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Broad-Based Black Economic Empowerment Act, 2003 (Act No. 53 of 2003)

Amended Codes of Good Practice (2013)

Amended Code Series 000: Framework for Measuring Broad-Based Black Economic Empowerment

Statement 000: General Principles and the Generic Scorecard

3. Application of the Codes


3.1 The following Entities are measurable under the Codes:
3.1.1 all Organs of State and Public Entities;
3.1.2 all Measured Entities that undertake any economic activity with all Organs of State and Public Entities;
3.1.3 any other Measured Entity that undertakes any economic activity, whether direct or indirect, with any other Measured Entity that is subject to measurement under paragraph 3.1.1 to 3.1.2 and which is seeking to establish its own B-BBEE compliance.


3.2 The basis for measuring the B-BBEE compliance of an Entity in terms of paragraph 3.1 is:
3.2.1 Paragraph 4, in the case of an Exempted Micro-Enterprise;
3.2.2 The Generic Scorecard and QSE Scorecard, in the case of other Measured Entities.
3.2.3 A Measured Entity in a sector in respect of which a sector code has been issued in terms of Section 9 of the B-BBEE Act as amended, may only be measured for compliance in accordance with that code.


3.3.1 The Priority Elements are as follows: Ownership: The sub-minimum requirement for Ownership is 40% of Net Value(40% of the 8 points) based on the Time Based Graduation Factor as provided in Annexe 100 (E). Skills Development: The sub-minimum requirement for Skills Development is 40% of the total weighting points for Skills Development. Enterprise and Supplier Development: The sub-minimum requirement for Enterprise and Supplier Development is 40% for each of the three categories, within the Enterprise and Supplier Development element, namely preferential procurement; Supplier development and Enterprise development.


3.3.2 COMPLIANCE TO PRIORITY ELEMENTS A Large Enterprise is required to comply with all the Priority Elements; A Qualifying Small Enterprise is required to comply with Ownership as a compulsory element, and either Skills Development or Enterprise and Supplier Development.


3.3.3 DISCOUNTING PRINCIPLE EFFECT Non-compliance with the 40% sub-minimum requirements of any of the priority elements, as per paragraph 3.4.2 above, will result in the following outcomes for both Large Enterprises and Qualifying Small Enterprises: The actual points scored by the Measured Entity and the consequent level that the Measured Entity would have achieved were it not for noncompliance with the 40% sub-minimum requirements will be recognised by the Verification Agency ("the Recognition Level"); Notwithstanding the recognition in above, the Measured Entity's B-BBEE status level will be discounted by one level down until the next applicable verification period in which the Measured Entity can demonstrate compliance with the 40% sub-minimum requirements, at which point the Recorded Level will become the applicable ratings level for that Measured Entity in that verification period.


3.4 The requirement to submit data to the Department of Labour under the Employment Equity Act 55 of 1998 is only applicable to 'designated employers' who employ 50 or more employees. However, for the purpose of measurement for both Generic and Qualifying Small Entities that employ less than 50 employees are required to submit sufficient evidence for verification purposes.