FEATURING IN TFM MAGAZINE ISSUE 20

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B-BBEE CONSIDERATIONS AFTER LOCKDOWN - Page 10

The Disaster Management Act, which was triggered in March this year, and the Regulations thereof, did make allowances and provide relief for organisations on many fronts; however, it did not address B-BBEE legislation. Therefore, organisations remain obligated to present a valid B-BBEE Certificate or Affidavit to their clients with no extension. This article unpacks every aspect of the scorecard, highlighting the potential risks to an organisation’s B-BBEE Scorecard following lockdown. An evaluation is necessary, whether there has been a downturn in business or an organisation has flourished over this time. Not undertaking a proper re-evaluation of the targets in a B-BBEE Strategy, will most likely reflect in an organisation’s overall B-BBEE score following their B-BBEE Verification.

THE R47-03 |  Intends to instil confidence in the B-BBEE Verification process - Page 17

As of 7th October, the R47-03 replaced the R47-02 document. It is the blueprint on how SANAS accredits a B-BBEE Rating Agency on behalf of the Department of Trade, Industry and Competition, which clarifies the role of B-BBEE Rating Agencies and the code according to which they should operate. Although the focus of these regulations is on SANAS accrediting B-BBEE Rating Agencies, organisations should be aware of how these amendments limit and separate the services of a B-BBEE Rating Agency and a B-BBEE Consultant. Needless to say, the R47-03 has not been embraced by all falling into this ambit, but it is binding.

The amendment broadens definitions, introduces limitations on financial rewards between parties, and essentially puts organisations at the forefront of their B-BBEE Verification instead of related or third parties. Most importantly, it forbids a person of any capacity from a B-BBEE Rating Agency from benefiting from the scorecard of their client. The amendments in this document aim to instil confidence, so that when an organisation presents its B-BBEE Certificate to their client, it can be accepted as credible and valid.

THE RESPONSIBILITIES OF AN ‘INDEPENDENT COMPETENT PERSON’ - Page 28

Historically the points on the Socio-Economic Development (SED) Scorecard were the easiest to achieve. One aspect of an SED claim is having an initiative signed off by a Competent Person. This article outlines the criteria for and responsibilities of a Competent Person.

A ‘KNOWING PERSON’ - Page 26

The term ‘knowing person’ is foreign to many; however, if someone is feeding into an organisation’s B-BBEE Strategy, more often than not they qualify as a ‘knowing person’, whether or not they are aware of this status. Carrying this status comes with responsibility and accountability. The article ‘A Knowing Person’ breaks down what constitutes a ‘knowing person’ as well as the responsibility and accountability attached to it. This article should be distributed to all employees in organisations who qualify as a ‘knowing person’, including directors who by default qualify, as they often distance themselves from the day-to-day implementation of their B-BBEE Strategy and have no idea of their exposure to the consequences.

B-BBEE NOT LOCKED DOWN - Page 22

 This is an article by our guest writer, Yuneal Padayachy, the Manager for the Broad-Based Black Economic Empowerment (B-BBEE) Programme at the South African National Accreditation System (SANAS). He was instrumental in developing, and continues to play a vital role in, the Youth Employment Service, an initiative that addresses unemployment from a B-BBEE Recognition perspective in South Africa.

REMOTE B-BBEE VERIFICATIONS - Page 24

Early in the lockdown phase, SANAS announced temporary relaxation on the requirements for conducting an on-site B-BBEE Verification. However, it is on condition that B-BBEE Rating Agencies perform all the critical procedures necessary to verify a B-BBEE claim on a remote basis.

This relaxation is reviewed by SANAS monthly and, at the time of going to print, would remain in place until the end of October 2020. A similar process applies when SANAS conducts its annual surveillance visits on B-BBEE Rating Agencies.

A virtual B-BBEE verification is a new concept for all parties involved and all have had to adapt to the new requirements.

EMPLOYMENT EQUITY AMENDMENT BILL | Is this Bill a Bridge too far? - Page 30

Many question whether the new Employment Equity Amendment Bill is a bridge too far. The government will gazette this bill, which will be introduced in the National Assembly shortly. Therefore, employers must stay abreast of how this bill progresses through the law-making process. It will become known as the Employment Equity Amendment Act 2020 and will take effect on a date proclaimed in a Government Gazette. Whether the Department will enforce numerical targets, with due regard to the challenging and unusual circumstances facing employers today and in the foreseeable future, is something that remains to be seen. This article breaks down this bill.

BENEFICIARIES MOVING UP | Graduating an Enterprise Development Beneficiary to a Supplier Development Beneficiary - Page 33

Section 4.9 held in Statement 400 of Gazette #42496 encourages organisations to align their Enterprise Development and Supplier Development initiatives with their supply chain requirements. Essentially there should be a link between Enterprise Development, Supplier Development and Preferential Procurement.

SKILLS DEVELOPMENT | Where do Bursaries fit in? Page 34

Gazette #42496, published in May 2019, makes changes to the Generic Codes which came into effect on 1st December 2019. Amongst others, it introduced Bursary expenditure to the Skills Development scorecard for Large Enterprises in terms of category A Learning Programmes.

CORPORATE SOCIAL RESPONSIBILITY | A stage for Good Corporate Governance - Page 37

The B-BBEE Act, the Companies Act and the King Code obligate organisations to act as ‘Good Corporate Citizens’ or to have ‘Good Corporate Citizenship’. Any reference to Good Corporate Citizenship means an organisation is guided by strong moral and ethical standards in their daily interactions with their customers, shareholders and employees alike. Many organisations use Corporate Social Responsibility (CSR) as a platform to highlight their role as a Good Corporate Citizen.

Good Corporate Citizens may implement CSR using a Triple-Bottom-Level Approach, which incorporates:

• An economic imperative that is driven by profits;
• An environmental imperative focused on saving the planet; and
• A social element that is driven by people.

THE LAYERS OF DIVERSITY AND INCLUSION - Page 40

How are diversity and inclusion perceived in the South African business landscape? Well, some believe it is a liberal ideology that will have no bearing on their overall business objectives. Yet others embrace the basic concept and consider linking it to their favourable Status Level to portray their corporate culture as being diverse and inclusive. However, in reality, both miss the point, which is that diversity and inclusion is a long-term, sustainable and cohesive means to enhance any business’s performance, especially in terms of innovation.

QUESTIONS & ANSWERS - Page 46

Although those driving B-BBEE Strategies have substantial knowledge about the expectations of The Codes, the continuous evolution more often than not poses challenges as the B-BBEE rules of engagement continue to evolve. It is therefore vital that an organisation has real-time access to amendments and the interpretation thereof. The BEE Chamber, as part of its offering to its members, has a real-time platform to assist those on the job, juggling the balls of compliance. It is fair to surmise that, if one BEE Practitioner is experiencing a challenge with an interpretation, many others are too. We want to share some interaction between the BEE Chamber and its members, where challenges in interpretation were identified and then addressed over the last quarter.