Pages Navigation Menu

Broad-Based BEE Verification Agency

BEE Rated Newsletter – April 2011

This is the second of our ongoing Newsletters to keep Clients updated on the Broad-based BEE legislation, and on the developments taking place within the BEE verification environment.

SOME RESPONSES TO OUR 1ST NEWSLETTER!

“Thank you for your very informative BEE update.”  Colin Mckay (MD, School Trade)

“This is very good. Thank you.”  Jeff Blackbeard (Business Consultant)

“Great, thanks.”   Danie Tolken, Financial Manager (Strang Rennies Metal Terminals)

“Very informative”  Winston Owen (Owen Adendorff & Associates)

NOTABLE NEWS (extracts from news reports)

New emphasis and direction in the BEE Codes?

At a meeting of the BEE Advisory Council on 01 April 2011, emphasis was placed on the new growth path and the role of B-BBEE in creating jobs. The presidency said the meeting emphasised that B-BBEE was “not just about big business deals for a few individuals in society”.

“The new growth path requires a much stronger focus on the broad-based elements of the BEE regulations, such as ownership by communities and workers, increased skills development and career-pathing for all working people, and support for small enterprises and cooperatives, as well as a new emphasis on procurement from local producers in order to support employment creation”.

“To contribute to job creation, B-BBEE has to, amongst others, promote new enterprise development, encourage local procurement and enhance skills development and employment equity.” (See also below – new Preferential Procurement Regulations)

Getting tougher on BEE Compliance?

“There is recognition within the government that in its current form, the B-BBEE Act does not deal with compliance in a decisive manner and as such must be changed … the Act was drafted encouraging incentive-driven modes of compliance more than it makes compliance a condition of doing business in South Africa” (Thabo Masambuka, former senior empowerment manager, DTI – suggesting a tougher approach)

Legislative changes impacting on B-BBEE

  • Companies Act: Proposed changes to the Act will enhance protection for minority shareholders, particularly those BEE shareholders that are often ignored by majority shareholders and directors of companies, and allow them to exercise their rights fully.  Other features include  early turnaround of companies in distress, which would save jobs, and less processes to registering companies, which would encourage increased participation in the economy.
  • Preferential Procurement Regulations: Cabinet approved (02/03/11) the revised regulations for procurement by Government and State owned enterprises. The effect is to see future Government procurement policies and practices align with the B-BBEE Codes of Good Practice, so eliminating inconsistencies depending on the Department concerned, as well as recognition of the broad-based requirements in all 7 elements of the BEE scorecard, and not a narrow focus on just Black ownership. Public entities follow the regulations of PPPFA to procure goods and services. Alignment of these two Acts will ensure that government departments and municipalities include BEE when awarding points for procurement of goods and services.

With the alignment of the two Acts it will become compulsory for all trading entities to be verified and be in possession of valid BEE certificate. This will increase the level of compliance to the BEE codes by the private sector and ensure that when the second phase of higher BEE targets begins in 2012, government can report and evaluate compliance to the first five years of the implementation of BEE.Before this decision, public entities only considered BEE when issuing licenses and entering into partnerships, but not when procuring goods and services from the private sector.

Government has been criticised for not taking the lead and leaving the private sector and state-owned entities to promote BEE. The alignment of these two Acts will do away with the old narrow-based 90/10 and 80/20 calculation of procurement scoring system by public entities. This scoring system allocated 10/20 points depending on the size of the tender to black ownership of the company, whereas the incorporation of BEE into the scoring system will ensure that procurement points take into account all seven elements of BEE. (See also below:  ‘KZN Government BEE Initiative)

KZN Government’s BEE Initiative: emphasising Broad-based BEE compliance

The KwaZulu-Natal government is the first provincial government to undertake a verification process to determine whether its departments are complying with Broad-based BEE policies … and to verify whether government departments comply with the BEE codes of good practice and the BEE Act.

 “The broad philosophy for verifying the provincial government departments is to encourage transformation throughout the entire economy. Importantly, government has an important leverage at its disposal which is procurement of goods and services. This means that in terms of the codes of good practice, the government must procure from companies that are broad-based BEE compliant.”

Higher education qualifications for BEE Verification Agency personnel

Since the inception of the B-BBEE Codes of Good Practice, the Department of Trade and Industry (Dti) has endeavoured to have the verification industry work according to these set standards for B-BBEE verifications. The Dti, in conjunction with University of the Witwatersrand, the University of the Free State and the University of South Africa, is in the process of finalising the development of a Standardised National Training Programme for B-BBEE verification agencies, in order to further standardise the verification process.

CUSTOMER ASSESSMENTS OF BEE RATED’S SERVICE

 

Excellent

Very Good

Good

Average

Below Average

Poor

Pre-verification arrangements

75%

25%

 

 

 

 

Efficiency of the verification process

50%

50%

 

 

 

 

Timeous  completion of the exercise

50%

50%

 

 

 

 

Credibility of verification findings 

50%

25%

 

25%

 

 

Professionalism of verification team

75%

25%

 

 

 

 

TOTAL SCORE (Percentage)

    60%

     35%

 

      5%

 

 

Client comments on our Service

‘The process was handled with professionalism and was all in all hassle free and a pleasure to be involved in.’  Tracey Thompson.  Finance Manager, Kaytech

‘Thanks for attending to the verification and rating process so promptly, most appreciated.’  Dave Alborough, DJ Alborough & Associates

‘Thanks for your help so far – without your knowledge and experience we would have been left guessing.’   Mervyn  Henwood, Management Consultant

BEE RATED’sPROMISE TO CLIENTS

“BEE RATED commits to providing a streamlined, practical verification service, as we understand the importance of accurate and timeously completed BEE ratings. To achieve this promise, we have polices and a methodology which ensure:

  • Professionalism and Responsibility in our behaviour and conduct towards our clients
  • Transparency of our process;
  • Impartiality of the exercise
  • Confidentiality of all client information

How do we know we can live up to our Promise?  

We are confident in our ability to deliver on our promise… BEE RATED’S key personnel are Kim Odell and Tony Kruger, both of whom have:

  •  been involved in B-BBEE consultancy since the inception of the BEE Act in 2003, and have
  •  in-depth and extensive BEE verification and rating experience dating back to 2006.

To experience the “BEE RATED promise” complete the attached Pre-proposal Information Return form, and we will get back to you with a comprehensive proposal and competitive quote.

Questions and Comments are welcomed – please send to BEE RATED:

Tony Kruger at tony@beerated.org                                              Kim Odell at kim@beerated.org

Library

Contact us:

Physical Address:
Suite 2,
2 Fairways Avenue,
Fairways Park,
Mt Edgecombe
Tel: 031 539 3033
Fax: 086 750 2119
Members: A. Kruger; K. Odell

Accreditation: Please click on the logo below

Please click on the logos to directly access the SANAS and ABVA websites

Amended Bee Codes of Good Practice

Amended Bee Codes of Good Practice

B-BBEE Certificate

B-BBEE Certificate

Members:

association-of-bee-verification-agencies-logo

ABVA Membership Certificate

ABVA Membership Certificate