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Cabinet tweaks BEE codes to widen scope

The cabinet has agreed to revise in principle the scorecard that governs the broad-based black economic empowerment (BEE) codes of good practice. The revised codes will be published for public comment, but Trade and Industry Minister Rob Davies said last night that the intention was “to broaden” the effects of empowerment. The government’s policy was broadly to transform the economy to be representative of the country’s race demographics, while aiming to redress the imbalances of the past by seeking to “substantially and equitably transfer and confer ownership, management and control” of financial and economic resources to the majority of citizens. Davies explained that it was important that bigger companies that tended to win brownie points by “claiming the space” of passive black shareholding deals be brought to the party .

Among the proposed changes is reducing the generic “scorecard” to five elements. They would be ownership; management with employment equity combined into one; skills development; preferential procurement and enterprise development rolled into one; and socio-economic development. In particular, preferential procurement and enterprise development had been merged to form a “supplier development element”. Also, management and employment equity had been “consolidated”, the cabinet said. This will effectively mean that a company with an untransformed management will get fewer points, even if its employment equity figures are reasonably good.

Shadow minister of trade and industry Wilmot James said the DA wanted the thresholds at which BEE requirements applied to be raised substantially. Currently businesses with a turnover of over R35 million a year must comply fully with the scorecard. He said the government gazette had adjusted the threshold for compliance of BEE, “but did not say what the (turnover) threshold ought to be. We think it is a good idea… but we don’t have a fixed number”. The DA would look at the proposals and identify a suitable threshold, he said. He added that smaller companies should be free to focus on productivity and a suitable workforce, while bigger companies had more space to comply. Davies said it would become easier to be recognised as 100 percent black-owned, which qualifies as level one of eight-score levels. This was because companies would not need to be verified by an agency, which was often costly.

Source: www.iol.co.za

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Cabinet tweaks BEE codes to widen scope

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