EconoBEE Newsletter – BEE – Back to Basics

EconoBEE – Newsletter February 2009
Helping you and the Economy Grow

How big is your business?

Turnover below R5 million

You have an easy job – All businesses with a turnover below R5 million per annum do not need to produce a BEE Scorecard, they are exempt.

EconoBEE’s EME Pack is the ideal long term solution for your business.

Turnover between R5 and R35 million

You need to produce a BEE Scorecard but fortunately you only need to comply with 4 of the 7 elements. This makes your job much easier and will take less time.

EconoBEE V3 is a fantastic BEE Self rating tool. In addition a short workshop is all you need to get going!

Turnover above R35 million

Don’t panic! You might be the biggest type of company who needs a scorecard but with the right advice you can get your very own scorecard with minimal effort.

You need a combination of EconoBEE V3, workshops and EconoLog, implemented properly using our 10 Steps to BEE Approach.

B-BBEE (Broad-Based Black Economic Empowerment)

Produce a BEE scorecard for your Business

Published in the BBQ Scorecard Magazine – Dec/Jan/Feb edition
by Gavin Levenstein and Keith Levenstein

The basics of B-BBEE

Where does BEE come from?

A short background to BEE (Black Economic Empowerment) or more precisely B-BBEE (Broad-Based Black Economic Empowerment), is a government policy aimed at increasing black participation in SA businesses. BBBEE started its journey in 2003 with the Broad Based Black Economic Empowerment Act (the act was gazetted in January 2004).

Before 2004, the concept and the idea existed, but we did not have any methodology for companies to measure and implement it.

The Department of Trade and Industry started work on the Codes of Good Practice. Draft Codes of Good Practice were approved. These Codes gave companies a way of implementing BEE objectively. Companies needed to produce a scorecard. This scorecard was used to gauge the compliance level of a company. Companies earned points by doing various business activities- including Skills Development and CSI (now Social Development).

Fast forward to Feb 2007 – after three years of hard work and many hours of analysis, listening to comments, making changes etc., the Codes of Good Practice were gazetted on 9th February 2007 (gazette no. 29617).

The 7 elements and the Scorecard

The BEE Codes of Good Practice have multiple elements for companies to comply with thus making BEE Broad Based. As a company complies with more of the elements their score will slowly increase.

Within the BEE codes there are two types of companies that need a scorecard and a third that is exempt from filling in a scorecard.

Type of Company

Annual Turnover Threshold

EME (Exempt Micro Enterprise)

Below R5 million

QSE (Qualifying Small Enterprise)

Between R5 million & R35 million

Generic

Greater than R35 million

EME (Exempt Micro Enterprise) – a company that has an annual turnover of less than R5 million. These companies are automatically compliant and are given a BEE score of 65 points (level 4) or if majority black owned, a score of 75 points (level 3).

QSE (Qualifying Small Enterprise) – an enterprise with an annual turnover of between R5 million and R35 million. QSE’s will need to fill in a scorecard, but must choose only 4 of the 7 elements.

Generic – all companies with an annual turnover above R35 million per annum. They need to comply with all 7 elements of broad based black economic empowerment.

The seven elements:

Ownership – Who owns the business?
Management – The senior/executive management of a business.
Employment Equity – The employees of the business.
Skills Development – The amount of money spent on training/developing employees.
Preferential Procurement – Total spend on BBBEE compliant suppliers.
Enterprise Development – Assisting small black owned businesses to grow.
Socio-economic Development – Charity spend towards black people.

The seven elements together make BEE broad based. To get a good score you need to earn points in each of the elements. As you can see from the scorecards below if you do well in only one element you will not get a very good score.

The QSE Scorecard

Component

Element

Points Available

Direct Empowerment

Ownership

25

 

Management

25

Human Resources

Employment Equity

25

 

Skills Development

25

Indirect Empowerment

Preferential Procurement

25

 

Enterprise Development

25

Residual

Corporate Social Investment

25

Total

 

175/100

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Read more…

BEE Points = Business

That’s it for the time being.
Regards

Keith and the EconoBEE Team

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