About 500 businesses have submitted comment to the DTI’s proposed revised BEE codes released in October 2012.
Keith Levenstein, CEO of EconoBEE, a BEE advisory firm, says the radical ideas in the proposed codes and lack of communication from the DTI left businesses reeling.
“Some businesses are concerned to the extent that they have virtually given up on compliance. The consequences could be quit severe on some businesses and could mean that a business with a level 3 rating may even become non-compliant,” he says.
“Our advice is that implementing the current codes must take precedence. Waiting for the revised codes is not advised, spend the time now to compile a good scorecard. Prepare well for the current scorecard rating which will give you extra time when the revised codes are finally implemented. This is because each certificate issued is valid for a year from the date of issue.
“The preparation for the current scorecard will also give practical insight into how the revised codes will be implemented, allow you to calculate future costs of implementation and most importantly give yourself many additional months of planning time.
“The government tender act follows BEE principles when awarding tenders, corporates insist on using compliant suppliers to the extent that they have automated systems that remove vendors if they are non-compliant. Private companies are electing to use compliant suppliers as well for their BEE rating,” he says.
Levenstein says it could take some time for the codes to be enacted.
“Following comment from business, the DTI needs to review these comments. This process will take many months if not the rest of the year – even though some reports have stated that this will be quicker.”
After the comments have been collated, a new draft will need to be issued. In fact, a new draft needs to be issued anyway since no revised codes were provided for qualifying small enterprises (QSEs), defined as having a turnover from R5-million to R35-million annually. Practically it could take another year to two years for a new set of codes to be issued.
“The codes could then be gazetted shortly after the second draft. However it is very likely that a year-long transition be applied to help companies ease into the new codes. This process could therefore take quite a long time with an additional year as the transitional period for the revised codes to be issued and required to be used.
“Although the revised codes are not law and will still take many years to come into effect, it is important to note that the DTI, government and industry value the BBBEE Scorecard as a method to improve the inequalities in South Africa. The reality is that BBBEE is here to stay. Without widespread implementation BEE will get harder and harder over the years,” concludes Levenstein.