The BEE Compliance Process
By Cornilius Parwaringira
Published by BBQ Scorecard issue 7 (first quarter 2009)
Many companies still harbour the perception that becoming B-BBEE compliant is something that they can achieve in a day or hours. The present definition of compliance has also been negatively affected by the misdirected overemphasis placed on Ownership as the soul of B-BBEE. This despite B-BBEE having been transformed into broad based (including five more elements on top of the traditional ownership and management elements). A lot of misconceptions have arisen from the belief that for a company to be labeled B-BBEE compliant it has to be Black owned. The dti codes of good practice talk of B-BBEE controlled and owned companies but this does not mean such a company is automatically B-BBEE compliant. Compliance, not control or ownership is the most important thing for any company to be thinking about. This article seeks to clarify the compliance phenomenon through looking at it as a multi-staged process.
The first recommendable step towards working on a scorecard that will lead to a company being labeled compliant is knowledge acquisition. There is great need to get education on B-BBEE in general, that is, its origin; the status quo; challenges in the implementation process; the way the scorecard works; goals, among other issues. Working on the scorecard without such knowledge can be a waste of time and resources. This is because of the obvious reason that not every company needs a scorecard. Another reason is that the resultant certificate may not be a product that answers the real needs of the company.
Without proper knowledge of B-BBEE, achieving the best score normally takes longer. A company should send the person or employees in charge of B-BBEE issues for training. Training will provide insight that will make working through the compliance journey easier and more meaningful. A B-BBEE workshop is an example of training that a company can opt for. They may even choose not to go with the process and save a lot of company funds if they realize that after all they do not need to work on the scorecard, which is seldom the case however.
After attending a training course on B-BBEE one should read through the DTI codes of good practice published on 9 February 2007. The advantage of reading through the codes is that they offer more detail on the information gathered from the training course. Training offers clarity on legal terms used in the codes. The workshops are more pragmatic in that one gets to apply situations in their own organization to the discussions. Reading through the codes after attending a training course makes one understand them better.
With the necessary knowledge on B-BBEE at hand it is worthwhile making an analysis. This involves looking at where BEE is likely to affect the company. As previously mentioned, not all companies may have the necessity to become compliant. For example, companies with an annual turnover of below R5 million are exempted from B-BBEE. What they need is a statement or letter signed by the owner and their accountant to the effect that they are exempt and are allocated a free score of 65 to 75 points, being level 4 B-BBEE contributor.
Read more...
How does BEE affect you?
BEE is very achievable when implemented correctly. Proper implementation however is the key and it all starts with a sound understanding of what BEE means and how and where efforts should be focused.
Join us at our famous "Practical Implementation of BEE" seminar where we give you genuine insight into Broad Based Black Economic Empowerment.
|
Remember
BEE Points = Business
That's it for the time being.
Regards
Keith and the EconoBEE Team
