What is BEE?
BEE (Black Economic Empowerment) or Broad-Based Black Economic Empowerment (B-BBEE), as it is technically known, is an initiative by the South African government to address historical imbalances of the country by facilitating the participation of black people in the mainstream economy.
Black people refer to African, Coloured, Indian and Chinese persons who are South African citizens by birth or by descent, or who were naturalised prior to the commencement of the interim constitution in 1993, or who those would have been able to acquire citizenship by naturalization prior to 27 April 1994 had it not been for the presence of the Apartheid policy.
BBBEE is governed by the Broad Based Black Economic Empowerment (BBBEE) Act, the BBBEE Codes of Good Practice initially gazetted in February 2007, and then the subsequent Amended Codes of Good Practice gazetted in October 2013.
The measurement of the various elements of a company against the relevant BEE scorecard as per the Codes of Good Practice culminates in scorecard points that correlate to the BEE Contribution Level and associated BEE Procurement as shown in the table below:
Why should I get a BEE certificate?
The BEE certificate is the product of an in-depth SANAS accredited validation process by an authorised rating agency, and hence provides an independent and competent assessment of a company against the relevant legislation. This then allows for it to be accepted by all users throughout the country, and is important for the following business-to-business transactions and opportunities:
- Preferential procurement by clients i.e a company would prefer to use a supplier who is certified and has a good BEE level rather than one who doesn’t, hence it becomes a competitive advantage.
- Tenders – for preferential points in tender scoring.
- Licences – increasing importance in the licence application or renewal process for many industries
- Grants – a requirement for government-related grant applications