Home Media Press Releases Revised Codes do much to embody true spirit of B-BBEE

Revised Codes do much to embody true spirit of B-BBEE

Commenting on the effectiveness of the Department of Trade and Industry’s (dti’s) revised broad-based black economic-empowerment (B-BBEE) Codes, Agnes Dire, Director at SizweNtsalubaGobodo, says on the whole the revised Codes embody the true spirit of B-BBEE in terms of enhancing the economic participation of black people in the South African economy.

"Following the introduction of the initial Codes there was a lot of disillusionment around whether they were really achieving what they initially set out to achieve, particularly in terms of establishing sustainable black-owned SMEs as well as clearly differentiating between black-owned and white-owned organisations. In this regard, the revised Codes will do much to assist small businesses in actively creating and growing wealth and increasing economic inclusion,” she comments.

Because of the automatic level allocation, Dire says smaller black-owned businesses stand to benefit from a significantly higher B-BBEE level.

"In the past many organisations benefitted from the wide range of points attributed to each B-BBEE level. This is now much more refined where each B-BBEE level will now provide a much more accurate reflection of transformation as opposed to an organisation having the political and monetary means to achieve a certain level.

"Qualifying Small Enterprises (QSEs) and Exempted Micro Enterprises (EMEs) with 100% black ownership will be automatically compliant as Level 1 contributors, while QSEs and EMEs with 51-99% black ownership will be automatically compliant as Level 2 contributors which present many additional opportunities for them with regards to the new Enterprise and Supplier Development (ESD) element of the revised codes.

"For instance under the Preferential Procurement sub-element, black-owned QSEs and EMEs will now be more actively sought out and supported as suppliers as their customers stand to benefit from scoring well when procuring from them as well as the number of places on the scorecard within which they qualify,” she explains.

However for B-BBEE to be successful and achieve its objectives, going forward Dire believes a combination of aligning government policy and organisations actively embracing B-BBEE as a strategic imperative will be required.

"While there is an incentive to transform as a result of the priority elements in the revised Codes, it is essential that other legislation such as the Preferential Procurement Policy Framework Act be aligned. Here pricing remains a factor and while organisations may comply B-BBEE does not always necessarily play a significant role.

"That being said, without organisations in general actually regarding and implementing B-BBEE as a strategic imperative and making it the lifeblood of the organisation, the greater good stemming from the true spirit of the codes will never truly be realised,” she concludes.