The worst B-BBEE certificate I’ve ever seen

Original publish date – Thu, 15 Mar 2012 14:13:57 +0000, Keith

This is probably the worst BEE Certificate I’ve ever seen.

Let’s identify the errors and problems on it:

  1. Produced by Hansie D Labour Brokers – not an accredited agency or approved auditor
  2. Ownership states “Male owned”. It does not mention any black ownership. (On contacting the company they confirm they have no black ownership)
  3. The rating certificate is called “Unaccredited Transitional SMME”. There was a transitional scorecard in 2007 ending in 2008, otherwise “transitional” does not make sense. In B-BBEE terms we use QSE, not SMME.
  4. Spelling: “procerement recognition rating”. Also “Non Complaint Contributor” instead of “Non-Compliant Contributor”.
  5. It lists the procurement recognition rating as level 2.  The procurement recognition is 125% for level 2. However if you add up the points “earned” on the four elements, it comes to 100, which is level 1
  6. It lists the 7 elements by number 1100, 1200 up to 1700. This numbering methodology was used in the draft codes of 2005. The gazetted codes of 2007 use 801, 802, up to 807
  7. It lists code 1200 as “equity ownership”. It should be “Management”
  8. It lists code 1500 as “preferred procurement”. It should be Preferential Procurement”
  9. It lists code 1700 as “residual”. This is also a relic of the draft 2005 codes, and should be “Socio Economic Development”
  10. It awards 25 points to ownership because the business is 100% white owned. It should be zero.
  11. It awards 25 points to “equity ownership” (should be management) because the business is 100% white managed. It should be zero.
  12. The certificate is unsigned.
  13. It mentions a date of 01-02-2011 and a validity date of 28-02-2012. Certificates at most can be valid for one year, not 13 months.
  14. The table “BEE Status Qualification” describes the points to levels table: e.g “Level Two Contributor > 85 but < 100 on the generic scorecard”. It should be “Level Two Contributor >= 85 but < 100 on the generic scorecard”. There is a big different between greater than, and greater than or equal to. This is why the entity apparently earned 100 points but is level 2.
  15. The points earned for preferential procurement is 25 and enterprise development also 25. Based on the numerous errors we would doubt their methodology and calculations.
  16. Based on the errors identified so far we would doubt that they took into account key principle 2.6:  “Any representation made by an Entity about its B-BBEE compliance must be supported by suitable evidence or documentation. An Entity that does not provide evidence or documentation supporting any initiative, must not receive any recognition for that initiative.” We doubt that they have the evidence to support their conclusions.
  17. Based on the errors identified so far we believe that key principle 2.4 applies: “Any misrepresentation or attempt to misrepresent any enterprise’s true B-BBEE Status may lead to the disqualification of the entire scorecard of that enterprise.” This certificate definitely misrepresents the company’s true B-BBEE status.



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