Broad- Based Black Economic Empowerment (B-BBEE)

Broad-Based Black Economic Empowerment (B-BBEE) is a significant strategic issue, challenge, threat and potential opportunity facing businesses of all sizes, structures and shapes in South Africa today.

The Amended Codes of Good Practice transitional period expires on 30 April 2015, notwithstanding the fact that there is uncertainty about the Sector Codes and the Qualifying Small Enterprise scorecard. B BBEE remains a strategic imperative for many businesses, particularly those impacted on by public sector procurement, licencing and concessions, grants and incentives, private-public partnerships.

B-BBEE has a variety of ingredients, dimensions and facets – better known as elements; it is not only limited to ownership and management considerations. Nevertheless 57 points on the Amended Codes Scorecard relate to black ownership.

Essentially, the practical working of B-BBEE requires a business to ensure that it measures and has certified its B-BBEE status based on the Amended Codes of Good Practice. Mazars has the expertise to assist with your B‑BBEE verification and compliance needs.

Broad-Based Black Economic Empowerment (B-BBEE) generally consists of seven elements:

1.    Ownership:  measures black ownership of the entity.

2.    Management:  measures the Board and management control by black people.

3.    Skills Development:  measures skills development spend on black employees, as well learnerships, apprenticeships and Internships.

4.    Enterprise and Supplier Development:  measures procurement spend from empowering suppliers, as well as Supplier Development and Enterprise Development contributions to beneficiary entities that are at least 51%black owned; contributing  to their development,  sustainability, and  financial and operational independence.

5.    Socio-Economic Development:  measures contributions contributing to socio-economic development.

Your business will fall into one of the following 3 categories:

Exempt Micro-Enterprise (EME)

Has an annual turnover of R10 million or below. An automatic Level 4 (100%) contributor status is achieved. Enhanced recognition of Level 1 (135%) if 100% black owned or Level 2 (125%) if 51% or more black owned.

Qualifying Small Enterprise (QSE)

Has an annual turnover between R10 and R50 million1. The entity will need to score on all 5 elements. Enhanced recognition of Level 1 (135%) if 100% black owned or Level 2 (125%) if 51% or more black owned.

Generic Enterprise

Has an annual turnover above R50 million1. The enterprise will be scored on all 5 elements.

1  certain sector code variations may apply in future

Appeals of verification 

The Verified Entity has the opportunity to lodge an appeal against the outcome of a B-BBEE verification assignment in writing. This letter must be addressed to the Partner in charge of Mazars verification services division. A notification confirming acceptance of such a complaint shall be forwarded to the client within a maximum of 5 working days. Thereafter the appeals and complaints committee will investigate and communicate their findings to the entity and the implemented remedial action within a maximum of 30 working days.

Complaints

The Verified Entity has the opportunity to lodge a complaint against the outcome of a B-BBEE verification assignment in writing. This letter must be addressed to the Partner in charge of Mazars verification services division. A notification confirming acceptance of such a complaint shall be forwarded to the client within a maximum of 5 working days. A suitable independent investigator will be nominated to investigate the complaint in accordance to Mazars Policies and Procedures whereafter the findings will be communicated to the entity, within a maximum of 30 working days.

For more information on how leading Mazars’ experts can assist your entity with B-BBEE verification or consulting services, please view the below brochure. 

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