1. General Principles

[trx_accordion style="2" initial="0"]
[trx_accordion_item title="Who qualifies as a black person for purposes of B-BBEE?" icon_closed="icon-plus" icon_opened="icon-minus-2" id="Q1"] B-BEEE seeks to advance access of black people in the South African Economy. The term "black people" is a generic term which means Africans, Coloureds and Indians—
(a) who are citizens of the Republic of South Africa by birth or descent; Or
(b) who became citizens of the Republic of South Africa by
(i) before 27 April 1994; or
(ii) on or after 27 April 1994 and who would have been entitled to acquire citizenship by naturalisation prior to that date. [/trx_accordion_item]

[trx_accordion_item title="Which entities are measurable under the Codes of Good Practice?" icon_closed="icon-plus" icon_opened="icon-minus-2" id="Q2"]

The following Entities are measurable under the Codes:

  • all Organs of State and Public Entities;
  • all Measured Entities that undertake any economic activity with all Organs of State and Public Entities;
  • any other Entity that undertakes any economic activity, whether direct or indirect, with any Entity that is subject to measurement under the Codes. [/trx_accordion_item]

[trx_accordion_item title="How is B-BBEE classification determined?" icon_closed="icon-plus" icon_opened="icon-minus-2" id="Q3"]B-BBEE classify entities based on annual turnover, namely:
• Start-up Enterprise. This is a recently formed or incorporated entity that has been in operation for less than one (1) year. A start-up enterprise does not include any newly constituted enterprise which is merely a continuation of a pre-existing enterprise;
• Exempted Micro-Enterprises (EMEs). This are entities that generate an annual turnover of R0 and less R10 million.
• Qualifying Small Enterprises (QSEs). These entities have an annual turnover of above R10 million and less R50 million.
• Large Enterprises, are entities with an annual turnover of above R50 million.[/trx_accordion_item]

[trx_accordion_item title="How can a measured entity obtain a B-BBEE Certificate?" icon_closed="icon-plus" icon_opened="icon-minus-2" id="Q4"]

• All EMEs are exempted from B-BBEE compliance and receive automatic B-BBEE Recognition Level 4.
• An EME which is at least 51% black owned automatically receive level 2 status and those which are 100% black owned receive level 1.
• EMEs only have to obtain a sworn affidavit or CIPC certificate.
• The sworn affidavit must be signed by a Commissioners of Oaths.

• QSEs which are at least 51% black owned or 100% black owned are treated the same as EMEs, they receive automatic B-BBEE Recognition Levels 2 and 1 respectively and also have to only obtain a sworn affidavit.
• The rest of the QSEs (less 51% black shareholding) must be verified through an accredited verification professional.

Large Enterprises:
• Large companies must be verified by an accredited verification professional.[/trx_accordion_item]

[trx_accordion_item title="Who is authorised to issue a B-BBEE Certificate?" icon_closed="icon-plus" icon_opened="icon-minus-2" id="Q5"]

A B-BBEE certificate can only be issued by a verification professional accredited either through the South African National Accreditation Systems (SANAS) or the Independent Regulatory Body of Auditors (IRBA).

Both institutions have lists on their websites (http://www.sanas.co.za) or (http://www.irba.co.za/index.php/b-bbee-verification-assurance).

IRBA based verification professionals only have until 31 December 2016 to issue certificates.[/trx_accordion_item]

[trx_accordion_item title="How to calculate the 40% sub-minimum for priority elements?" icon_closed="icon-plus" icon_opened="icon-minus-2" id="Q6"]

The 40% sub-minimum is applied as follows:

40% on the 8 points for Net Value based on time graduation factor.

Skills Development:
40% to the total weighting points for skills development (40% to 20 points).

• Enterprise and Supplier Development:
40% sub-minimum targets for Code Series 400 apply to each category namely, preferential procurement, supplier development and enterprise development.

This is interpreted as 40% to the total points of each of the three categories, meaning 40% of 25 points for preferential procurement, 40% of 10 points for supplier development and 40% of 5 points for enterprise development.[/trx_accordion_item]

[trx_accordion_item title="How many sector Codes do we have and which entities must implement them?" icon_closed="icon-plus" icon_opened="icon-minus-2" id="Q7"]

The following are valid sector Codes issued in terms of the process outlined in Statement 003, Code Series 000:
• Property Sector Code;
• Agri Sector Code;
• Forestry Sector Code;
• Financial Services Sector Code;
• ICT Sector Code;
• Integrated Transport Sector Code;
• Tourism Sector Code; and
• Marketing, Advertising and Communication Sector Code.
• The Construction and Chartered Accountants Sector Codes were repealed with effect from 17 February 2016. Therefore, entities within these sectors must determine their B-BBEE compliance in terms of the generic Codes from 17 February 2016.

