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The Department of Trade and Industry gazetted more proposed amendments to the Generic B-BBEE Codes on Friday 15 June 2018. The draft amendments are open for public comment until 14 August 2018. Once the draft amendments to the Generic Codes are gazetted in final form, they are expected to be rolled out to the Sector Codes

The draft amendments place more emphasis on Black Ownership and Procurement. The amendments also impact Enterprise and Supplier Development, amongst others.

Black Ownership is prioritised by the following draft amendments to the Procurement element:

  • The weighted spend available by procuring from a supplier that is 51% Black Owned using the flow through principle, can be doubled, i.e. the current procurement recognition % can be multiplied by 2;
  • For the measurement of procurement from 51% Black Owned suppliers, the points increase from 9 to 11 and the target increases from 40% to 50%;
  • Spend on large entities that are 51% Black Owned (using flow through) can also be recognised under the measurement for EME’s and QSE’s (which is now collapsed into one element);
  • Designated Group Suppliers are specified as being 51% owned by Black Designated Groups;
  • The ownership Net Value calculation is amended, specifically as regards the application of the graduation factors.

Other amendments include that Supplier Development Beneficiaries cannot be recognised as an Enterprise Development Beneficiary. Under the definition of ‘Absorption’, further education and training after the expiry of the learnership will no longer be recognised. The only criteria for absorption is being appointed under a long-term contract of employment which is defined as an agreement that the individual “would work until his or her mandatory date of retirement”.

Please contact Alternative Prosperity to assist your company with:

 An evaluation of the impact of the amendments on your B-BBEE scorecard;

  • An Ownership review, in particular to evaluate the effect of including Mandated Investments using an Independent Competent Person’s Report. This methodology also allows for the application of the Modified Flow Through Principle;
  • Structuring of an ownership transaction;
  • Briefing on the amendments;
  • Assistance in preparing public commentary on the draft amendments.

Contact for any assistance.

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