Dr. Rob Davies, Minister of DTI published the Amended Codes of Good Practice on 31 May 2019 for implementation within 6 months from date of Gazette. This means that all BBBEE Verifications conducted 01 December 2019 on wards will have these changes applied irrespective of financial period being measured.

There are 4 sections of the Amended B-BBEE Codes being updated. Below are the main changes:

SCHEDULE 1: INTERPRETATION AND DEFINITIONS

  • Net Value Date has been removed
  • Current Equity Interest Date has been added – The later occurring date of commencement of statement 100 and the date upon which the transaction undertaken by the Measured Entity in order to achieve black rights of Ownership became effective and unconditional
  • Long term Contract of Employment has been added – A legal agreement between an individual and an entity that this individual would work for until his or her mandatory retirement date
  • Absorption has been amended – The Measured Entity’s ability to successfully secure a long term contract of employment for the Employee, Learner, Intern or Apprentice.  Proceeding with long term education, has been removed
  • Critical Skills amended definition – Changed from Any SETA to Relevant SETA
  • Qualifying ESD Development Contributions was added to the codes and is in line with historical application from previous revisions

STATEMENT 000: GENERAL PRINCIPLES

  • Start-Ups are ordinarily deemed as EME criteria unless tendering for a contract in excess of the threshold, will deem the corresponding scorecard
  • Clarity on EME/QSE who want to use enhancement can only achieve this by using the Flow-Through Principle and not Modified Flow Through
  • Joint Venture section included outlining conditions for these certificates – has been previously released but now included in the full amendments of codes

STATEMENT 300: SKILLS DEVELOPMENT ELEMENT

  • Skills Development indicators have been amended
  • 2.1.1.1 – Overall Spend – 6 points for 3.5% of Leviable Amount on EAP statistics
  • 2.1.1.2 – Bursaries for Black Students – 4 points for 2.5% of Leviable Amount
    • No double counting of training spend in 2.1.1.1 and 2.1.1.2
  • 2.1.2.1 – Learnerships/Internships/Apprenticeships – previously two criteria’s collapsed to one for “Black People” – 6 points for 5% of total employees
  • Category F&G Cap increased to 25% of total training spend
  • Legitimate Training Costs remains 15% of total training spend (excluding Bursary additional costs)
  • Bursaries or scholarships for 2.1.1.2 – includes fees, textbooks, sustenance or accommodation and is not capped
  • Stipends linked to a bursary program for 2.1.1.2 can be included
  • Definition for Category A training expanded to included Bursary programs
  • Absorption definition redefined as noted above – Students who obtain as 12 month contract via a training program do not count towards absorption bonus points. Only obtainable via full time employment

STATEMENT 400: ENTERPRISE AND SUPPLIER DEVELOPMENT

2.1 PREFERENTIAL PROCUREMENT:

  • Total points now 27 – meaning 10.8 of 27 needs to be obtained to avoid discounting principle
  • Procurement from +51% Black Owned Suppliers increased to 11 points (+2) with a target of 50% (previously 40%)
  • Suppliers who are +51% Black Owned using Flow Through Principle obtain a further 1.2 multiplier to spend
  • The multiplier for First Time Supplier status has been removed
  • +51% Black Owned suppliers can be counted under EME/QSE spend.
  • Generic is capped at 5 years since initial purchase

2.2 and 2.3 SUPPLIER AND ENTERPRISE DEVELOPMENT:

  • +51% Black Owned Generics are added as a qualifying beneficiary provided they were a +51% Black Owned QSE or EME at the first time of assistance. Can be applied for 5 years from the initial date of assistance
  • Definition for qualifying as a beneficiary has been expanded
  • Supplier Development – Must be a supplier
  • Enterprise Development – must not be a supplier
  • ESD Matrix – “Guarantees provided on Behalf of Beneficiary” now have a 50% recognition of the Guarantee Amount

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