On 5 October 2012, the Revised Codes of Good Practice were publishedin the Government Gazette, for public comment. (Notice 800 of 2012,No.35744.Interested parties have 60 days (until 4 December 2012)within which to submit comments to the DTI on these revised codes.Once all comments have been received the Minister will release theCodes to be implemented in the New Year.The new Codes for 2013 have huge penalties for not complying. Forexample if your company is Generic (Annual Turnover of R35 millionand more) you will be required to comply with 5 elements. Out ofthe 5 elements 3 elements are priority elements. The 3 prioritythresholds are Ownership, Skills Development and SupplierDevelopment (which is Enterprise Development combined withPreferential Procurement).The codes become more complex because they expect you to reach atarget of 40% of targets for all the 3 priority elements.Highlighted in red – Priority ElementsCurrent Codes NewCodes OwnershipTarget of 25% black participation Target of 40% minimum target of 25% black ownership 10% Equity Deal must be concludedPenalty for non-compliance Penalty for non-compliance-GenericNo Penalty Drop 2 Levels Penalty for non-compliance-QSE Drop 2 Levels Management ControlTarget says the same Top Management, Junior Management removed. Employment Equity targets moved to Management Control
Skills DevelopmentTarget 3% of Payroll 6% of Payroll Supplier DevelopmentPreferential Procurement 20points Target 3% NPATEnterprise Development 15 40 pointsExample: - AGeneric company seeking to qualify to tender forgovernment work must demonstrate a category 4 compliance level.Taken at face value, the new codes will immediately reduce non-compliant companies to level-six status if they do not comply withany of the minimum requirements will drop 2 levels, thus making themineligible for state work or to supply private sector companiesreliant on state work.Example: - AQSE company (annual turnover between 5-35 million) canchoose 2 priority elements, but ownership is compulsory. If they donot comply they drop 1 level.Although the revised codes are only published for comment, it isclear that changes are now inevitable and it is going to be moredifficult to achieve a high score.Therefore, it now becomes absolutely vital to prepare for andachieve a good scorecard before the new codes are finalised.Your B-BBEE compliance is something that you can no longer shy awayfrom; let us assist you before the implementation of these newrules.The earlier you start the easier; we offer a free evaluation of yourcompany’s status and will present a clear business plan of what youneed to do to become compliant.Your B-BBEE certificate may no longer be enough; we can easilyassist you with your Skills development, Procurement and Enterprisedevelopment without any changes to your company ownership.