|Crash Course in BEE - B-BBEE in 5 minutes|
|Friday, 19 September 2008 12:20|
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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.
BEE compliance is measured by means of a scorecard (a broad based 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).
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.
NB the definition of coloured now also includes Chinese
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.
Once you have calculated a score it gets converted to a LEVEL - so we talk about level 8 or level 7 up to level 1 companies.
The codes define three types of companies;
EME below R5million
QSE between R5million and R35million
Generic above R35million
An EME does not need a scorecard. They are automatically allocated a good BEE score. They are allocated a level 4, or level 3 if they are black owned.
A QSE does need a scorecard, but they must choose only four of the seven elements, this gives a QSE a simpler/easier scorecard to comply with.
In brief, the QSE scorecard has the following components and points available:
Broad-Based Black Economic empowerment emphasises all aspects of business and society. Each element is worth 25 points on the scorecard. As a QSE (Qualifying Small Enterprise) you can select any four of the seven elements.
The Generic Scorecard is the scorecard that all other companies should follow. It makes use of all seven elements.
In brief, the generic scorecard has the following components and points available:
Becoming BEE compliant or getting a certificate or getting registered implies calculating and producing a scorecard (a broad based BEE scorecard). It is no use saying "We are BEE" - that does not count - even if your business has taken some of the actions and begun meeting some of the targets. "Becoming BEE" is only about the points/level you have earned and producing a scorecard to certify this.
The process is to identify which scorecard you need to follow, identify the steps you have taken to meet targets, calculate your score, and collect the documentation and evidence to prove that score. Thereafter it is a good idea, though not mandatory, to get that scorecard independently verified, by your auditor, or even a verification agency.
The best way to become compliant is to regard BEE as a process and not a one-time event. That way you will always be up to date with your information and never have that "last minute rush" to obtain your scorecard.
We can help you with all aspects of the 10 step process. Although we are not a verification agency, we will happily recommend one once you are ready and want a verification.
To earn BEE points on Preferential Procurement a company needs to ask it's suppliers for their BEE scorecard.
In short one company
will ask another
company for their scorecard
until all companies have a BEE scorecard of their own.
The only direct reason you will need a scorecard is because your customers are asking for one. If you don't respond you will not be penalised legally but rather potentially not get the business you desire.
A Scorecard = business
Non Compliance = less business/no business.
B-BBEE is a 10 year process. Any companies wanting to produce a scorecard must realise that the targets are not meant to be reached today, it is a process that should take 10 years. The idea is to get a score and over a period of time improve it.
Remember - BEE and becoming BEE compliant is a long term goal, you can't become BEE compliant instantly. You need to prepare and work on the scorecard. When you are ready, becoming BEE compliant will become part of the daily running of your business.
The calculations are simple - in each instance you have an indicator. The indicator will have a target and a points available - you need to try and reach the target to earn the points.
EG Socio-economic Development
Goal - spend 1% NPAT of SED to black people
If you spend 0.5% you will earn 0.5/1% NPAT * 5 points = 2.5
A) No, if that is all you do you will be non compliant. The scorecard is broad based. This means you need to do other projects to do well on your scorecard.
A) You will not get fined or go to jail if you do not comply. You simply run a risk of not getting the business you desire.
A) BEE does not have a registration process. You comply by producing a BBBEE Scorecard. The scorecard will allow you to earn points which inturn will help your customers calculate their own BEE scorecard. Once you have produced a scorecard you can advertise that rating. This may require a registration of a directory which will only happen after you have produced the BEE scorecard.
A) As many as your customers need or more than your competition. It depends on your requirements, some industries will need a very high score while others may not even ever need a BEE scorecard. Also note that it takes times to get a good BEE Scorecard. We estimate that the current average score in the marketplace is less than 40 points.
A) The rating is the last step, if you have prepared all your documentation and have earned enough points to get to the level that you require then contact a rating agency - we are consultants, we can however refer you to a verification agency. If you are starting this process then you need to prepare first. Start with a training session, then prepare your own internal scorecard, earn your points, collect documentation and then start the verification process.
A) If you want a very quick scorecard, you can, but you will not earn any points on it. A scorecard can take some time to prepare. We suggest that you start with understanding BEE, then produce an internal scorecard.
Find out what is best for your company!
You qualify as an Exempt Micro Enterprise - EME. EME's are exempt from BEE.
What does this mean to you - EME's are automatically allocated a good BEE score. You will qualify as BEE compliant (minimum level 4) simply by having a turnover below R5 million.
The proof for an EME is very simple, we can also assist EME's to draw up the correct documentation. If you are below R5 million our EME Pack will be ideal for your business.
You qualify as an Qualifying Small Enterprise or a Generic Company
What does this mean to you - QSE's have an easier scorecard. The do not need to score points in all 7 elements to earn 100 points. In comparison a QSE will earn twice the number of points a generic can by doing exactly the elements.
When a company creates a scorecard they are going to need to understand the BEE scorecard, document their activities and promote their BEE status to their customers. Ideally a company needs a basic understanding of BEE, critically they will be able to create their own scorecard in preparation for a rating and they will be able to earn additional points by targeting points that are related to their business.
We present short half day courses as well as full day courses on topics around BEE and the implementation/understanding of BEE compliance. In addition we have extremely useful tools to prepare a self assessment or manage the documentation.
What we can do to help you
EconoBEE is a specialist BEE compliance company. We assist companies with BEE compliance.
Our services include advisory consulting, training, self assessments and documentation logging
EME Pack - a very quick and easy solution for EME's. We will prepare an Exemption Statement, BBBEE Policy and a statement to customers. In addition we will supply you with various reference documents to help you understand more about BEE.
We have multiple solutions to producing a BEE scorecard. Our very simple and cost effective solution is EconoBEE Scorecard.
EconoBEE Scorecard is a very straight forward, simple and easy to use self assessment rating tool. It will produce a BEE scorecard in minutes and help you understand an improve on your scorecard.
EconoLog/10 Steps to BEE - advanced service. We will actively help you prepare your BEE scorecard. We assist with documentation, advice, training etc to make sure you have all the required tools at your disposal to make BEE compliance wok for your business.
We are very well positioned to help you secure your BEE scorecard rating. We can assist you with all the requirements and even help you find a Verification Agency.
|Last Updated ( Sunday, 05 April 2009 14:40 )|