Codes needed to be updated to address certain issues and loop holes that companies were exploiting.

These are some of the important changes:

The codes have changed from seven elements to five.

Management Control
Skills Development
Enterprise and Supplier Development
Socio-Economic Development

There are also new Priority elements – these are Ownership, Skills Development and Enterprise and Supplier Development. One of the most important aspects is the dropping of one level if your company does not achieve certain minimums in the priority elements. For a Qualifying Small Enterprise (QSE) their main priority element is Ownership and one other priority element otherwise they will drop a level.

Another important feature is that the turnover threshold to qualify as an Exempt Micro Enterprise has changed from R5 million to R10 million and for a Qualifying Small Enterprise has changed from R35 million to R50 million.

If your company is an EME you are automatically a Level 4 contributor but, if your company has more than 51% Black ownership then you are a level 2 contributor or if you are 100% black owned then you will be a level 1 contributor.

The recognition table has changed. It is possible to earn the same points or even slightly more, but it does mean that most companies may drop down a level or two.

The DTI is attempting to use BEE to make more of an impact on the economy and to solve issues like unemployment. The skills development element has changed in that previously you were only allowed to train your employees. You are now able to train outside people (unemployed) as well so that they can get a qualification, the right skills and experience.

An interesting indicator with regards to skills development – if you assist unemployed learners with training to obtain jobs in the industry on completion of their learnership then you will be allowed to claim additional bonus points for Skills Development.

BEE is a process and will be a part of doing business in South Africa for many years to come. South Africa is still dealing with huge issues of unemployment and a struggling economy. BEE aims to address some of the issues in order to make South Africa a better and more prosperous place to live in.

Implementing BEE shows that your company is committed to being a part of the positive change in South Africa – EconoBEE Newsletter dated Wednesday 13 November 2013.

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