BEE Scorecard, Quick and Easy – EconoBEE Newsletter – 04 August 2011

EconoBEE - BEE Points = Business
How to get a BEE scorecard, Quick and Easy without the pitfalls

The process

The BEE scorecard is designed to be broad based. This implies that it goes through multiple aspects of your business. You can earn points in any/all of the seven elements. The elements include;

Ownership – this measures the percentage of shares in the business that are owned by black people
Management – the directors and top management of the business
Employment equity – the employees in the business
Skills development – this measures the amount of money spent on training of black employees
Procurement – your suppliers and their scores
Enterprise Development – your spend on helping black owned enterprises
Socio-Economic Development – your spend on assisting charitable organisations

If your turnover is below R35 million then you are able to select any 4 of the above elements – under these circumstances each element is measured out of 25 points. If your turnover is below R5 million you may be exempt which means you are already BEE compliant.

The elements themselves have targets. In-order to reach a good level you need to reach these targets and earn as many points as possible.

The most common elements for a small business with a turnover below R35 million are:

Employment equity – the employees in the business
Procurement – your suppliers and their scores
Enterprise Development – your spend on helping other black owned enterprises
Socio-Economic Development – your spend on assisting charitable organisations
Skills Development is a great element to earn points if you have the training procedures in place.

The next step

An important point to make, BEE is a process. You should therefore look at your past years’ data to see what you have done thus far. Then look at your future years’ data to see what you can do to earn extra points. Your clients typically want a good score rather than just a score. Calculate your scorecard internally before looking for a verification agency.

When you have earned the points you need you should have it audited by an accredited verification agency. Before appointing the agency make sure you interview them to ensure your interpretations are the same as theirs. Slight adjustments can save you hours of time and often earn you more points.

Getting help

BEE verification agencies are not allowed by SANAS regulations to assist companies by consulting to them. We have prepared various crash courses to help implement BEE. They are all available on our website – please email info@econobee.co.za to request a link.

Through EconoBEE’s managed service we will assist you in streamlining the process, speeding up implementation and improving your overall BEE status. Before embarking on any BEE project give our expert consultants a call at 011 483 1190 or visit http://www.econobee.co.za/.


Mining Act harms true transformation

The mining industry has its own difficulties in complying with the mining act. There is no B-BBEE charter to follow, but the Mining Act has set out certain requirements, and caused confusion by creating a document called “The Broad-Based Socio-Economic Empowerment Charter for the South African Mining and Minerals Industry”. (B-BSEE)

This charter has nothing to do with the B-BBEE act and codes, and is also contradictory, and as a result causes confusion and less compliance.
In addition to apportioning blame at the feet of the DMR, the mining houses themselves are to blame to a large extent.

Many businesses who supply to the mining industry are already B-BBEE compliant. They have a scorecard and have had it verified. As soon as they try to do business with a mining house, the rules sometimes change, almost depending on which procurement officer handles the case. Some mining houses do follow B-BBEE requirements, e.g. by demanding a minimum of level 4. Others will insist on their supplier showing 25% plus 1 vote on their shareholding. The supplier may be in the ICT industry, services, logisitics or mining supplies – the mining house will absolutely insist on this ownership. These suppliers are not mines and have followed the only act that applies to them – the B-BBEE Codes. In terms of B-BBEE a company can reach level 1, without even the need for black ownership (if it is a QSE). An EME does not need any more than a letter/certificate from an accountant/verification agency to reach level 4. These companies have made the effort to become compliant, and now due to misinterpretation by mines are denied business. Even TELKOM and ESKOM are not as rigid.

The actual B-BSEE charter does not have a scorecard in the same sense as B-BBEE, but does have certain targets. It must be noted that the mining house depends on its continued mining license to reach those targets.

One of the targets is to “achieve a minimum target of 26 percent ownership to obtain meaningful economic participation of HDSA by 2014”. Effectively the target is for the mine to have 26% black ownership by 2014 – 2.5 years from now.

Another target is “procure a minimum of 40% of capital goods” and “procure 70% of services and 50% of consumer goods from BEE entities by 2014”
The definition of a BEE entity is not one with a good B-BBEE score, but one with a minimum of 25% plus 1 vote. This implies that for those suppliers to mining houses, the excellent B-BBEE scorecard must be discarded in favour of an out of date and discredited narrow-based ownership.
The mining houses, understandably want to guarantee their licenses so they are putting huge pressure onto their suppliers. Some are quietly bluntly stating that unless the company is 25% plus one vote black owned it will not do business with them. We have even heard of mining companies demanding 50% black ownership.

We have always campaigned for fairness and consistency. It seems downright unfair that a mining house that itself is not yet 25% black owned (they have until 2014 to achieve this milestone) is requiring more of its suppliers than it can achieve itself. This is contrary to the aims of transformation, and is quite a de-motivating factor in many companies’ BEE activities.

The fault obviously lies with the department of mineral resources for creating a contradictory charter. It also lies with the mining houses that are putting a bigger onus on their suppliers than is needed right now. The losers are the many companies that supply to the mining industry. A bigger loser is the B-BBEE codes – after all if your company supplies exclusively to the mining house, why bother to follow the codes to get a good scorecard if your customer is not asking for your good B-BBEE scorecard. The biggest loser is empowerment and transformation, and the B-BBEE scorecard.

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 info@econobee.co.za.


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 info@econobee.co.za.

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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
04 August 2011

In this issue

  • How to get a BEE scorecard, Quick and Easy without the pitfalls
  • Mining Act harms true transformation

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.

As leaders in the industry we are driven to help maintain and develop knowledge in the BEE industry.


Already have a BEE Certificate?

Please send it to us and we will include it in our BEE Procured database.


Contact Us

Tel: 011 483 1190
Fax: 011 483 1195
Email: info@econobee.co.za
Web: www.econobee.co.za


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Regards
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.

Complete Managed BEE Service

Tip:

You could be more compliant then you realise – contact us and we will show you.

10 Strategic Steps to B-BBEE!

We have prepared an easy to follow guide “B-BBEE in 5 Minutes” and “Crash Course to BEE Verification” which explains BEE in a simple step by step approach.

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