‘Revised BEE codes will plug the gaps’ - Davies

The Minister of Trade and Industry, Dr Rob Davies, says black economic empowerment remains an imperative in South Africa. "Black economic empowerment is not just a social and political imperative. We need to make sure that in the country’s economy, control, ownership and leadership are reflective of the demographics of the society in the same way the political space does. That’s why we are saying BEE remains an economic imperative. We cannot expect to grow and develop as a country if the leadership of the economy is still in the hands of only a small minority of the society," Davies said at the launch of the revised Broad-Based Black Economic Empowerment Codes of Good Practice yesterday. Minister Davies said the revised Codes sought to amend the secondary legislation arising from the Broad-Based Black Economic Empowerment Act to make sure that people were truly and broadly empowered in South Africa, and genuine broad-based black economic empowerment took place. The amendment of the BEE Act and the revision of the Codes, said Davies, would go a long way in plugging the gaps that businesses had taken advantage of such as fronting, "tick-box" compliance, and the exorbitant amounts of money that small enterprises have to pay to consultants to prove they are BEE compliant. "The current generic scorecard contains seven elements and these have been reduced to five in order to align the elements more closely with the trajectory of the economic growth and development in the country, with a total of 105 points assigned to the five elements. All companies, except the exempted micro enterprises (EMSs), should comply with all the elements of the scorecard. There has also been some adjustment to the points allocated and the qualification criteria. There is also enhanced recognition of the status of black-owned micro enterprises," said Davies. He said one of the new things being proposed in the revised Codes was the introduction of minimum requirements for priority elements. These are ownership, skills development and enterprise and supplier development. Qualifying small enterprises are required to comply with two of the elements, although ownership is compulsory, while large entities will have to comply with all of the requirements. Minister Davies said the launch of the Codes signalled the opening of a sixty-day period in which business and all other members of the public could submit their comments on the Codes for consideration before the amendments are finalised.