South Africa: BBBEE Codes Gazetted

By: Vivian Warby

The Codes of Good Practice on Broad-Based Black Economic Empowerment were gazetted last Friday along with the sector charters for the Construction and Finance industries.

Addressing a media briefing of government's Economic, Investment and Employment cluster on Monday, Trade and Industry Minister Mandisi Mpahlwa, said with the gazetting of the codes, the process of appointing the BEE Advisory Council, to monitor and advise, was also underway.
Their publication in the Government Gazette follows cabinet's approval of the codes in December last year.

Now, qualifying businesses, all government institutions and State Owned Enterprises would have to comply with the codes and be rated in terms of the Generic Scorecard or sector specific charters.

In December last year, Minister Mpahlwa said the codes would benefit the majority of South Africans and these benefits would be realised through measures that included encouraging new entrants into business and penalising "fronting."
Companies would be encouraged to ensure more ordinary South Africans, and not just "the usual suspects", benefited from empowerment initiatives, he said.
The codes allocate 70 percent of their points to broad-based elements such as enterprise development, skills development, preferential procurement and socio-economic development, and would therefore contribute to more inclusive economic growth.

In terms of the codes, smaller companies and start-ups in their first year of operations will be exempt from empowerment requirements, while multi-nationals will have flexibility in how they choose to structure their empowerment deals.
The Generic Scorecard awards points amounting to a total of 100 on the seven elements of ownership (20 points), management control (10), employment equity (15), skills development (15), preferential procurement (20), enterprise development (15) and socio-economic development (5).
The element of ownership, for example, requires that 25 percent plus 1, of a company's owners with voting rights be black people.

Source: allafrica.com 12 February 2007