An Overview of BEE
Broad-based black economic empowerment, or BEE, is a government policy in South Africa that aims to advance economic transformation. It also serves to enhance the economic participation of Black people, which consists of African, Coloured, and Indian ethnic groups and South African citizens, within the South African economy.
The Constitution of the Republic of South Africa (1996) sets the framework to provide all South African residents with the right to equality and it fulfils this by creating a basis where each citizen is treated equally.
However, despite the right to equality, not all South Africans are born into equal circumstances. South Africa's history and key events which occurred have resulted in both economic and opportunity disparity according to race.
BEE, therefore, attempts to bridge the gap that exists between formal and substantive equality, ensuring that all South Africans can fully enjoy the right to equality.
DVS BEE Services is a market leader in providing services as a B-BBEE Verification Agency to assess South African companies' BEE levels and scores in the following ways:
- Increases in the percentage of black ownership
- Management controls
- Procurement from black-owned suppliers
- Assisting black-owned suppliers and enterprises
- Up-skilling and employment of disabled black candidates
- Training and development of the company's black employees and unemployed learners
- Issuance and renewal of the BEE certificate
BEE is governed by several components namely:
The Broad-Based Black Economic Empowerment Act, 2003 (as amended)
The Generic Codes of Good Practice relating to Broad-Based Black Economic Empowerment
Certain sector-specific Codes of Good Practice, or Sector Codes.
The Broad-Based Scorecards address the below different pillars which add up to a total score and BEE recognition level. The compliance levels and points do vary across different sectors and size of company so it is important to use the correct scorecard. These pillars are:
- Black Ownership
- Management Control & Employment Equity
- Skills Development
- Preferential Procurement
- Enterprise & Supplier Development
- Socio-Economic Development
Once a South African entity, or company, has been measured against the BEE scorecard, it will achieve a certain score, and this will determine that company's BEE level. This BEE level will be set out in a BEE certificate which is issued, valid one year from the date of issue.
Why does your company need a B-BBEE Certificate?
While obtaining a BEE Certificate and verification is voluntary, businesses must consider it, not only to contribute towards creating a more equal South Africa for all but to benefit from the business aspects.
Obtaining licenses, consent, and/or concession from Organs of State
Certain industries in South Africa require that a company has a certain level of Black ownership or a certain BEE Level so that they can receive and maintain a license to operate.
There are some companies in certain industries that may be asked to indicate their transformation initiatives, which is different to the BEE score in terms of certain BEE codes so that they can obtain concessions to conduct some operations, for example, exporting.
Transactions with Organs of State
Organs of state are typically required to issue a Request for Proposal (RFP) for any work that they wish to source from a company in the private sector. The response to this RFP will be scored out of 100 in terms of either the 90/10 principle or the 80/20.
Many Organs of State are known for setting their BEE criteria which relate either to Black Ownership or BEE ratings.
Transactions with Private Entities
Companies are known to score better BEE if it procures goods and services from other entities with elevated levels of BEE ratings. A supplier or service provider's BEE rating along with their Black ownership can be a consideration alongside the price and quality of products and services when customers choose to use them.
DVS BEE Services - A trusted B-BBEE Verification Agency
To ensure that your company receives the help and support that you need to determine and improve your BEE rating and to have your BEE certificate issued, DVS BEE has a team of highly qualified staff that consists of BEE specialists, Chartered Accountants, Attorneys, and other personnel to provide efficient and cost-effective BEE verification services.
DVS BEE will conduct the BEE verification audit on your company in line with current BEE Codes of Good Practice and several other Sanas requirements and provide the necessary support followed by the issuance of the BEE Certificate.