BEE Pressure Becoming More Intense – EconoBEE Newsletter – 15 June 2011

EconoBEE - BEE Points = Business

This has been an absolutely fantastic week for transformation in South Africa. Major landmark decisions have been taken by government. The alignment of the PPPFA (Preferential Procurement Policy Framework act) with the B-BBEE Act, steps taken by the DTI to finally end fronting and even the ICT charter has been gazetted for comment. The better news is… more business opportunities, more customers and more growth. If ever there was a time to use your BEE status to get business, it’s now.


Is your BEE Pressure Off – Not likely!

A good BEE Scorecard results in good customer service. This is the reason most companies produce a BEE scorecard in the first place. They need to be able to justify that they have earned points by buying from compliant suppliers.

Each company should ask you for your BEE scorecard. While they are asking you tend to feel a little more pressure –



Notice to suppliers

We have embarked on a BEE Journey. As a valued supplier we need your Broad-Based Black Economic Empowerment status. Please send this by April 2011.

If you are unable to provide a valid BEE status then please provide proof that you have begun the process.

Yours Sincerely
Procurement Department

Now you are thinking, excellent, April has now passed, we haven’t been asked again and for now you think you have a “get out of jail free card”. In reality you have just let the customer down. Even though they have stopped asking for your status does not mean they don’t want it any more.

To understand this we need to look at BEE from their side.



To all staff

We have embarked on a BEE Journey. We need a Broad-Based Black Economic Empowerment status by the end of April 2011. Only data that applied to our business prior to end of April is valid. Any data outside of this period will not be valid.

It is absolutely imperative that we prepare as much data as possible to ensure our customers are satisfied.

Yours Sincerely
HR/B-BBEE Department

A company wanting to implement B-BBEE needs data to be concurrent with their rating period. It is not unlikely that they have a cut off period for receiving data. On the other hand it also happens so often that they speak to a supplier, ask for a certificate which they agree to and on that understanding decide not to pursue the supplier.

The net result is your customer will begin asking for your scorecard again, when they start preparing for a BEE Verification the next year. The next year though they will be better prepared. If you have not prepared your own BEE Scorecard you will find yourself in exactly the same situation – not having a BEE Scorecard and having done little or no work on preparing a BEE Scorecard.

When it is discovered that you have not produced a scorecard again, perhaps next time your orders are placed with a competitor who does have a BEE Status. Is the pressure off – NO!





Do you have enough time to go through Verification?


Verifying your BEE Scorecard is possibly the most tiresome and stressful task you will need to go through. Your verification agency will need to meet various criteria – most are not as simple as meets the eye as some large companies discovered. Firstly you must ensure they are accredited for the scorecard you require. Collate information that they specifically need and gather the evidence so that the agency is able to verify your company. During this, the agency will ask for more data which you will need quickly to avoid a non-compliant status. Once the agency leaves, hold thumbs that they give you the level you need!

EconoBEE will be holding three “Prepare for Verification” Conferences during July 2011 in Durban (14 July), Cape Town (21 July) and Johannesburg (28 July), providing business managers / owners with vital information that will ensure that one is able to maximise one’s BEE points, avoid unnecessary delays during the verification process and ultimately take control of the verification process to ensure a correct result every time.


BEE Managed Services Saves Time
EconoBEE can assist you with your BEE Verification – our consultants will even sit in during your BEE Verification giving you the extra time to work in your business. Learn more about our managed service, contact us on  011 483 1190 or

Blow to BBE fronting

The Witness – Kavith Harrilall

THE revised Preferential Procurement Policy Framework Act, which was recently gazetted, represents a major advance for private sector companies that wish to do business with the government.

So says Keith Levenstein, CEO of broad-based black economic empowerment (B-BBEE) specialist EconoBEE, who told The Witness yesterday that the new framework takes objective criteria into consideration when evaluating the empowerment aspect of the tender-awarding process.

He described the Act as the most significant change made to the B-BBEE environment this year.

Read More…

State moves to close the door on fronting

Andile Ntingi – City Press

Government is planning to amend BEE legislation to clamp down on fronting, which gives companies that misrepresent their empowerment credentials a competitive edge over their rivals when bidding for lucrative state tenders.

Lionel October, the director-general of the Department of Trade and Industry (DTI), told City Press that consultations were currently taking place among government departments to devise solutions that would eliminate loopholes in the BEE Act.

The act was introduced in 2003 to transfer a larger share of South Africa’s economic wealth from whites into the hands of black people.

However, fronting has been blamed for slowing the pace of ­deracialising the economy and hampering efforts to create a larger pool of wealthy black entrepreneurs.

October said: “We are going to make changes to the BEE Act and the BEE codes of good practice to prohibit fronting. We are going to define categories of offences in the act that amount to fronting.

“After we have made fronting explicit in the act, we will set up a special investigations unit to deal with fronting because it is fraud.”

He said government was also mulling establishing a BEE ombudsman to investigate complaints and make rulings.

“The ombudsman will investigate complaints around BEE where people have been unfairly treated.

Read More…

SABMiller shows how BEE model should work

Mpho Sibanyoni – The City Press

The latest figures for SABMiller not only show growth but also reflect a broad-based empowerment model worthy of following, the group managing director and analysts agree.

The soft drinks and liquor producer announced this week that the black liquor traders who had each invested at least R100 in the SABMiller BEE transaction, Zenzele, would receive R39.3 million in dividends.

SABMiller employees, who received the shares for free, received R38.9 million in dividends while R17.2 million went to The SAB Foundation.

SAB managing director Norman Adami said each black liquor trader who had invested R100 would get R600.

“The Zenzele scheme is meaningful to our BBBEE shareholders because we structured it to benefit many people instead of the usual suspects or politically connected individuals,” said Adami.





Expert Advice pays for itself
Save time and effort by allowing EconoBEE, Experts in BEE Compliance and scorecard optimisation handle all of your BEE requirements. Contact us on  011 483 1190 or

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While there is demand for a B-BBEE Scorecard someone will be taking advantage, shouldn’t that someone be you…

Want us to manage your BEE Process – simple 10 steps to BEE Compliance.

Use our pre-prepared “Verification Ready” documents and templates in your business – contact us for more.

Turnover below R5 million – find out how to get your BEE Exemption.

Is BEE procurement a pain? Sort it out quick and easy – click here.

EconoBEE Newsletter
15 June 2011

In this issue

  • Is your BEE Pressure Off – Not likely!
  • Do you have enough time to go through Verification?
  • Blow to BBE fronting
  • State moves to close the door on fronting
  • SABMiller shows how BEE model should work

In other news

About EconoBEE

EconoBEE is an expert BEE consultancy. EconoBEE helps businesses Become BEE Compliant, prepare for verification, earn maximum BEE Points and ensure that they achieve the BEE Level they need to get more business.

Our services include BEE Management Systems, Training, EME Pack, Complete Managed Services; consulting and advisory and Procurement Solutions.

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BEE Points = Happy Customers = Sustainable Business

Gavin and the EconoBEE Team

Executive summary of B-BBEE

Turnover below R5 million per annum – automatic BEE status

Turnover above R5 million per annum – you need a BEE Scorecard. Our workshops, scorecard tools, procurement manager or a complete managed services will be best for you.

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Government tenders will use your BEE status to award business – the higher your points the better chance of winning the business.

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