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.”