A letter from the Editor
As the year comes to an end we are inclined to look backward, and evaluate the year that has passed. In South Africa the headlines have been dominated by the recession and loss of employment, however we have seen amazing strides in the area of BEE. Due to the perceived lack of finances companies have had to become more strategic about their contributions, and have been looking for measureable returns and impact.
This has been great for BEE, and has spurred the launch of the concept "Sustainable BEE™", a methodology that looks at our BEE contributions as part of a holistic business and economic growth strategy. This is an milestone and will prove important for the implementation of BEE in the year to come.
Duncan Brown, Head: Marketing BEESA Group
BEE COMPLIANCE vs COMPETIVENESS
Guy Tayor, Senior Consultant: BEESA Group
Most businesses have been asked the question, "Are you BEE compliant?" The question is not so much whether anyone is compliant, but whether BEE is an issue of compliance at all?
When looking at most of the other legislation governing business (Labour Relations Act, Basic Conditions of Employment Act, Skills Development Act etc.) the pattern is generally the same. These acts are sometimes hundreds of pages long, describing a detailed set of rules. If you abide by these rules, business continues as usual. However, if you fail to comply then some sort of punitive measure is taken such as a fine or an venture to the Labour Court. These pieces of legislation all require organisations to comply with certain criteria and the failure to do so results in some sort of punitive measure. These acts have encouraged the business community into the habit of thinking that any law or regulation that comes from Government is something that you are considered compliant or non-compliant with. In other words there is no scale or degree of compliance, an organisation falls either one side or the other.
The BEE Act is different. All the Government expects a business to do is to have their contribution to BEE measured according to a set of criteria defined in the Codes. The more the organisation contributes, the higher their BEE rating. To prove their contribution the organisation would have to be verified and will receive a certificate with a BEE score on it. One aspect of the BEE scorecard looks at the BEE contribution of an organisation's suppliers. Therefore your organisation's score will count towards your customer's score and so it will be your customers who decide whether your BEE score is good enough for them to accept your organisation as a supplier. If you don't get a score, there are no fines or any other punitive measures; it will simply mean that it will become more difficult for you to do business in this country.
This is like writing matric. Nobody has to write the matric exams, but if you want to continue your studies you will have to pass the exams at a certain level. Also, in a situation where there is a course that is oversubscribed, only the applicants with the best matric marks would get in. Similarly if your organisation is in a government tender situation where you offer the same price as a competitor, whoever has the higher BEE score will win the tender.
The question therefore is not whether your organisation is BEE compliant, but rather "Is your organisation BEE competitive?"
Read a letter from the president confirming the government's stand on BEE
HOW TO MANAGE VERIFICATION PREPERATION
Leila Moonda, CEO: BEE Institute
What is BEE VERIFICATION?
BEE Verification is an independent assessment aimed at validating the BEE Status of a business. A Verification certificate and Report confirming the business' status is issued at the end of this process.
Verifications are based on the DTI's Broad-Based BEE Scorecard contained in the Codes of Good Practice or a Sector Codes of Good Practice.
Businesses' can be verified according to the Generic Scorecard (annual turnover in excess of R35 million) or the Qualifying Small Enterprises Scorecard (businesses with an annual turnover between R5 million and R35 million) or those categories as defined in a Sector Codes of Good Practice.
A systematic evaluation of the BEE elements is undertaken to determine the level of compliance to the relevant BEE codes. The Verification Agent will assess, verify and validate BEE information for decision-making. BEE verification agencies should assess, verify and validate both disclosed and undisclosed BEE related information of businesses. The Verification Agent conduct a BEE audit of your business, calculate your BEE score and award a BEE Certificate to your business valid for one year as proof of your BEE level.
BEE Verification
The key to BEE verification is the scorecard and unlocking the scorecard and getting the points requires documentation. Getting your BEE points should not be by coincidence, it requires proper management of the documentation and the verification process.
A Verification Agency cannot allocate points to an organisation without their being proof of the claims being made. This proof is in the form of documentary evidence. Therefore having the correct documents is crucial for getting the points. Remember no documents, no points!
The BEE Institute offers its members training on preparing a company for verification.
WHAT IS SUSTANABLE BEE?
Leila Moonda, CEO: BEE Institute
Sustainable BEE™ is a trademarked Black Economic Empowerment philosophy and business process which allows a company to align its BEE objectives to its business objectives and therefore maximises return on investment (ROI). Sustainable BEE TM is about ensuring that companies align their Employment Equity and Skills Development initiatives to ensure the up-skilling of staff, which in turn allows these individuals to be promoted more quickly though organisations and ensuring that they have the right skills when doing so. Aligned to this is the idea that a company's socio-economic spend should include spend on the future skills that the company would need through support of students either at school or at tertiary institutions.
Sustainable BEE is also about a company aligning its Procurement spend with its Enterprise Development and Socio-Economic Development initiatives to support and grow BEE companies in its supply chain or its customer base.
Through these efforts the skills of the country can be improved, small business can be supported and developed or new business created. All of which would lead to a greater number of people being employed in the formal economy thus reducing unemployment and poverty.
For more information about Sustainable BEE contact the BEE Institute
More Interesting Articles:
|
