The revised B-BBEE codes were issued as a draft on 5th October 2012. At the time the QSE codes were not included. The dti kept saying that the QSE draft codes would be released shortly. In October 2013 the dti released the final amended codes, again without the QSE codes.
The October 2013 codes gave a transitional period of 1 year before the amended codes would come into affect.
In March 2014, the minister extended the transitional period by a further 6 months to 1st May 2015. This means that by May 2015 generic companies would have had knowledge of the drafts for nearly 3 years, and the final codes for 18 months before having to implement them. No generic should be able to say they did not have eough time to react.
QSEs – small businesses – on the other hand have been treated very poorly. By their nature QSEs are small, often under work pressure without the sklls to manage large swathes of legislation. QSEs are very important in our economy. Many generics started out as small businesses. QSEs are the engine of the economy that employs people. This is why there is now a ministry for small business development.
As important as BEE is to the country, so is every small business. If we kill small business, we close down the economy.
QSEs did know that there was going to be changes to the codes but they did not have any detail. The amended codes of 2013 did indeed give some inkling of some of the rules around QSEs. QSEs that are at least 51% black owned did have certainty, but any other QSE with less than 51% black ownership had very little idea of what the codes were going to say. Our research shows that this will affect 83% of all QSEs – the remaining 17% being 51% or more black owned that will be automatically level 2 or level 1. As an aside this is an interesting statistic – only 17% of QSEs are black owned which certainly justifies the need for more transformation.
On the 10th October 2014, more than 2 years after the draft generic codes were issued QSEs were finally given their own codes as a draft. In 2012 generics were invited to give comments, and a 60 day commentary period was given. The dti minister obviously consulted widely read all submissions and took a year to reissue the final codes. QSEs on the other hand have been given 35 days to comment.
As shown above generics were also given 2 months to comment of the draft, then 18 months as a transitional period to 1st May 2015, after the finalisation of their codes. QSEs are already being told, that they will have no transitional period. They will be following their QSE codes as from 1st May 2015. This ignores the fact that the dti must read all submissions and reissue the codes as a final QSE code. This ignores the fact that the minister should have given 60 days of public commentary, not 35. Can we even be sure that the minister will read the public comments before steamrolling the codes into a final codes – probably sometime in February 2015, giving the long suffering QSE exactly 2 months to react before 1st May 2015?
To summarise generics had sight of the drafts 30 months prior to implementation, and final codes 18 month prior to implementation.
83% of QSEs have sight of their drafts 6 months prior to implementation and will probably only see final codes 2 months prior to implementation.
As a QSE I’m quite depressed. As a supporter of transformation I’m even more concerned that most QSEs will simply give up on B-BBEE.
As a supporter of growth in the economy, I’m terrified.