Original publish date – Thu, 16 Apr 2009 09:24:35 +0000, Keith
The dti has announced that only accredited BEE certificates will be valid from 1st August 2009.
The reasoning is that many companies front (misrepresent their BEE position), or do not do their calculations properly.
In both cases this may be true. Large companies were planning on getting their scorecard verified, however it puts an added burden/expense onto small businesses (SMEs). There is a cost to preparing a scorecard, even if done badly, and now there is an extra cost to getting that scorecard verified. The cost for a small QSE could be R8000-R15000 per annum.
Government is supposed to support SMEs and now the dti is putting an added burden onto those SMEs. SARS has recently changed policies by offering a turnover tax instead of the complex tax structure to companies with a turnover of less than R1 million. However dti is making it more difficult for those businesses.The new reglations appear to state that all certificates (even accountants certificates for EME must now be produced by a (more expensive) verification agency.
This flies in the face of government’s attempts to remove red tape.
There is anoher issue that has me really worried. Small businesses make up a large proportion of our GDP (gross domestic product). It is SMEs to whom we turn to ty to get them to change hearts and minds to become BEE compiant in the first place. With respect to the dti, they do not talk to SMEs or know how they feel. In the past four years I have spoken to and assisted and converted any SMEs to the idea around BEE. We all know that BEE is an emotive subject, and we have gone along way to getting SMEs to make an effort to comply Yes, they get it wrong sometimes, but at least they have starte to do something about it. I now worry that many of those SMEs will see the added burden and expense of verification as so negative that they will move backwards on BEE. The unintended consequences of this regulation will be less compliance, rather than more.
I ask the minister the question: What is more important – getting more companies to embrace BEE, albeit with a slighly erroneous score, or that they reject BEE completely? How important is a slight error in a QSEs scorecard? It will make almost no difference to a large company’s procurement score!
A further issue is that notwithstanding agencies have been accredited, there is still confusion amongst agencies on how to interpret the codes and calculate your scorecard. There is still no consistency. Why insist on verified scorecards then? The regulations further state that agencies in possession of a pre-assessment letter are also allowed to produce a valid scorecard. They need do no more than get a letter from SANAS and can then verifiy. Are they any good? By definition they have not received accreditation so their quality cannot be measured. In any event once they have received their acreditation is only means that they have adhere to the quality management standards of SANAS and this does not guarantee the calculations or interpretations used.