BEE compliance – concerns raised

A RESEARCH of core industry
groupings – including
transport – presented by
the department of trade
and industry (dti) in August
has revealed what it terms
a “worrying” percentage of
organisations that have still
failed to reach compliance
levels.
This despite the fact
that a number of freight
industry sectors have broadbased
black economic
empowerment (BBBEE)
charters in the final stages
before government approval.
The report released to
FTW said: “It is clear from
the response that the
majority of organisations
are not far down the road to
implementing BBBEE.”
Only 19.7% declared
that BBBEE was fully
implemented, while 38.9%
said that they had “no plan
or progress”.
However, the department
did say it was “somewhat
encouraging” to note that
30.2% of the respondents
at least had a BBBEE plan
– although it might not be
fully implemented.
The biggest problem lies
with the small and medium
enterprises.
Their response indicated
that 72.7% of small
and 71.5% of medium
had either “no plan” or
“planned” or was “in process
of implementation”. This
compared with 41.8% for
large organisations.
At the same time, only
16.7% of small enterprises
reported that BBBEE was
“fully implemented”. For
medium organisations the
figure was 26.3%, while for
large it was 21.1%.
But the “maritime and
service enterprises” and the
“forwarding and clearing
(f&c)” sectors of the freight
industry both report good
progress being made in their
efforts to comply with the
BBBEE guidelines published
by the dti in February.
The maritime sector is
“busy with alignment of
the industry charter with
the code of practice”,
according to Dr Fred Jacobs
of Safmarine who heads up
the sectoral grouping behind
the BEE charter. “We are
going through this process,”
he added, “and have had a
number of meetings with
the department of transport
(DoT) to discuss the subject.”
And the process should
be finished soon, according
to Moeketsi Sikhudo, who is
director of BEE at the DoT.
“In terms of a time line,
he told FTW, “we are likely
to complete it by the end of
this year.”
FTW has also been told
that the f&c sector has
followed a similar course,
with the charter in the stage
of being legalised. All the
players – industry, labour and
government – have signed
the proposed charter, and it
now has to be promulgated
before it takes effect.
But there’s another piece
of new legislation which
will have a profound effect
on businesses which fail
to comply with the BEE
guidelines, according to BEE
Rating Solutions – whose
core business is to verify
and rate the BBBEE status of
clients’ businesses.
Non-compliance, it says,
will lose a company any
government business it had.
In a release to FTW, the
company stressed that the
Preferential Procurement
Act was in its final stages of
alignment with the Broad-
Based Black Economic
Empowerment Act.
“According to the
national treasury,” it added,
“the revised act has been
submitted to parliament
and will be promulgated
probably by November. This
will enable the government
and public entities to achieve
their BBBEE objectives by
only procuring products or
services from companies that
are BEE compliant.”
The BBBEE scorecard will
form part of the evaluation
criteria on all government
and public entity tenders. “A
maximum of up to 20
points,” said BEE Rating
Solutions, “can be earned by
a tendering party based on
its scorecard, and forming
part of the Preferential
Procurement Act formula.
If your overall score
on your scorecard is below
30 points you are a noncompliant
contributor to BEE
– and this implies that by law
you are not entitled to supply
a product or a service to the
aforementioned entities.”