In terms of section 10 (3) of the B-BBEE Act as amended, an entity that operates in a sector in respect of which the Minister of Trade and Industry has issued a sector Code must determine their B-BBEE measurement in terms of the sector Code.[/trx_accordion_item]

[trx_accordion_item title="Is it a violation of the Act or an offence, or both to split or divide an entity?" icon_closed="icon-plus" icon_opened="icon-minus-2" id="Q8"]In terms of Para 2.5 Codes Series 000, an entity that splits itself to ensure eligibility as an EME or QSE would constitute an offence and such will be dealt with in terms of the Act.[/trx_accordion_item]

[trx_accordion_item title="Can bonus points be included when calculating the 40 sub-minimum for priority elements?" icon_closed="icon-plus" icon_opened="icon-minus-2" id="Q9"]

The inclusion or identification of priority elements in the Codes is an intervention to accelerate the achievement of an inclusive economy and decent job creation.

Code Series 000 has in Para 3.3 has clearly indicated that the 40% sub-minimum applies to the net value criteria on the ownership scorecard, and to the total points for skills development. The summary of the scorecard on Para 8.1 has outlined the total points for skills development as 20 points.

Inclusion of the bonus points to calculate the sub-minimums would undermine the objective of accelerating economic transformation, and reducing B-BBEE to a tick box exercise.[/trx_accordion_item]

2. Ownership

[trx_accordion_item title="How long can an entity continue to benefit from the continued consequence as a result of loss/sale of shares by the black participant?" icon_closed="icon-plus" icon_opened="icon-minus-2" id="Q1"]The continued consequences is allowed for the same number of years the black shareholder held his/her/ provided the shares were held for a minimum period of 3 years, and the ownership transaction was legitimate.[/trx_accordion_item]

[trx_accordion_item title="Which multinational corporations qualify for the equity equivalent investment programme?" icon_closed="icon-plus" icon_opened="icon-minus-2" id="Q2"]Multinational corporations that have a global policy that prevents them from selling equity in any host state.[/trx_accordion_item]

[trx_accordion_item title="Is an entity allowed to apply both the exclusion and modified flow-through principle when determining black ownership?" icon_closed="icon-plus" icon_opened="icon-minus-2" id="Q3"]In terms of Para 3.4.1 Code Series 100, an entity benefiting from the modified flow-through cannot benefit from the exclusion principle.[/trx_accordion_item]

3. Management Control

[trx_accordion_item title="Who qualifies as an Executive manager?" icon_closed="icon-plus" icon_opened="icon-minus-2" id="Q1"]Executive Management' is defined in paragraph 3.4.1 Code Series 200 "Executive Management positions include the following: Chief Executive Officer, Chief Operating Officer, Chief Financial Officer and other Executive Managers that serve on the Board of Directors".[/trx_accordion_item]

[trx_accordion_item title="Which Economically Active Populations Targets (EAP) are to be considered, and how are they applied?" icon_closed="icon-plus" icon_opened="icon-minus-2" id="Q2"]

The EAP targets used are those released by the Department of Labour from time to time.

If an entity operates only at a provincial level, the provincial EAPs will apply. However, if it operates nationally, the national EAP are applicable.[/trx_accordion_item]

[trx_accordion_item title="What happens if an entity does not distinguish between other Executive Management and Senior Management?" icon_closed="icon-plus" icon_opened="icon-minus-2" id="Q3"]According to Para3.3 Code Series 200, the entity will measure both categories as a single indicator with a weighing of 6 points.[/trx_accordion_item]

[trx_accordion_item title="Can EAP targets be applied to the disabled person’s target?" icon_closed="icon-plus" icon_opened="icon-minus-2" id="Q4"]EAP apply to all categories except board participation and disabled persons.[/trx_accordion_item]

4.Skills Development

[trx_accordion_item title="Definition of unemployed leaner?" icon_closed="icon-plus" icon_opened="icon-minus-2" id="Q1"]Unemployed learner as per the Codes ‘means a learner that was not in the employment of the employer and party to the learnership agreement concerned when the agreement was concluded. The employer and learner must therefore enter into a contract of employment. Refer to the Skills Development Act'.[/trx_accordion_item]

[trx_accordion_item title="Can the entity count black people under black unemployed?" icon_closed="icon-plus" icon_opened="icon-minus-2" id="Q2"]

The objectives of Code Series 300 are to increase investments for human resource and skills development for black people, as part of the broader government objective. In keeping with this objective the Codes have provided for the training of both black employed and black unemployed.

