Hello World
Click here for pdf
What is B-BBEE?
Broad-based Black Economic Empowerment (B-BBEE) is a South African Government launched initiative to address the restrictions that exist within South Africa for Black individuals to participate fairly in the economy.
The BEE Act allows for the existence of the B-BBEE ‘Codes of Good Practice’ which provide the structures for the BEE Scorecard and certain rules associated with claiming BEE points.
BEE is essentially a sellers’ club. If your company has a BEE Certificate then your clients can claim BEE points on their BEE Scorecard for purchasing from your business.
Different level BEE certificates (from level 8 to level 1) prevail, depending on what contributions you have made to supporting the integration of black people into the economy. The better level of BEE Certificate you have the more BEE points they can claim.
When clients are choosing which supplier to use they should be looking at price, quality and service and your BEE Score. Depending on how important BEE points are, the more they will consider your BEE Score over the other three elements.
Revised BEE Codes
The first BEE Codes were introduced in 2007 but following a review the South African Government revised the BEE Codes in October 2013. These Revised Codes are applicable from October 2014. However, any entity may apply them in the transition period from October 2013 to October 2014.
The table below shows the BEE Point requirement for each of the 8 BEE Status Levels and how much your customers can claim on their BEE Scorecard as a result. It shows the difference between the 2007 Codes and the 2013 Codes;
| 2007 BEE Codes | 2013 BEE Codes | BEE Status (Level) | Procurement Recognition |
| 100+ | 100+ | 1 | 135% |
| 85-100 | 95-100 | 2 | 125% |
| 75-85 | 90-95 | 3 | 110% |
| 65-75 | 80-90 | 4 | 100% |
| 55-65 | 75-80 | 5 | 80% |
| 45-55 | 70-75 | 6 | 60% |
| 40-45 | 55-70 | 7 | 50% |
| 30-40 | 40-55 | 8 | 10% |
The Revised Codes have reduced the Scorecard Elements from 7 to 5 by combining Management Control and Employment Equity as well as Preferential Procurement and Enterprise Development into single elements. A portion of the old Enterprise Development element has been limited to Supplier Development.
The 2007 BEE Scorecard and the 2013 Scorecard is shown below;
| Criteria | 2007 BEE Codes | 2013 BEE Codes | ||
| Weighting | Bonus | Weighting | Bonus | |
| Ownership | 20 | 3 | 25 | 0 |
| Management Control | 10 | 1 | 15 | 4 |
| Employment Equity | 15 | 3 | – | – |
| Skills Development | 15 | 0 | 20 | 5 |
| Preferential Procurement | 20 | 0 | – | – |
| Enterprise and Supplier Development | 15 | 0 | 40 | 4 |
| Socio-economic Development | 5 | 0 | 5 | 0 |
| TOTAL | 100 | 7 | 100 | 13 |
Exempted Micro Enterprises (EMEs)
It is unrealistic to expect a start-up or micro business to contribute to BEE as there are likely to be few employees. Most businesses are vulnerable try to limit their overhead costs in the first few years.
For this reason, any business that turns over less than R10 million is exempted from being measured against any BEE Scorecard. They get allocated a Level automatically they can prove their annual turnover is below this amount as shown below;
| Black Ownership | BEE Status Level | Procurement Recognition |
| 100% Black Owned EME | Level 1 | 135% |
| >50% Black Owned EME | Level 2 | 125% |
| <50% Black Owned EME | Level 4 | 100% |
EMEs are required to produce an affidavit declaring their qualification as an Exempted Micro Enterprise. EMEs automatically qualify as Empowering Suppliers so their customers are all able to claim BEE Points for buying from them. Under the Revised BEE Codes businesses are targeted to buy 15% of total Measured Procurement Spend from EMEs each year. This should give rise to the establishment and growth of EMEs in South Africa.
