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Changes to BBBEE Codes

Monday, 14 October 2013   (0 Comments)
Posted by: Natalie Singer
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Source: Global Business Solutions


The long awaited amendments to the Broad-Based Black Economic Empowerment ("B-BBEE”) Codes of Good Practice ("Codes” or "COGP”) were gazetted on 11 October 2013. The major changes are summarised below:

  • Reduction of elements from 7 to 5 through the merging of:
    o Management Control and Employment Equity under Management Control; and
    o Preferential Procurement and Enterprise Development under Enterprise and Supplier Development
  • Creation of 3 priority elements, Ownership, Skills Development and Enterprise and Supplier Development;
  • The discounting of the Entity's B-BBEE status by one level if the gazetted sub-minima for these priority elements are not met;
  • The removal of Value Adding Supplier and its replacement with Empowering Supplier;
  • EME and QSE that are 100% black owned will qualify as level 1, and EME and QSE that are more than 51% black owned will qualify as level 2;
  • EME and QSE will only need to produce an annual sworn affidavit confirming revenue and black ownership if they are more than 51% black owned;
  • A QSE with less than 51% black ownership is required to comply with all 5 elements of the scorecard, and is subject to discounting if sub-minima are not met;
  • No separate QSE scorecard is supplied in the amended codes, so QSE with less than 51% black ownership will be scored on the same scorecard as companies with turnover in excess of R50 million;
  • Adjusted Recognition for Gender has been removed. Instead black women are separately scored;
    • One year transition period from 11 October 2013. In the first year after the Gazette, Measured Entities can elect to use
      o The amended Codes; or
      o The original codes issued on 09 February 2007.
  • Thresholds (in Rands) have been adjusted as shown below:
    Exempted Micro Enterprises (EME) From 0 - 5million to 0 - 10 million
    Qualifying Small Enterprises (QSE)   From 5 - 35 million to 10 - 50 million
    Generic From 35 million + to 50 million +

    If you wish to read the detailed brief, please click here

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