Chris van Wyk AQRateAs communicated to the sectoral councils, the Revised Codes will no longer become effective on 11 October 2014 but on 30 April 2015. This means that businesses will be able to apply the existing Codes up until 30 April 2015. Thereafter measurement will be only in terms of the Revised Codes. The extension has been granted in an effort to allow the sectoral councils sufficient time to align their sector codes with the revised codes.

For those of you that have not yet familiarised yourselves with the content of these codes we suggest that you use this extension to do so urgently as they represent a significant departure from the set of rules that you are used to.

willemawardRecently our William Smith and Gabriella Greyling completed their B-BBEE Management Development Programme (MDP) conducted by UNISA and the Dti. They both completed this course earlier this year as part of their preparation for being signed off as Verification Managers at AQRate. Gabriella passed with 3 distinctions and William finished as best student in class. William and Gabriella have been valuable members of our team as analysts and we wish them all the best for their new roles. Congratulations!

trainingdvdcoverHow will the Revised BEE Codes impact your business? Click Here to find out more and order your copy today!

The long awaited amendments to the Codes of Good Practice have finally arrived. The AQRate Verification Services has reviewed and examined the Codes to present you with a Training DVD on the new requirements and what impact these will have.

No1 BEE Verification AgencyWe are proud to announce that AQRate has recently been independently rated the no.1 BEE Verification Agency in SA for 2013/2014 by the Top500 Companies survey. South Africa’s Best Managed Companies was conceptualized to recognize the crème de la crème of business in South Africa. Top 500 employs a team of research analysts who gather information from over 4000 companies annually, and they analyse this data to find the most successful companies from 100 business sectors.

We would like to thank all our clients, business associates, consultants and loyal supporters of any kind for your support and friendship. 

 Please click below to request your BEE Certificate Quote

Africandi - The BEE Calculator App is an innovative, easy-to-user calculator which allows you to establish your B-BBEE score from your phone, tablet or computer.

BQSystems - online EME tool that guides accounting officers through the process of issuing an EME certificate.

Die gewysigde kodes van goeie praktyk kragtens die Wet op Breë Swart Ekonomiese Bemagtiging (BSEB) is niks anders as “ekonomiese grondvergrype” nie, sê ’n kenner.

Verskeie kenners het van hulle laat hoor sedert die kodes twee weke gelede aangekondig is. Die meeste van hulle sê die enigste goeie nuus is dat die huidige kodes vir nog ’n jaar toegepas mag word... Read more at Here

Repeal of Sector Codes Not Aligned to the Amended Codes:

"Sector Charter Councils have until the 15 November 2015 to submit aligned Sector Codes for approval to Minister of Trade and Industry, Dr Rob Davies.

All existing Sector Codes that have not submitted application for approval to the Minister to be aligned with Broad-Based Black Economic Empowerment Codes of Good Practice will be repealed.

Once sector codes are repealed, entities operating in the affected sectors will use the Amended B-BBEE Codes of Good Practice for measurement.

The background to this action by Minister Davies is that on 15 May 2015, all the existing Sector Codes which were not aligned to the Amended Broad Based Black Economic Empowerment (B-BBEE) Codes of Good Practice were given further extension to complete the alignment process by 30 October 2015. The extension was given through a Notice, Government Gazette Number 38799, which further stated that a consideration shall be made to repealing those sector codes that are not aligned and ready for gazetting by 30 October 2015."

