B-BBEE: revised codes of good practice

The first BEE codes of good practice where introduced in 2007 and the amended codes came into effect on the 1st of May 2015. These codes were designed to fill the gap of inequality in South Africa as the rate of poverty and unemployment increases every year. The new legislation is much more demanding than the previous codes of good practice especially in calculating the BEE scores and proof of BEE activities. As a company having a BEE certificate will have a positive impact on relationships with customers and will also create a good business to business relationship and increases repeated business. Without a document proving BEE activities as a company you cannot claim BEE points and companies are advised to keep record of all the BEE documents or files with activities that involve the company. To avoid disappointments, companies should consult the verification agency to verify their BEE activities and BEE score points.

Some BEE scorecard changes:

Sectors Old New
Ownership 20 25
Management control 10 15 (19?)
Skills Development 15 25
Enterprise and supplier development 15 40 + 4
Socio economic development 5 5

The Socio-Economic Development points have neither increase nor decreased making it much more difficult for businesses to engage in that programme as it has the least points on the BEE score board. More companies would like to take on the skills development programme but don’t know how to invest in the programme. Investing in the Sparrow  FET college skills development programme you would either be funding a student to study, giving them workplace experience in a form of an internship or learnership and you will benefit 25 points on your BEE score card while also reducing the unemployment rate in the country. Various courses are offered at the FET College including early childhood development, professional cookery, end user computing and furniture making out of wood. You can only qualify for the 25 skills development points when you spend 6% of your company’s annual payroll on skills development. Sparrow Schools can help you earn BEE points, to find out how contact us on 0114821015 or send us an email at sparrow@mweb.co.za

Sourced from BEESA & BEE.co.za

To maximize your scorecard call one of our sales consultants, 011 482 1015.

Understanding the implications of fronting

Companies are very desperate to get tenders that they even take an illegal route just to receive BEE accreditation. When a company deliberately provides the wrong information related to BEE compliance this is called fronting and it has serious implication on the company and the business owners or directors. BEE accreditation for a company leads to more business deals and the company can also apply or receive government tenders or other sector’s projects in which they will obtain more profit to sustain their business and apply for countless tenders. Fronting has many consequences on the business and its image.

There are three types of fronting practices, opportunistic intermediaries, benefit diversion and window dressing where a company lists their black employees as shareholders to be more BEE compliant as they will earn more points on the BEE scorecard. According to the amended code of good practice fronting is a criminal offence. Companies or anyone found guilty of this act will be fined and the penalty fee will be 10% of the annual turnover and imprisonment up to 10 years for the company owners. They will also be excluded from any government deals or tenders for 10 years. For those companies that reply on government tenders to operate they will have to liquidate or close the company. To report any incidents of fronting contact the Department of Trade & Industry http://www.dti.gov.za/contacts.jsp

There is always a solution to B-BBEE! Call Sparrow FET College today – 011 673 4410/4419 to make your BEE pain go away.

Sourced from www.cenfed.co.za