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{tab What is BEE?}

BEE, or more accurately B-BBEE refers to Broad Based Black Economic Empowerment is a policy of the SA government which encourages companies to help transform the country. BEE is about broad-based activities that benefit black people.

{slide Black People}

Definition: Black means African black, coloured or Indian people who ARE South African citizens by birth or became a South African citizen before 27th April 1994.

NB the definition of coloured now also includes Chinese

{/slide}

BEE compliance is measured by means of a scorecard (a broad based scorecard). The scorecard is based on various elements and your company is measured out of a maximum of 100 points (in some cases it is possible to obtain more than 100 points).

The BEE Codes of Good Practice is a government document that describes how the scorecard works.

The elements on which you are rated is what make BEE broad-based. It covers various aspects of the economy, society and the company.

{slide The five elements}

  1. Ownership – this measures the percentage of shares in the business that are owned by black people (as per the definition above)
  2. Management Control – the directors, top management and the employees in the business
  3. Skills development – this measures the amount of money spent of training of black employees
  4. Enterprise and Supplier development – Procurement (your suppliers and their scores) and Development – your spend on helping other black owned enterprises grow, both suppliers to you and non suppliers.
  5. Socio-Economic Development – your spend on assisting charitable organisations

{/slide}

Once you have calculated a score it gets converted to a LEVEL – so we talk about level 8 or level 7 up to level 1 companies.

{slide Points to Levels Conversion}

PointsLevel
Above 100 pointsLevel 1
95-100 PointsLevel 2
90-95 PointsLevel 3
80-90 PointsLevel 4
75-80 PointsLevel 5
70-75 PointsLevel 6
55-70 PointsLevel 7
40-55 PointsLevel 8
Less than 30 PointsNon-compliant

{/slide}
{slide Types of Companies}

The codes define three types of companies;

EME below R10 million
EME – exempt micro enterprise – a company that has an annual turnover of less than R10 million. These companies are automatically given a BEE score of 65 points (level 4), and if majority black owned, level 2 and if 100% black owned, level 1

QSE between R10 million and R50 million
QSE – Qualifying Small Enterprise – an enterprise with an annual turnover of between R10 million and R50 million. The QSE will need to fill in a scorecard, and must choose all 5 elements not 4 of the 7 elements.

Generic above R50 million
Generic – all companies with a turnover above R50 million per annum. They need to comply with the seven elements of broad based black economic empowerment.
{/slide}

{tab The BEE Scorecards}

An EME does not need a scorecard. They are automatically allocated a good BEE score. They are allocated a level 4, or level 3 if they are black owned.

A QSE does need a scorecard, but they must choose only four of the seven elements, this gives a QSE a simpler/easier scorecard to comply with.

{slide The QSE Scorecard}

In brief, the QSE scorecard has the following components and points available:

ComponentElementPoints Available
Direct EmpowermentOwnership25
Management25
Human ResourcesEmployment Equity25
Skills Development25
Indirect EmpowermentPreferential Procurement25
Enterprise Development25
ResidualCorporate Social Investment25
Total175/100

Broad-Based Black Economic empowerment emphasises all aspects of business and society. Each element is worth 25 points on the scorecard. As a QSE (Qualifying Small Enterprise) you can select any four of the seven elements.

{/slide}

The Generic Scorecard is the scorecard that all other companies should follow. It makes use of all seven elements.

{slide The Generic Scorecard}

In brief, the generic scorecard has the following components and points available:

ComponentElementPoints Available
Direct EmpowermentOwnership20
Management10
Human ResourcesEmployment Equity15
Skills Development15
Indirect EmpowermentPreferential Procurement20
Enterprise Development15
ResidualCorporate Social Investment5
Total100

Notes:
Broad-Based Black Economic empowerment emphasises all aspects of business and society. Each element is worth between 5 and 20 points on the scorecard. In order to maximise your points, you will need to try to comply with all seven elements.

{/slide}

{tab Becoming BEE compliant}

Becoming BEE compliant or getting a certificate or getting registered implies calculating and producing a scorecard (a broad based BEE scorecard). It is no use saying “We are BEE” – that does not count – even if your business has taken some of the actions and begun meeting some of the targets. “Becoming BEE” is only about the points/level you have earned and producing a scorecard to certify this.

The process is to identify which scorecard you need to follow, identify the steps you have taken to meet targets, calculate your score, and collect the documentation and evidence to prove that score. Thereafter it is a good idea, though not mandatory, to get that scorecard independently verified, by your auditor, or even a verification agency.

{slide The Truth about Verification}

  1. There are currently no accredited verification agencies.
  2. It is not mandatory to use a verification agency, though it does ad credibility to your scorecard.
  3. The verification agency is not allowed to consult to you. Their only job is to verify the accuracy of the information presented to them.
  4. If you do not have accurate evidence you will earn no points!

{/slide}

The best way to become compliant is to regard BEE as a process and not a one-time event. That way you will always be up to date with your information and never have that “last minute rush” to obtain your scorecard.

{slide The EconoBEE 10 Step Process to BEE compliancy}

  1. Learn about BEE
  2. Look at where BEE is likely to affect you
  3. Look at the indicators to find ways of scoring points
  4. Collect documents around the indicators where points can be scored
  5. Do an initial calculation to find out how many points you have achieved
  6. Design your BEE report, Scorecard, Profiles, policies and Strategies around BEE and display your scorecard level
  7. Spend time and effort and earn the points
  8. Do a final self rating – must be signed once you are completely happy with it
  9. Look for ways to find more points on the scorecard
  10. Not mandatory – get an independent organisation to sign off your scorecard (Auditors or Rating Agencies)

We can help you with all aspects of the 10 step process. Although we are not a verification agency, we will happily recommend one once you are ready and want a verification.

