“The new codes will only make compliance more complicated for us”


If the Department of Trade and Industry (dti) thinks revising the B-BBEE codes will ensure compliance, it is grossly mistaken, an executive of a JSE listed company told Transform SA in an impromptu interview at an upmarket cafe in Sandton over a cup of coffee. He asked to remain anonymous.

The major change in the B-BBEE codes of good practice is the reduction into five of seven elements on how companies are measured on their B-BBEE compliance. The elements cover ownership, management control, skills development, enterprise and supplier development and social and social economic development.

Organisations have until April 30 2015 to ensure that they meet the increased requirements. According to the codes, companies must achieve, at the very least, 40% of the priority elements, which are ownership, skills development, and enterprise and supplier development. Failure will result in the relegation of compliance by one level.

“Don’t be deceived by the fewer elements, they have made compliance all the more difficult,” bemoaned the executive. “Practically, we are being set to fail.”

He said he was not making a storm out of a tea cup as fellow executives also shared his fears. “Apprehension is the general mood. That’s what I can say.”

His bone of contention is complying with employment equity which has been merged under the new revised codes as management control as “pertinent black skills are not just there”.

“Convince me how I am going to manage firing 50 qualified, experienced white engineers and replace them with 50 black (in this context African) engineers. We would be lucky to get even four black qualified engineers that meet our requirements. Remember we are running a blue chip company whose shareholders would like to see a return in investments at all costs,” he doubts.

In its 2013 BEE survey, which compared the level of compliance by organisations between 2012 and 2013, KPMG noted a drastic reduction. It would be interesting to see if there new codes will encourage compliance.

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