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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 400: Measurement of the Enterprise and Supplier Development Element of Broad-Based Black Economic Empowerment

Statement 400: The General Principles for Measuring Enterprise and Supplier Development

9. Enterprise Development and Supplier Development Contributions


9.1 The following is a non-exhaustive list of Enterprise Development and Supplier Development Contributions:


9.1.1 investments in beneficiary entities;


9.1.2 loans made to beneficiary entities;


9.1.3 guarantees given or security provided on behalf of beneficiaries;


9.1.4 credit facilities made available to beneficiary entities;


9.1.5 grant Contributions to beneficiary entities;


9.1.6 direct costs incurred by a Measured Entity in assisting and hastening development of beneficiary entities;


9.1.7 overhead costs of a Measured Entity directly attributable to Enterprise Development and Supplier Development Contributions;


9.1.8 preferential credit terms granted by a Measured Entity to beneficiary entities;


9.1.9 preferential terms granted by a Measured Entity in respect of its supply of goods or services to beneficiary entities;


9.1.10 contributions made to settling service costs relating to the operational or financial capacity or efficiency levels of beneficiary entities;


9.1.11 discounts given to beneficiary entities in relation to the acquisition and maintenance costs associated with the grant to those beneficiary entities of franchise, licence, agency, distribution or other similar business rights;


9.1.12 the creation or development of capacity and expertise for beneficiary entities needed to manufacture or produce goods or services previously not manufactured, produced or provided in the Republic of South Africa is provided for in Government's economic growth and local supplier development policies and initiatives;


9.1.13 facilitating access to credit for beneficiary entities without access to similar credit facilities through traditional means owing to a lack of credit history, high-risk or lack of collateral;


9.1.14 provision of training or mentoring by suitably qualified entities or individuals to beneficiary entities which will assist the beneficiary entities to increase their operational or financial capacity; and


9.1.15 the maintenance by the Measured Entity of an Enterprise Development and Supplier Development unit which focuses exclusively on support of beneficiary entities or candidate beneficiary entities.


9.1.16 new projects promoting beneficiation by the Measured Entity for the benefit of Enterprise Development and Supplier Development Beneficiaries.


9.1.17 provision of preferential credit facilities to a beneficiary entity by a Measured Entity may constitute an Enterprise Development and Supplier Development Contribution. Examples of such contributions include without limitation:


9.1.18 provision of finance to beneficiary entities at lower than commercial rates of interest;


9.1.19 relaxed security requirements or absence of security requirements for beneficiary entities unable to provide security for loans; and


9.1.20 settlement of accounts with beneficiary entities over a shorter period of time in relation to the Measured Entity's normal payment period, provided the shorter period is no longer than 15 days;


9.1.21 providing training or mentoring to beneficiary communities by a Measured Entity. (Such contributions are measurable by quantifying the cost of time (excluding travel or commuting time) spent by staff or management of the Measured Entity in carrying out such initiatives. A clear justification, commensurate with the seniority and expertise of the trainer or mentor, must support any claim for time costs incurred).


9.1.22 maintaining an Enterprise Development and Supplier Development unit by the Measured Entity. (Only that portion of salaries and wages attributable to time spent by the staff in, and the other expenses related to, promoting or implementing Enterprise Development and Supplier Development constitute contributions.)


9.1.23 Payments made by the Measured Entity to suitably qualified and experienced third parties to perform Enterprise Development and Supplier Development on the Measured Entity's behalf.