He who has a question remains a fool for five minutes. He who does not ask a question remains a fool forever. – Chinese Proverb
Being one of the first authorities in all matters B-BBEE, you can imagine we spend a lot of our time answering questions.
And guess what?
We like them. It’s a way of engaging with our clients – and also a way of knowing that they are engaging with B-BBEE. So we’ve decided to throw you a little gift.
We’ve compiled a short list of our most frequently asked questions – with answers!Now you’re wondering: what’s the catch?
There is none! Basically, this is just because we’re a friendly bunch.
So here are a few helpful snacks for your morning.
1. What Is The Latest Regarding ‘Empowering’ Status?
If you’re wondering what on earth we’re talking about, here’s a little background. In the old days, your company might have been recognised as a “value-adding supplier”. We’ll spare you the technicalities, but mostly this meant that you provided services that were labour-intensive, which is something that B-BBEE likes. As a result, other companies that used business as a supplier received enhanced B-BBEE recognition for their spend.
When the codes were revised, the concept of the value-adding supplier was done away with, and replaced with a new concept: the ‘empowering’ supplier.
It’s not just semantics: an ‘empowering’ supplier is entirely different from a value-adding one. Whereas in the old days, it was a nice bonus to be considered “value-adding”, nowadays it is critical to be considered “empowering”. If your company isn’t an empowering supplier, none of your clients can use your certificate or receive B-BBEE recognition for their spend with you.
The next thought is, of course, that it’s vital to ensure your company is indeed an ‘empowering’ supplier.
Well, here’s the definition of what it means to be empowering:
“A B-BBEE compliant entity, which is a good citizen South African entity, complying with all regulatory requirements of the country”.
The definition of “good citizen South African entity” is not clear though. It has yet to be confirmed by the Department of Trade and Industry (dti).
Soooo… does your company qualify or not? The answer is yes – for now. Smaller companies enjoy this status automatically. And: “the DTI released a statement awarding all generic companies empowering status ’until further notice,’” says Mitishka Ramdhani, head of B-BBEE at Mpowered.
Of course, that means that the department could release a separate statement, precluding several companies from the definition at any time. “I have told my clients to focus attention on achieving Empowering status rather than waiting on the DTI,” says Mitishka.
Sounds like the most proactive way forward.
2. Who Qualifies As Black, According To The B-BBEE Definition?
Ironically, it’s a pretty complicated answer. Gavin Fourie, B-BBEE Solutions Centre Specialist at Mpowered, offers the following:“Black people” is a generic term which means African, Coloureds and Indians(a) who are citizens of the Republic of South Africa by birth or decent; or(b) who became citizens of the Republic of South Africa by naturalisation –(i) before 27 April 1994;(ii) on or after 27 April 1994 and who would have been entitled to acquire citizenship by naturalisation before that date.
Chinese people who would have been entitled to citizenship by naturalisation as per point ii) also qualify.
3. Does Our Transformation Plan Orient Our Organisation In A New Direction?
Your B-BBEE efforts take their cue from a broader transformation plan. But is that plan doing what it is supposed to do – that is, steering the organisation on a whole new path? Could your transformation plan be seen as a working document that literally maps out a new way of doing things and a new destination?Perhaps it is – and if so, great!
Or maybe you thought it would, but there is some disconnect between the actions identified on paper and the direction in which your company is travelling. If so, why?
4. How Do I Know If A Certificate Has Been Compiled According To The Old Codes Or The Revised Codes?
Your supplier sends you a certificate, and you’re trying to work out whether it’s valid under the revised codes, which came into effect in March 2015 – or whether it was compiled under the now-outdated ones.
"How to tell if your supplier’s certificate was compiled using the Revised Codes:
– For Generics:
If it was done using the Revised Codes, there would be five elements on the scorecard, not seven as per the old codes. The certificate will also read: “Measured on the B-BBEE Codes of 2013 (Gazette number 36928)”.Last pointer here: The revenue threshold will be above R50-million, whereas previously any company with a revenue of more than R35-million was considered generic.
– For Qualifying Small Entities (QSEs):
If it was done using the Revised Codes, the certificate would feature five elements measured and not four as per the old codes. It will also read: “Measured on the B-BBEE Codes of 2013 (Gazette number 36928)”.
Gavin continues: “According to the revised codes, QSEs can now also make use of affidavits to declare their level. At least 51% black-owned is considered an automatic Level 2; 100% black-owned is Level One, and both are automatically ‘empowering’ (see our first question).
Revenue threshold for QSEs is now Between R10-million and R50-million; whereas previously it was between R5-million and R35-million.
– For Exempt Micro Enterprises (EMEs):
These can also make use of affidavits to declare their ownership. Under the Revised Codes, below 51% black owned is considered an automatic Level 4; at least 51% black owned is Level 2, 100% black owned is Level 1. Revenue threshold is up to R10-million (under the old codes this limit stopped at R5-million).”
Simple, isn’t it?
5. Is Mpowered’s Software Compatible With Our Accounting System?
Transformation Specialist Trevenesen Ragavan says that Mpowered’s systems can be developed to speedily ‘talk’ to your existing accounting system.
“We are willing to do the development for the plugin free of charge from our side,” he says. Cost-wise “the dev work on your side is the cost that you will need to cover.” So in short, the answer is yes, as many of our clients have discovered!
And there you have it! Five questions that we are frequently asked. If you’re feeling a sense of information overload or just can’t figure out what we’re on about it, don’t worry. Just pick up the phone, and we’ll talk you through anything you’d like to know!