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You could lose your BEE status in an instant

BEE

The Broad-Based Black Economic Empowerment (BBBEE) Amendment Act was gazetted at the end of last month. However now you’ll have to work doubly hard to maintain your BEE status with these new regulations.


Speaking at a recent breakfast seminar held at CRS Technologies, Richard Pruett of Format Systems emphasised that a level 1 company must comply with the new BEE codes in terms of:

1.    Ownership,
2.    Skills development, and
3.    Enterprise and supplier development.

If they don’t, they will lose their level 1 BEE status.

How does the points system work for the above three?

Ownership

  • If 25% plus one vote of the exercisable voting rights of your company are controlled by black people, you get four points.
  • Having 10% of exercisable voting rights in your company controlled by black women will get you two points.
  • With twenty-five percent of your company being owned by black people you will get four points and 10% ownership will get you two points.
  • If new entrants into the market own 2% of your business you’ll get two points.
  • If 3% of your company is owned by one of the following groups, you’ll get three points:

    -    Black designated people,
    -    Black participants in employee share ownership programmes,
    -    Black people in broad-based ownership schemes, and
    -    Black participants in cooperatives.

  • If black people have a net economic interest in your business you’ll get eight points.

Skills development

  • If you spend 6% of your total wage bill on learning programmes for black people, as specified in the learning programme matrix, you’ll get eight points.
  • If you spend 3% of your total wage bill on learning programmes for black people with disabilities, as specified in the learning programme matrix, you’ll get four points.
  • If you spend 2.5% of your total wage bill on learnerships, apprenticeships or internships for black people you’ll get four points.
  • If you spend 2.5% of your total wage bill on training for unemployed black people, which is specified in the learning matrix, you’ll get four points.
  • If you absorb all of the black people who you have on learnership programmes you’ll get five points.

Enterprise and supplier development

  • Spending 2% of your net profit after tax (NPAT) on supplier development contributions per year will get you a whopping 10 points.
  • If you spend 1% of your NPAT on contributing to enterprise development contributions and sector specific programmes you’ll get five points.

“Lots of companies are desperate to be at a certain ‘BEE points level’ as they want to become suppliers to big business and government. For example, companies like Cell C, Vodacom and MTN generally require their larger suppliers to be at level 3.

“More and more, these entities won’t even consider a tender unless you can show that you are at a BEE level they want. So it’s becoming more and more of an issue,” concludes Pruett.


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