Amendments to the B-BBEE Codes will affect your compliance initiatives (Gazetted by the DTI on 31 May 2019 and to come into effect later this year).
With our new Government officially coming into play, these legislative changes look to address outstanding issues and reduce Gazetting costs. The Amendments have been made under Revised Code 000 General Principles, Interpretation and Definitions Revised Schedule 1, Skills Development Revised Code 300 and Enterprise & Supplier Development Revised Code 400.
Key Skills Development Code Amendments to note:
- The indicators for Employed & Unemployed learnerships are now combined;
- Weighting points for Skills Development expenses reduced from 8 to 6 points;
- Category F & G are no longer capped at 15% but at 25% (excluding travel and accommodation - 15%);
- Training Manager’s salary cannot exceed 15% of your Skills Development Expenditure;
- Spend on bursaries for black students attending higher Education Institutions has been introduced (target of 2.5% leviable amount and 4 weighting point);
- No double counting allowed between Skills Development Expenditure on Learning Programmes specified in the Learning Program Matrix for black people, and Skills Development Expenditure on Bursaries for Black Students at Higher Education Institutions.
- Stipends linked to bursary programs now a legitimate learning cost. This was previously limited to Cat B, C & D programs.
- Definition for a bursary or scholarship scheme now specifically includes costs for funding for subsistence or accommodation during the period of study.
- Procurement Spend with 51% Black Owned Businesses: points have increased from 9 to 11 and the target from 40 – 50%. • Procurement Spend with 51% Black Owned Businesses: points have increased from 9 to 11 and the target from 40 – 50%.
- The multiplier of 1.2 (for first time suppliers) is removed and replaced by a 1.2 recognition boost for purchasing from 51% Black Owned or Black Woman Owned suppliers. These qualifications are achieved using the flow-through principle.
- Beneficiaries of ED & SD contributions must be 51% Black Owned or Black Woman Owned (EME or QSE) suppliers whose qualification is achieved utilising the flow-through principle.
- The Benefit Factor Matrix is amended in that 50% of Guarantees provided on behalf of a Beneficiary can be claimed instead of 3% as before.
- The increase in the points and target in respect of procurement from 51% Black Owned Suppliers strengthens the significance of black ownership and weakens the significance of a supplier’s BEE Level.
BROAD-BASED BLACK ECONOMIC EMPOWERMENT ACT SECTION 9 (1) CODES OF GOOD PRACTICE AS AMENDED SCHEDULE 1
INTERPRETATION AND DEFINITIONS
- The Net value date has been excluded in the new amendments, however, the definition for the current equity date has been included as follows: “the later occurring of the date of commencement of statement 100 and the date upon which the transaction undertaken by the Measured Entity in order to achieve black rights of ownership, became effective and unconditional;“
- Definition for long term contract: A legal agreement between an individual and an entity that this individual would work for until his or her mandatory date of retirement.
- Definition for Absorption amended: No more “proceeding with further education and training”, only a long-term contract of employment included. (now defined).
- Company Limited by guarantee (new definition): means a company limited by guarantee, as referred in the Companies Act, No. 71 of 2008;
- Critical Skills new definition: “those skills identified as being critical relevant to the SETA. Qualifying Enterprise and Supplier Development Contributions (new definition): means a collective term describing Enterprise Development and Supplier Development Contributions targeting EME’s and QSE’s which are at least 51% black-owned or at least 51% black women-owned, black youth in rural, and underdeveloped areas in statement 400.