Executive Guide to BEE Print
Saturday, 31 October 2009 15:04

What is BEE?

BEE, or more accurately B-BBEE refers to Broad Based Black Economic Empowerment is a policy of the SA government which encourages companies to help transform the country. BEE is about broad-based activities that benefit black people

Shortened Definition: Black means African black, coloured or Indian people who ARE South African citizens by birth or became a South African citizen before 27th April 1994

The BEE Scorecards

BEE compliance is measured by means of a scorecard (a broad based BEE scorecard). The scorecard is based on various elements and your company is measured out of a maximum of 100 points (in some cases it is possible to obtain more than 100 points).

 Scorecard by Company Size

  • Large company scorecard (above R35 million per annum) - Generic Scorecard
  • Small/Medium company Scorecard (between R35 million and R5 million per annum) - Qualifying Small Enterprise Scorecard (QSE)
  • Exempt from the BEE scorecard - Exempt Micro Enterprise (EME)

The BEE Codes of Good Practice is a government document that describes how the scorecard works.

The elements on which you are rated is what make BEE broad-based. It covers various aspects of the economy, society and the company.

 The 7 Elements

  1. Ownership - this measures the percentage of shares in the business that are owned by black people (as per the definition above)
  2. Management - the directors and top management of the business
  3. Employment equity - the employees in the business
  4. Skills development - this measures the amount of money spent of training of black employees
  5. Procurement - your suppliers and their scores
  6. Enterprise Development - your spend on helping other black owned enterprises
  7. Socio-Economic Development - your spend on assisting charitable organisations

Becoming BEE Compliant

The process of Becoming BEE Compliant is one that is not necessarily difficult but one that does take some careful though and time.

In order to be BEE compliant one needs a scorecard, with points. As you earn more so you become more BEE compliant.

The key issues when Becoming BEE Compliant is always make sense out of your BEE deals. It is sense less to over spend in one area and under spend in another.

Earning BEE Points

Each of the seven elements has a certain number of points available. The points can then be earned on an element if targets are met or on a pro rata.

On a practical note: The BEE codes require certain types of targets to be met. In some cases it is monetary, others % of Owners, Managers or staff compliment. Either way if you want to earn more BEE Points you need to do reach those targets.

Example: If you have a target to spend R10 000 on Enterprise Development.

You may start by searching for existing beneficiaries, perhaps a supplier or customer. Identify if they need Enterprise Development Help before you offer assistance. If they do need assistance or will benefit from your contribution then you will need to spend the R10 000 before you earn all your BEE points.

BEE Points to Levels

BEE Scorecard - points to level rating table
Contribution Level Qualification
Level 1 Contributor ≥ 100 points
Level 2 Contributor ≥ 85 points but < 100 points
Level 3 Contributor ≥ 75 points but < 85 points
Level 4 Contributor ≥ 65 points but < 75 points
Level 5 Contributor ≥ 55 points but < 65 points
Level 6 Contributor ≥ 45 points but < 55 points
Level 7 Contributor ≥ 40 points but < 45 points
Level 8 Contributor ≥ 30 points but < 40 points
Non-Compliant Contributor < 30 points

BBBEE and Empowerment

True Empowerment for us is not focusing on one element (usually Ownership) but rather focus on the Broad Based Black Economic Empowerment (BBBEE or BEE) scorecard and the elements within.

The BEE Scorecard and its elements offer businesses a broad opportunity to empower businesses and communities. Each element is tailored to make sure every part of true empowerment is reached.

Example: A small donation to a young child's school fees. The child's parents are semi-retired employees of your company who are trying to earn extra money by selling sweets on the side of the road. You then decide to help their business grow by buying them a caravan. You decide to send one of your junior employees back to school so that he can learn to read and write. When he comes back he has a better job reserved for him.

We see TRUE BEE EMPOWERMENT happen every day - what is your business doing to make a small difference?

BEE Certificate

A BEE Certificate is the very last step in your BEE journey.

In essence though, the BEE Certificate is a summarised form of a BEE Scorecard.

The process required: Start by producing a BEE scorecard. Once you have a scorecard improve it until you are satisfied that they score you have is perfect. Then sign it (acknowledging the accuracy) and give it to the customers who require your BEE status.

BEE Resources

EconoBEE has prepared many useful articles, documents for download and even newsletters to ensure you have all the resources you need.

In addition to the FREE information we have extremely powerful BEE solutions available, contact us and get the best tools, documentation, advice and scorecard for your business.