Questions posed to the B-BBEE Commission in relation to the impact of Covid-19 on B-BBEE implementation
The B-BBEE Commission is aware of the impact of COVID-19 on some aspect of B-BBEE, and thus we wish to provide the following clarification with regard to B-BBEE
Covid-19 Frequently Asked Questions
The B-BBEE Act is applicable during the lockdown period and all measured entities are required to comply with the requirements. Failure to comply will be a violation of the B-BBEE Act.
The restrictions that are placed on various activities are covered and articulated in the National Disaster Management Regulations issued by government from time to time during the lockdown.
The B-BBEE measurement is based on evidence provided by the measured entity in relation to its implementation of the B-BBEE Act on an annual basis.
It is without doubt that the annual plans and extent of performance of some of measured entities in relation to performance against the elements on the scorecard may be affected due to the lockdown and the restrictions placed on business activities.
Measured entities are encouraged to adjust plans and to the extent possible continue to implement the initiatives towards achieving their annual targets.
A measured entity will be measured on the basis of initiatives that have been implemented during the measurement period in compliance with the B-BBEE requirements.
B-BBEE framework inherently provides the opportunity to improve performance on the targets on an annual basis.
Therefore, the B-BBEE Commission is not authorized by the B-BBEE Act to grant any exemption relating to the implementation of B-BBEE initiatives affected by the national COVID-19 lockdown.
The requirements for recognition of any specific contribution in respect of each element are set out in the Codes of Good Practice.
The requirements set are linked to the objectives of the B-BBEE Act in section 2 of the B-BBEE Act. This means any contribution made by a measured entity must be for a B-BBEE initiative or for B-BBEE purposes.
The Solidarity Fund is established to respond to the current COVID-19 pandemic and not for B-BBEE purposes, although it is granted that some of its beneficiaries may be black people based on the demographics in South Africa.
Everyone is encouraged to contribute to the Solidarity Fund to enhance the fight against COVID-19, however, these contributions cannot be claimed for B-BBEE.
It is common cause that COVID-19 has and will have a negative impact on the South African economy at large, including performance towards B-BBEE.
The measures to address economic consequences of the pandemic are done within the rule of law and adherence to the prescripts of the Constitution of South Africa.
All entities that are required to implement B-BBEE as outlined in Statement 000 of the Codes of Good Practice are required to implement the B-BBEE Act.
Therefore, there is no exemption from implementation of and compliance to the B-BBEE Act.
Yes. Section 10 (1) of the B-BBEE Act states that every organ of state and public entity MUST apply the relevant code of good practice issued by the Minister in accordance with section 9 of the B-BBEE Act in: -
a) Determining qualification criteria for the issuing of licenses, concessions or other authorisations in respect of economic activity in terms of any law;
b) Developing and implementing a preferential procurement policy;
c) Determining qualification criteria for the sale of state owned enterprises;
d) Developing criteria for entering into partnerships with the private sector; and
e) Determining criteria for the awarding of incentives, grants and investment schemes in support of B-BBEE.
All organs of state and public entities must comply with section 10 (1) of the B-BBEE Act. Failure to implement section 10 (1) of the B-BBEE Act is a violation of the B-BBEE Act.
For any deviation or exemption, an organ of state must approach the Minister of Trade, Industry and Competition in terms of section 10 (2) of the B-BBEE Act, which if granted must be published in the government gazette.
Exempted Micro Enterprises (EMEs), which are entities with the annual turnover of R0 to R10 million, are already exempted from the verification process and qualify for an automatic level.
EMEs are only required to use a B-BBEE sworn affidavit or a certificate issued by the Companies and Intellectual Property (CIPC) confirming their turnover and level of black ownership at no cost.
All EMEs qualify for a B-BBEE level 4, whilst EMEs that are 51% and 100% black owned would qualify for a B-BBEE level 2 and 1 respectively.
The normal timeline for filing the major B-BBEE transaction is within 15 days of the conclusion of the major B-BBEE transaction.
The parties that concluded or will conclude a major B-BBEE transactions from 11 March 2020 to 30 April 2020 are granted indulgence to file the major B-BBEE transaction for registration within 30 calendar days following the end of the lockdown period, that is 30 days from 4 May 2020.
These reports are crucial for performance of the mandate under section 13F(1)(f) of the B-BBEE Act and measured entities must submit timely.
All JSE listed entities, organs of state and public entities, and SETAs that are required to submit compliance reports any time from 26 March 2020 to 30 April 2020 may submit their compliance reports within 30 calendar days following the end of the lockdown period.
These reports are crucial for performance of the mandate under section 13F(1)(g) of the B-BBEE Act and measured entities must submit timely.
All stakeholders that have a timeline that falls on a date that is during the lockdown period for submission of responses to allegations in a complaint and possible B-BBEE misrepresentation, responses to findings in an investigation, responses for alignment of major B-BBEE transactions and any relevant deadline are granted indulgence to submit these to the B-BBEE Commission within 30 calendar days following the end of the lockdown period, that is 30 April 2020.
No face to face meetings or educational and awareness sessions such as workshops, seminars and conferences will be held in or outside the B-BBEE Commission offices, irrespective of the size of the session or the number of participants until further notice.
All essential meetings will be held through video and/or teleconferencing facilities to ensure that service delivery is not negatively impacted.
The request for engagement should be submitted to Mramare@beecommission.gov.za
Our offices will officially re-open on 4 May 2020, unless otherwise communicated, although it may operate with skeleton staff in light of the gradual easing of the lockdown.
The B-BBEE Commission remains available to offer the necessary support and free advice to all entities and organs of state during the lockdown period and beyond.
The emergency line for the B-BBEE Commission is 082 903 6398.
Please feel free to contact us on the contact details below for queries:
Private Bag X84
Issued by the B-BBEE Commission
29 April 2020