BBBEE now pressing reality in tourism
Published on Hospitality Forum
Compliance with the new BBBEE Sector Code for the tourism industry is obligatory for all stakeholders in the industry. In fact, the exemption threshold in the Tourism Sector Code has been reduced to R2.5 million annual turnover, as compared to a threshold of R5 million set out in the Generic Codes, to ensure that a significant number of enterprises doing business in the tourism industry are not excluded from compliance with the Sector Code. The Tourism Sector Code has also set a target of 30% ownership to be achieved by tourism-related enterprises over the next 10 years.
At a recent seminar, Keith Levenstein of EconoBEE provided some insights into the implications. “The Toursim Sector Code is a BBBEE scorecard developed specifically for the tourism industry. It is based on the Codes of Good Practice with some differing weighting points, targets and definitions. Nevertheless, it will impact a range of operators in the industry.”
These operators include:
Accommodation: hotels (small and big), resort properties and timeshare, bed and breakfasts, guesthouses, game lodges, backpackers and hostels.
Hospitality and Related Services: restaurants, conference venues, professional catering, attractions, consulting and professional service companies.
Travel Distributed Systems: tour wholesalers, travel agents, tourist guides, car rental companies, cash operators.
Levenstein explains that companies who have an annual turnover of less than R2.5 million are considered Exempt Micro Enterprises (EMEs), and are automatically awarded level 4 status, or level 3 status if 50% black owned.
Qualifying Small Enterprises (QSEs) are entities that have an annual turnover of between R2.5 million and R35 million and need to choose 4 elements on the scorecard with which to comply. All other companies must comply with the generic provisions of the Code.
“The minister has announced that as from 1 August 2009, BEE certificates will only be valid if produced by an agency that has received accreditation, or one that has received a ‘Pre-Assessment’ letter from SANAS,” explains Levenstein. “A company that does not provide evidence or documentation supporting any initiative, will not receive any recognition for that initiative.
“The problem with this requirement is that only 19 verification agencies have been accredited to do verification on the generic codes of good practice, and none has received accreditation to perform verification for the sector codes such as tourism.”
Levenstein notes that tourism companies must understand that a verification agency is not a consultancy, and will not provide any advice or assistance. In fact, it is crucial that companies know what their score is before calling in the agency.“You have to do ‘BEE Accounting’ using for example EconoLog, capture evidence, prepare properly for a verification and be prepared to appeal the verification agency’s decisions and calculations. The objective is to maximise your points, and to achieve this the expertise of a BBBEE consultancy is absolutely crucial.”