Original publish date – Wed, 18 Jul 2012 15:13:05 +0000, Keith

The dti has issued a document clarifying the effective dates of government notices.

This is a very welcome move. The purpose of the document is to explain which sector code a company must follow and from which date if the sector code is newly released. The signatory is Nomonde Mesatywa, the chief director in the BEE Unit.

Recently two new sector codes have been gazetted – the Property Charter and the ICT Charter. Both state that the sector code is effective as from the date of the gazette.

The clarification statement explains that if a company falls within the sector code it must apply that code as from the date of publishing of the sector code. The date of publishing refers not to the date that the minister signed the notice (which is generally some weeks prior to publishing), but the date of publishing of the gazette. In the case of the ICT Sector code, this is 6th June 2012. A problem that cropped up is a company may have been half-way through its verification using the Codes of Good Practice when the ICT sector code was gazetted. The question we asked was must the verification agency redo the verification because the date of issue on the certificate would be after the date of gazetting of the sector code. The dti’s statement also clarifies this. It says that any verification that  was begun, i.e applied for verification, prior to the gazetting of the sector code would use the Codes of Good Practice, whereas a verification applied for after the sector codes were gazetted would need to follow the sector code.

Our comments:

We are very happy that the dti issued a statement so soon after the issue was raised. It completely explains to everyone if a sector code should be followed or  the Codes, and there is no room for misinterpretation. We applaud the chief director for clarifying an issue that does affect a fair number of companies. We recognise that the chief director has no discretion over the actual sector codes and is unable to vary it by for example adding in a transitional period as some are requesting. We sincerely request the BEE Unit to issue more clarification statements of this nature. It will instantly solve most the the problems we have seen with interpretations.

We would recommend that all verification agencies or approved auditors that are affected,i.e who were busy with the verification of a property company or ICT company prior to the gazette include a statement on the certificate as follows:

“Please note that (insert company name) falls within the (ICT Sector/Property sector). The verification agreement was signed prior to the gazetting of the (ICT/Property sector code) and the company was verified in terms of the Codes of Good Practice. This makes their certificate valid”

This will ensure there is no confusion in for example 6 months time when the company’s B-BBEE certificate is scrutinized and a query raised that the certificate was only issued on say 1st July 2012, but not following the relevant sector code. If the disclaimer as suggested is not on the certificate, the company runs the risk that someone will see that the wrong sector code was used and disqualify the certificate. This is especially important if the company is tendering for business, and they do not have the opportunity of explaining why their certificate appears to be incorrect when it is actually entirely valid.