Major BEE Verification Flaw Exposed – EconoBEE Newsletter July 2009

EconoBEE – Newsletter July 2009
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All QSE Verifications produced after 1st August may be invalid

The dti has issued regulations stating that certificates produced after 1st August 2009 will only be valid if produced by an accredited verification agency or one that has a pre-assessment letter from SANAS.

SANAS (SA National Accreditation System) has been mandated by the dti to accredit verification agencies. In February they accredited a small number of agencies and since then have accredited more – 19 in total. Their accreditation methodology is to ensure that agencies have met certain criteria, including showing competency in BEE knowledge. The 19 agencies that have been accredited have all received certificates stating that they have been accredited to render verification services for the B-BBEE Codes of Good Practice, specifically Codes 100,200 300, 400,500,600 and 700.

This refers to the generic scorecard, and the agencies are accredited to verify based on those codes. They do not have accreditation rights to render services on other codes, e.g. code 800 – which is the QSE code of good practice. Any agency therefore that produces a certificate for a QSE is not accredited for this particular task. Therefore all certificates produced after 1st August based on code 800 will be invalid.

Neither do accredited agencies have rights to render accreditation services for the recently gazetted sector codes – construction, tourism and forestry.

This is more problematical because methodology around code 800 is at least covered by the guidelines issued by the dti in July 2008, so in theory SANAS could quite quickly issue pre-assessment letters to accredited agencies and then accredit the agencies. In all likelihood this was an error by SANAS, but they have to remedy it before 1st August. We cannot have a situation where SANAS, the controlling body bends its own rules.

The sector codes are not even covered by the guidelines, because they have only recently been gazetted. As a result it will be impossible for the dti and the relevant sector charter steering committees to properly issue guidelines for those charters. Thereafter SANAS must assess the competency of the agency before accrediting them to issue sector charter certificates. This implies that those scorecards cannot be used for procurement purposes until the process is complete.

“We are raising this as a matter of law in the interests of ensuring that verification is done properly and the law is applied correctly” explained Keith Levenstein, CEO of EconoBEE a BEE consulting firm. “This is quite simply a mess. If verification is to be done properly then SANAS and the dti should lead the way in doing their job properly. SANAS, the dti and the verification industry have been very vocal in ensuring that every scorecard needs verification and verification must only be done by SANAS accredited agencies or those with “pre-assessment letters” from SANAS. These agencies will be breaching their terms of reference with SANAS if they issue a certificate based on code 800 or any of the charters.”

Financial Year End

Most companies have their financial periods ending in February or June and in most cases companies realize it when its too late to carry out any B-BBEE initiatives that can make them earn the B-BBEE points for that period. I recently talked to a company, which is just finalizing its year-end and they already know their score and are now looking at ideas and ways of improving their B-BBEE score in their new financial period. Such a company will surely meet its customer’s needs of a good B-BBEE score and hence improve their chances of getting the much-needed business in the new financial period. However for other companies the B-BBEE quandary continues if they are not doing anything and are going to continue to give their customers empty promises of becoming B-BBEE compliant in the next financial period.

Like any other business policy or strategy, B-BBEE requires all the basics of effective strategy implementation – good ideas, organisation, resources allocation, action plan, monitoring and evaluation. Our workshops/conferences and scorecard methodology can help you produce / improve your scorecard and effectively implement B-BBEE.

Prepare for BEE Verification




Time is quickly running out to secure your seat. Join us at the “Prepare for BEE Verification” conference in JHB, CPT and DBN.

9th July 2009 – JHB – Gallagher Estate – (early bird expired)
16th July 2009 – CPT – Belmont Conference Centre – (early bird expired)
23rd July 2009 – DBN – Makaranga Garden Lodge – (early bird deadline 2nd July 09)

R2850.00 plus VAT (R3249 incl VAT)
To reserve your seat please phone 0861 11 3094 or visit



Do your customers want your BEE Certificate or Verification? What are you going to do – click here to find out?

Not sure how to get a BEE Scorecard, click here to see a demonstration of how best to produce your own BEE scorecard.



BEE Points = Business

That’s it for the time being.

Keith and the EconoBEE Team

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