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Overview to the new codes – EconoBEE Newsletter – 25 September 2013

EconoBEE - BEE Points = Business


Overview to the new codes

The minister announced draft codes in October 2012. The intention is to replace/refine the existing codes of good practice. Those draft codes caused lots of consternation: Some of the recommendations were unsustainable or infeasible:

  • Importers who struggled to become compliant.
  • Businesses without ownership stood to drop two levels.
  • Issues around QSEs, sector codes were not addressed.
  • Value Adding status incorrectly defined.

The minister invited submissions and we and over 500 organisations, including many clients whom we advised, gave proper and competent submissions. The objective has always been to create a sustainable set of codes that help, and not hinder transformation.

The dti has taken note of the comments, and held a report-back session in March.


Moving forward
The next stage of the revised codes (now dubbed the refined codes) is going to be held in the form of a B-BBEE summit in early October 2013. We are anticipating the minister issuing these codes during that session or very shortly thereafter as a formal gazette. Last year a similar event was held where the revised codes were announced but were issued a few days later. The DTI simply offered a presentation giving insight into the soon to be gazetted codes.

In terms of the act, the minister must gazette any proposed change in line with section 9 (5) of the B-BBEE act. Thereafter, and taking into account public submissions, he has the right to gazette the changes in terms of section 9 (1) of the act.

Once this is done, it will explain when the changes will come into effect. The dti has not announced if the minister will follow the 9 (1) route, or issue the proposals as 9 (5) and request further submssions.

Some of the issues we expect to be cleared up include:

  • Verification issues around the new codes
  • Interpretive issues – in line with the about to be signed B-BBEE Amendment Act.
  • Sector codes
  • Application date for the new codes

Either way, whatever is gazetted will have far reaching repercussions. You simply have to be first to know about the changes. We will be hosting a series of seminars to help companies understand what the new legislation entails, strategies to implement it without dropping a level and begin creating interpretations for companies to follow.

Date:We have provisionally booked
17th October – JHB
25th October – CPT
1st November – DBN
We will be hosting additional events based on demand
Time:8:30 for 9:00 – 17:00
Price:R2500 excl VAT (R2850 incl VAT)
Booking Details:Email info@econobee.co.za
Contact 011 483 1190
Book online or download our brochure.



EconoBEE is an independent organisation. We do not endorse the dti, nor do they endorse us or support us in any way. We support transformation, the B-BBEE Act and the B-BBEE Strategy. EconoBEE is a B-BBEE Consultancy. We assist our clients, but in line with the codes, as consultants we do not issue BEE certificates, just as a BEE Verification Agency, or IRBA Approved B-BBEE Auditor may not consult. EconoBEE offers fully managed consulting service to its clients.



Start preparing now, we are on your side – Managed Service.



How to unsend a certificate?

Yes, I know it is grammatically incorrect, but the issue is important. Many BEE certificates are produced every day. While most have no problem, there are some, about 5%, that are incorrect.

In the past week we have come across 5 certificates, issued by accredited verification agencies or approved auditors that required us to call the agency to query the certificate. For example, some certificates for guesthouses state that they are EMEs in line with the codes of good practice with a turnover of less than R5 million. Since a guesthouse is in the tourism sector, it can only be an EME if their turnover is less than R2.5 million. In one case, upon checking the auditors then apologized and sent us an updated certificate within 5 minutes.

This satisfied ourselves so that when our client, (who is a customer of the guesthouse) who is about to be verified will be able to supply a correct and valid certificate to their verification agency. We know that if an incorrect certificate is supplied as part of your procurement calculation you will have points deducted. The problem we have is the auditor sent only us the updated certificate. We don’t know if the auditor even sent his own client, the guesthouse, an updated certificate, or if the guesthouse sent the updated certificate to their other clients who rely on the certificate. Some company may well get a big surprise if they use the wrong certificate during verification and lose points.

In another instance the auditor made a mistake and verified a game lodge as an EME when it should have been a QSE. They sent us a letter stating that they had told the lodge that the certificate was invalid and must be withdrawn. Is this enough?

  • What confidence do we have that the lodge is going to withdraw the certificate, and that they will inform every client who relies on the certificate that it is incorrect?
  • Does the lodge even know who they have sent this certificate to in the past four months since it was issued?
  • What if the certificate was on the lodge’s website and had been downloaded an unknown number of times
  • How do we know that the companies who received that notification are indeed going to disregard it during their verification? They are going to lose points by disregarding the certificate
    • If you, their customer, received the original certificate and now receive a letter telling you to disregard the original certificate, do you have the systems to reject the old one?
  • The letter informing me of the withdrawal was not sent to the dti, SANAS, or IRBA or to every agency, auditor informing them of the withdrawal. Even if it had been sent to every agency, do they have the facilities to reject invalid certificates?

The dti is busy with a project to put all certificates into a database. They have about 20 000 certificates (compared to our 40 000), but those certificates are being scanned and processed by OCR. They therefore don’t have the facilities to check certificates, or reject them (like we do). Unless agencies and auditors send updated certificates to the dti, the database will not be able to take this into account, and the project will fail.

The question remains: Once a certificate has been sent, how do we withdraw it, remove it and ensure that it is never used again. In short how do we unsend a certificate?



The Value of Subscribing to Employment Equity

The DOL (Department of Labour) hosted a workshop on Thurs 6 Sept 2013 to discuss the implementation of amendments to the Employment Equity Act.
As designated employers we need to respond in a positive manner and not merely because of the punitive measures that will result because of non-compliance.
The implementation of the Act has an impact on the labour market. AND we need to change our mind-set and embrace it because the Act is not unreasonable.
The youth in this country are unemployed and this represents a disaster waiting to happen.  We also need to provide employment for people with disabilities as the Act affords them the opportunity to be gainfully employed.

By introducing equity in the work place through the implementation of the Act we can make a positive contribution to the economy and to the life of our business.
Herewith a few pertinent issues that will have impact on employers going forward.

  • All designated employers have to submit Equity Plans on an annual basis.
  • The amendments have been approved in principle and will be signed off in Parliament.
  • Despite concerns that were tabled by business, Government is adamant that no arbitration measures will be put in place for those guilty of non-compliance.
  • Inspections are already underway and the punitive measures are harsh.
  • CEO’s of companies who are deemed to be in contravention of the Act will be hauled before the labour court.
  • Fines will be commensurate with the severity of the contravention.  The value of the fine could represent anything from 2% – 10% of total turnover.
  • Contraventions are various but could be identified as:
    • The absence of an EE forum or the lack of an EE plan.
    • Instances where junior staff members are appointed as responsible for the implementation of EE.   This is the responsibility of Top Management.
    • Submission dates are not adhered to.
    • Submission of inaccurate and incorrect data on the reports is a common problem.
    • Evidence exists that reports are merely submitted because it is a requirement and are not intended to be implemented for business purposes.

Please note the following critical dates:

  • Manual submissions close on 1 Oct 2013
  • Electronic submissions close on 15 Jan 2014

For further information and assistance contact Jenny O’Connor on (011) 888 -7805, 083 308-1577 or jenny@computerfundamentals.co.za.


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EconoBEE Newsletter
 25 September 2013

In this issue

  • Overview to the new codes
  • How to unsend a certificate?
  • The Value of Subscribing to Employment Equity

In other news

About EconoBEE

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