Therefore, black unemployed people trained under Para of the scorecard cannot be recounted again under This will amount to misrepresentation of B-BBEE status and may constitute an offence in terms of section 13O (1) (a) and (b) of the B-BBEE Act.[/trx_accordion_item]

[trx_accordion_item title="Is the 15% cap on Category F and G as well as other legitimate training expenses applied to total value or individual training?" icon_closed="icon-plus" icon_opened="icon-minus-2" id="Q1"]In terms of Para 5.3 and 5.4 of Code Series 300 the 15% cap is applicable to the total value of the skills development expenditure. This means that if the measured entity has spent R100 000.00 for informal training and R50 000.00 for accommodation towards black people, the 15% will apply to the total value of each amount.[/trx_accordion_item]

5. Enterprise and Supplier Development

[trx_accordion_item title="Are imports still excluded from total measured procurement spent (TMPS)?" icon_closed="icon-plus" icon_opened="icon-minus-2" id="Q1"]Imports are still excluded provided it is based on brand specifications or there are no local suppliers or it is for further value adding in South Africa.[/trx_accordion_item]

[trx_accordion_item title="Would an entity that maintains the same staff complement qualify with the least 50% of jobs created are for Black people requirements for purposes of empowering supplier?" icon_closed="icon-plus" icon_opened="icon-minus-2" id="Q2"]50% jobs created: means new jobs created and not maintaining or filling existing vacancies. For example, if an entity operates with 100 jobs, for purpose of satisfying this requirement, the measured entity must first maintain the same staff complement, and 50% of newly created jobs must be for black. Simple maintenance of the 100 jobs would not qualify.[/trx_accordion_item]

[trx_accordion_item title="Can the entity outsource the 12 days skills transfer for black owned EMEs and QSEs?" icon_closed="icon-plus" icon_opened="icon-minus-2" id="Q3"]The measured entity may facilitate the skills transfer directly or indirectly through professional services 12 days irrespective of how many beneficiary entities are trained per day.[/trx_accordion_item]

[trx_accordion_item title="What is the definition of service industry?" icon_closed="icon-plus" icon_opened="icon-minus-2" id="Q4"]The Codes are silent on a definition of a service industry, and we recommend that you engage the Services Sectoral Training Authority which is amongst others responsible for the management of a list of entities within the services sector.[/trx_accordion_item]

[trx_accordion_item title="What does procurement from designated group supplier mean?" icon_closed="icon-plus" icon_opened="icon-minus-2" id="Q5"]This means procuring from entities that are 51% owned by the following "Black Designated Group" as defined in the Codes:

(a) unemployed black people not attending and not required by law to attend an educational institution and not awaiting admission to an educational institution;
(b) Black people who are youth as defined in the National Youth Commission Act of 1996;
(c) Black people who are persons with disabilities as defined in the Code of Good Practice on employment of people with disabilities issued under the Employment Equity Act;
(d) Black people living in rural and underdeveloped areas;
(e) Black military veterans who qualify to be called a military veteran in terms of the Military Veteran Act 18 of 2011.[/trx_accordion_item]

[trx_accordion_item title="Is inter-company/group purchases excluded from TMPS?" icon_closed="icon-plus" icon_opened="icon-minus-2" id="Q6"]According to Para 5.12 Code Series 400 intra-group procurement is included in calculating the TMPS.[/trx_accordion_item]

[trx_accordion_item title="Who qualify as beneficiaries of supplier development and enterprise development?" icon_closed="icon-plus" icon_opened="icon-minus-2" id="Q7"]51% black owned EMEs and QSEs or 51% black women owned EMEs and QSEs.[/trx_accordion_item]

6. Socio-Economic Development

[trx_accordion_item title="Can black employees of the Measured Entity qualify as beneficiaries of Socio-Economic Development Contributions if the contributions are in line with Annex 500(A)?" icon_closed="icon-plus" icon_opened="icon-minus-2" id="Q1"]No, such would not qualify because it is not aligned to the objectives of Socio-Economic Development (SED). SED consist of monetary or non-monetary contributions, with the specific objective of promoting access to the economy for black people. SED is not the same as Corporate Social Investment or fringe benefits to the employee by the employer. The Benefit Factor matrix provides guidance as to what qualifies as an SED initiative. This is measured on an annual basis, meaning that the measured entity will contribute 1% NPAT annually towards SED initiative.[/trx_accordion_item]