Click here for full article

 

Continuing our comment on the BEE Amendment Act, see our next article below highlighting some of the most important changes in the Act. To read the previous 2 articles, click here for Reporting Requirements and click here for Punitive Measures

This week’s comment: Trumping Provision

Section 10(3) of the Act now determines that an enterprise that falls within a sector in respect of which the inister has issued a Sector Code of Good Practice in terms of section 9, may only be measured for compliance in terms of that sector code.  This provision was inserted due to some confusion that existed with respect to the status of the sector codes vis a vis the general codes.  Although the amendment serves to clarify some of the confusions we cannot but wonder whether this amendment represents a missed opportunity to totally clarify the issues surrounding sector codes.  To explain -  in spite of the amendment two areas of uncertainty remain:

i)  The scope of application of the majority of thesector codesare not defined narrowly enough and in most cases attempts to cast the net wider rather than narrower, or in other cases are unclear as to its application. This often leads to the unintended consequence that businesses that do not naturally fall within the ambit of the particular sector find themselves measurable under a particular sector code.   This uncertainty on its own should have disbarred most of these sector codes from receiving final approval – but unfortunately did not.  In order to resolve some of these issues the Dti has attempted to introduce a rule of thumb which requires agencies to use the turnover of a business to determine whether the 'majority' of its business falls within a particular sector.  This 'rule of thumb' is however not gazetted and one would have hoped that the Dti would have made use of the process of amending the Act and in particular section 10 to deal with this.

ii) Section 10(3) also fails to address more complex group structures where a group of companies whose subsidiaries operates in diversified sectors, wishes to obtain a consolidated B-BBEE certificate for the group.  The question begs whether or not such a group is barred from including those subsidiaries that are governed by separate sectoral codes, into the consolidation and if not whether those subsidiaries are forced to then also have their own individualB-BBEE certificatesin terms of the particular sector code it falls under.  A pragmatic approach to this problem might be to allow consolidation of all subsidiaries in terms of the consolidation and to conduct the consolidation at the hand of the general or sectoral codes, whichever the case may be, that appears to be applicable after having applied the Dti's rules of thumb to the group as a whole.  We believe that even if consolidation is allowed in such cases that it would only be the holding company of the group and those subsidiaries that fall outside the scope of any particular sector code that would be allowed to furnish the consolidated verification certificate as proof of itsB-BBEE status(this of course assumes that the consolidation is done in terms of the general codes).  All subsidiaries that fall within the scope of a particular sector code would be in transgression of section 10(3) if it then furnishes the consolidated group certificate as apposed to its sector specific B-BBEE certificate.

In our view the Amendment Act could have done more to clarify the above matters, specifically as it was highlighted to the parliamentary portfolio committee during the commentary process.

Impact of Revised BEE Codes? Click Here for more info regarding our workshops

Last week we started our comment on the BEE Amendment Act with the 1st of 3 newsletters to highlight some of the most important changes - read previous article  here.

This week we look at:

Punitive Measures

Act 53 contained no express punitive measures for transgression of any of its provisions. The Amended Act expressly criminalises several offences and provides for harsh penalties of up to 10 years imprisonment and up to 10% of the annual revenue of the business involved or both. In addition to the above any person convicted of an offence in terms of the Amended Act may not for a period of 10 years from the date of conviction, contract or transact any business with any organ of state or public entity and must for that purpose be entered into a register of tender defaulters which the National Treasury may maintain for that purpose. 

Other than for the reporting obligations discussed above the Amended Act expressly provides that it is an offence to knowingly:

  1. Misrepresent or attempt to misrepresent the B-BBEE status of an enterprise;
  2. Provide false information to or misrepresent information to a B-BBEE verification professional;
  3. Provide false information to or misrepresent information to a public entity or organ of state;
  4. Engage in fronting practice.

The term 'knowingly' as defined in terms of the Amended Act does not mean that the individual involved had intent to defraud or misrepresent. If the misrepresentation happened negligently it would be sufficient to trigger the criminal offence that attracts the penalties referred to above. This places a significant onus on measured entities and verification professionals alike to ensure that the risk of misrepresentation is appropriately mitigated.

Look out for next week’s commentary: Trumping Provision

Page 2 of 4

Contact Details

Tel: 0861 277 283 / 021 045 0801
Email: enquiries@aqrate.co.za 

sanaswp

 

Got a Question?