{/slide}
{/tabs}

{tab Why a BEE Scorecard}
To earn BEE points on Preferential Procurement a company needs to ask it’s suppliers for their BEE scorecard.

In short one company
will ask another
company for their scorecard
until all companies have a BEE scorecard of their own.
{slide What happens if you don’t have a scorecard}
The only direct reason you will need a scorecard is because your customers are asking for one. If you don’t respond you will not be penalised legally but rather potentially not get the business you desire.

A Scorecard = business
Non Compliance = less business/no business.

{/slide}
{tab How Long does it take?}
B-BBEE is a 10 year process. Any companies wanting to produce a scorecard must realise that the targets are not meant to be reached today, it is a process that should take 10 years. The idea is to get a score and over a period of time improve it.

Remember – BEE and becoming BEE compliant is a long term goal, you can’t become BEE compliant instantly. You need to prepare and work on the scorecard. When you are ready, becoming BEE compliant will become part of the daily running of your business.

{tab The BEE Calculations}

The calculations are simple – in each instance you have an indicator. The indicator will have a target and a points available – you need to try and reach the target to earn the points.

{slide Calculation Example}
EG Socio-economic Development

Goal – spend 1% NPAT of SED to black people
Target 1% NPAT
Points 5

If you spend 0.5% you will earn 0.5/1% NPAT * 5 points = 2.5
{/slide}

{tab FAQ’s}

{slide Q) Do I need to sell shares to black people to become compliant?}
A) No, if that is all you do you will be non compliant. The scorecard is broad based. This means you need to do other projects to do well on your scorecard.{/slide}

{slide Q) What penalties do I have if I do not comply?}
A) You will not get fined or go to jail if you do not comply. You simply run a risk of not getting the business you desire.{/slide}

{slide Q) Where can I register for BEE?}
A) BEE does not have a registration process. You comply by producing a BBBEE Scorecard. The scorecard will allow you to earn points which inturn will help your customers calculate their own BEE scorecard. Once you have produced a scorecard you can advertise that rating. This may require a registration of a directory which will only happen after you have produced the BEE scorecard.{/slide}

{slide Q) How many points do I need?}
A) As many as your customers need or more than your competition. It depends on your requirements, some industries will need a very high score while others may not even ever need a BEE scorecard. Also note that it takes times to get a good BEE Scorecard. We estimate that the current average score in the marketplace is less than 40 points.{/slide}

{slide Q) I need a rating – what do I do?}
A) The rating is the last step, if you have prepared all your documentation and have earned enough points to get to the level that you require then contact a rating agency – we are consultants, we can however refer you to a verification agency. If you are starting this process then you need to prepare first. Start with a training session, then prepare your own internal scorecard, earn your points, collect documentation and then start the verification process.{/slide}

{slide Q) How long does it take – I need this by Monday?}
A) If you want a very quick scorecard, you can, but you will not earn any points on it. A scorecard can take some time to prepare. We suggest that you start with understanding BEE, then produce an internal scorecard.{/slide}

{/tabs}

Find out what is best for your company!

{slide My Turnover is below R5 million per annum}

You qualify as an Exempt Micro Enterprise – EME. EME’s are exempt from BEE.

What does this mean to you – EME’s are automatically allocated a good BEE score. You will qualify as BEE compliant (minimum level 4) simply by having a turnover below R5 million.

The proof for an EME is very simple, we can also assist EME’s to draw up the correct documentation. If you are below R5 million our EME Pack will be ideal for your business.
{/slide}
{slide My Turnover is above R5 million per annum}
You qualify as an Qualifying Small Enterprise or a Generic Company
{tab QSE}QSE’s need to produce a Broad Based BEE scorecard. They have a simplified scorecard – they can choose any 4 of the 7 available elements. A QSE has a turnover between R5million and R35million.
{tab Generic company} Generic companies comply with all seven elements
What does this mean to you – QSE’s have an easier scorecard. The do not need to score points in all 7 elements to earn 100 points. In comparison a QSE will earn twice the number of points a generic can by doing exactly the elements.
{/tabs}
When a company creates a scorecard they are going to need to understand the BEE scorecard, document their activities and promote their BEE status to their customers. Ideally a company needs a basic understanding of BEE, critically they will be able to create their own scorecard in preparation for a rating and they will be able to earn additional points by targeting points that are related to their business.

We present short half day courses as well as full day courses on topics around BEE and the implementation/understanding of BEE compliance. In addition we have extremely useful tools to prepare a self assessment or manage the documentation.
{/slide}

What we can do to help you

{tab What we do}
EconoBEE is a specialist BEE compliance company. We assist companies with BEE compliance.

Our services include advisory consulting, training, self assessments and documentation logging
{tab EME}
EME Pack – a very quick and easy solution for EME’s. We will prepare an Exemption Statement, BBBEE Policy and a statement to customers. In addition we will supply you with various reference documents to help you understand more about BEE.
{tab Scorecards}
We have multiple solutions to producing a BEE scorecard. Our very simple and cost effective solution is EconoBEE Scorecard.

EconoBEE Scorecard is a very straight forward, simple and easy to use self assessment rating tool. It will produce a BEE scorecard in minutes and help you understand an improve on your scorecard.

EconoLog/10 Steps to BEE – advanced service. We will actively help you prepare your BEE scorecard. We assist with documentation, advice, training etc to make sure you have all the required tools at your disposal to make BEE compliance wok for your business.
{tab Ratings}
We are very well positioned to help you secure your BEE scorecard rating. We can assist you with all the requirements and even help you find a Verification Agency.
{tab Other}
As an experienced BEE compliance company we are able to assist you with any BEE related query. We have built up many associations with companies to assist us in giving the most comprehensive BEE service possible. Contact us to find out more!
{/tabs}