The Good, The Bad, The Ugly…..and the Revised Codes
The Revised BBBEE Codes have landed, 4 years before their estimated time of arrival. At the time of the 9 February 2007 gazetting of the current Broad Based Black Economic Empowerment Codes of Good Practice, it was recorded (Code 000) that these Codes will be reviewed in 2017.
The Broad Based Black Economic Empowerment Codes replaced the “Narrow Based Codes” which only measured Black Ownership and Management Control. Over the last 6 years we have indeed seen a broadening of the beneficiaries and the benefits generated by BBBEE. No longer were the players predominantly Usual Suspects. The culture, colour and corridors of business and society are integrated and blended together by the vision of creating wealth, peace and harmony. Inspirational initiatives have sprung up educating and skilling up Mamma’s in the townships to take care of the community. In comparison to the ‘60s,’70s and ‘80s we are all more eloquent, educated and equipped to join together and create wealth and wellbeing in our Country of Birth.
Although not immediately apparent, the Revised Codes seem to have moved back in its focus on Equity Ownership (and Global Integration). Equity Ownership has increased in weighting by only 2 points. However, a company that does not have at least 10% black ownership (and meets 40% of the net value targets) immediately have a 1 level disadvantage. A 100% black owned company with a R49.9m total revenue is automatically a level 1 and can totally ignore the remaining 4 elements which take care of the masses. In comparison, a foreign company must invest in the region of R3m in Broad Based initiatives and employ a workforce reflecting the diverse country that we are.
Whilst the targets and numbers in the Revised Codes seem scary, it is good to see an increased focus on improving the quality of initiatives and their intended outcomes. Companies are incentivised to not only train existing employees but also unemployed people. Enterprise Development Beneficiaries are narrowed down to only black owned companies with a total revenue of less than R50m and the abusive shorter payment period contribution has been “detained” to a maximum of only 1.5 points on the scorecard.
Whilst the Revised Codes are written in English, a number of areas are in Earl Grey English and conflicted by ambiguous statements. This is however nothing new, it provides jobs to BBBEE practitioners, however we hope and trust that Statements of Clarity are issued by the DTI Joint Technical Committee or that clarity is provided by way of Regulations issued under section 14 of the BBBEE Act.
Whilst the Black Economic Empowerment Codes have themselves transformed to address the signs of our time, we look forward to continued transformation of Empowerment Codes and their success in driving economic and personal empowerment in order to address poverty, disparity of wealth and to create the Country we want to live and invest in.
By Eric Ackroyd, Verification Director at EmpowerLogic