B-BBEE ENTERPRISE AND SUPPLIER DEVELOPMENT. Adam Ismail

Transcription

1 B-BBEE ENTERPRISE AND SUPPLIER DEVELOPMENT Adam Ismail 10 Nvember 2017 Webber Wentzel 2015

2 INTRODUCTION BEE IS FUNDAMENTAL TO ECONOMIC ACTIVITY IN SOUTH AFRICA AND ENCOURAGES THE OPENING UP OF THE ECONOMY TO THOSE PREVIOUSLY EXCLUDED BY THE SYSTEM OF APARTHEID THROUGH A MIX OF ECONOMIC PERSUASION AND INCENTIVE. Origins f BEE Freedm Charter Cnstitutinal Mandate Assessments f mdels elsewhere in the wrld Carrt and stick apprach, nt a stick apprach

3 BBBEE LEGISLATIVE HISTORY (1) 2004 BBBEE Act 2007 BBBEE Generic Cdes Varius sectr charters under sectin 12 Varius sectr cdes under sectin 9

4 BBBEE LEGISLATIVE HISTORY (2) 2011 Revised Preferential Prcurement Plicy Framewrk Regulatins t accrd with BBBEE Cdes Revised BBBEE Generic Cdes Draft Phase 2 Revised Generic Cdes BEE Amendment Act - effective 24 Octber 2014 May 2015 Clarificatin nte published and withdrawn Further amendments t the Revised Generic Cdes Phase 2 Revised Generic Cdes finalised

5 BBBEE LEGISLATIVE HISTORY (3) 2015 Trumping prvisins in BEE Amendment Act becmes law Turism Sectr Cde aligned with the Revised Generic Cdes Existing Sectr Cdes repealed due t slw prgress n alignment Chartered Accuntancy / Cnstructin. (Legal???) Further draft Sectr Cdes Published fr cmment BEE Regulatins BEE Cmmissin established (within DTI) Acting Cmmissiner appinted Zdwa Ntuli First investigatins start Revised Sectr Cdes published

6 EXEMPTED MICRO-ENTERPRISES EME = Annual Ttal Revenue f less than R10m EME = deemed Level 4 Cntributr Status 51%+ black wned EME = deemed Level 2 Cntributr Status 100% black wned EME = deemed Level 1 Cntributr Status

7 QUALIFYING SMALL ENTERPRISES Annual Ttal Revenue f between R10m and R50m QSE 51% + black wned QSE= deemed Level 2 Cntributr Status 100% black wned QSE = deemed Level 1 Cntributr Status Verificatin f annual turnver and black wnership by swrn affidavit QSE screcard nw finalised. Threshld higher but still requires cmpliance with all elements n lnger chse 4 elements. Keep Key principles in mind at all time Als keep sectr in mind

8 PRIORITY ELEMENTS: COGP Ownership Skills Develpment Enterprise and Supplier Develpment 40% f net value pints 40% f ttal weighting pints 40% fr each f preferential prcurement, supplier develpment and enterprise develpment Large enterprise must cmply with all pririty elements QSEs must cmply with 2 (1 f which must be wnership) Nn-cmpliance= BBBEE status level discunted by 1 level. Discunted level must be reflected n BEE verificatin certificate.

9 B-BBEE STATUS TABLE: B-BBEE Status Qualificatin B-BBEE recgnitin level Level One Cntributr 100 pints n the Screcard 135% Level Tw Cntributr [85] 95 but < 100 pints n the Screcard 125% Level Three Cntributr [75] 90 but < [85] 95 n the Screcard 110% Level Fur Cntributr [65] 80 but < [75] 90 n the Screcard 100% Level Five Cntributr [55] 75 but < [65] 80 n the Screcard 80% Level Six Cntributr [45] 70 but < [55] 75 n the Screcard 60% Level Seven Cntributr [40] 55 but < [45] 70 n the Screcard 50% Level Eight Cntributr [30] 40 but < [40] 55 n the Screcard 10% Nn-Cmpliant Cntributr < [30] 40 n the Generic Screcard 0%

10 ENTERPRISE AND SUPPLIER DEVELOPMENT Largest element n the BEE screcard fr pints 44 pints ut f 100 pints Clear fcus frm gvernment where pririties must be fcussed, SMMEs as the engine rm fr grwth, black industrialists and radical ecnmic transfrmatin three cmpnents all three pririty elements: preferential prcurement empwering suppliers QSEs EMEs 51% black-wned 30% black wmen wned

11 ENTERPRISE AND SUPPLIER DEVELOPMENT: SOME KEY NOTES All B-BBEE prcurement spend (except if EME) must be frm Empwering Suppliers Empwering supplier = gd SA citizen; cmply with all laws and must meet at least 3 (and if QSE 1) f fllwing: at least 25% f COS (ex labur and depreciatin) must be frm lcal suppliers in service industry labur may be included up t 15% Jbs created at least 50% f jbs created must be fr black peple prvided that the number f black emplyees in previus measurement perid maintained At least 25% f raw materials beneficiated by lcal manufacturing, prductin, assembly r packaging Skills transfer - At least 12 days per annum f prductivity deplyed in assisting Black EME and QSE t increase their sustainability at least 85% f labr csts shuld be paid t Suth African emplyees by the service industry

12 ENTERPRISE AND SUPPLIER DEVELOPMENT supplier develpment mnetary and nn-mnetary cntributins t value adding suppliers t the measured entity cntributing t develpment, sustainability and financial and peratinal independence t EMEs and QSEs which are at least 51% black wned r 51% black wmen wned (what des this mean?) 2% f net prfit f tax

13 ENTERPRISE AND SUPPLIER DEVELOPMENT enterprise develpment mnetary and nn-mnetary cntributins t beneficiaries cntributing t develpment, sustainability and financial and peratinal independence t EMEs and QSEs which are at least 51% black wned r 51% black wmen wned 1% f net prfit f tax General bservatins timing varius ways f achieving it use f agents sincerity and helping ne anther

14 JOHANNESBURG CAPE TOWN 10, 16 & 18 Fricker Rad, 15 th Flr, Cnventin Twer Illv Bulevard, Heerengracht, Freshre Jhannesburg, 2196, Suth Africa Cape Twn, 8001, Suth Africa T T Legal Ntice: these materials are fr training purpses nly and d nt cnstitute legal r ther prfessinal advice