BEE in the know

B-BBEE sector scorecards to be repealed

Jenni Lawrence Jenni Lawrence

On the 5th May 2015, the dti gazetted a notice wherein the minister announced an extension for the B-BBEE sectors to align their scorecards to the amended codes.

The B-BBEE Act 53 of 2003 made provision for different industry sectors to compile their own B-BBEE scorecards, with the intention of speeding up transformation in those sectors. E.g. in the Information Communication & Technology (ICT) sector, ED and SED contributions are specifically required to be ICT related or for ICT related beneficiaries.

It also allowed sectors to make slight amendments to areas where they may have had difficulty fulfilling some requirements. In the construction charter for example, the target for disabled people was limited to those who were office based, due to the sometimes challenging nature of working on construction sites, for certain categories of disabled people.

The amended codes came into effect for the general scorecard on 1 May 2015 – for those industries that have no specific sector scorecard. The extension was granted to sector councils, in order to allow them extra time to consult with the stakeholders in their sectors, and have their submissions gazetted for public comment before issuing by 30 October 2015.

To date only the tourism sector has successfully completed the process, with a new sector being gazetted for the Marketing, Advertising and Communications (MAC) sector.

In the notice of 5th May, the minister indicated that for any sectors which had not been aligned by 30th October “consideration” would be made for them to be repealed.

If this were to happen, construction, accountancy (CA), transport, AgriBEE, forestry, ICT, property, and finance sector scorecards are likely to be repealed.

The dti has now issued a media release confirming that the Sector codes will be repealed, if not submitted to the dti “for approval” by 15th November 2015.

It is interesting to note that the minister is not saying that the sectors need to have been approved or gazetted for comment in order to avoid being repealed, but simply that they must have been submitted to the dti. If we look back at previous sectors submitted, we see that some have been submitted and in draft for up to 7 years before being approved and gazetted. e.g the Marketing Advertising & Communication (MAC) charter was gazetted as a charter in August 2008, but was never gazetted as an applicable scorecard under the 2007 codes of good practice. Ironically, they were one of the first to submit and have they scorecard gazetted for comment under the amended codes of 2013.

The media release:

"Repeal of Sector Codes Not Aligned to the Amended Codes

Sector Charter Councils have until the 15 November 2015 to submit aligned Sector Codes for approval to Minister of Trade and Industry, Dr Rob Davies.

All existing Sector Codes that have not submitted application for approval to the Minister to be aligned with Broad-Based Black Economic Empowerment Codes of Good Practice will be repealed.

Once sector codes are repealed, entities operating in the affected sectors will use the Amended B-BBEE Codes of Good Practice for measurement.

The background to this action by Minister Davies is that on 15 May 2015, all the existing Sector Codes which were not aligned to the Amended Broad Based Black Economic Empowerment (B-BBEE) Codes of Good Practice were given further extension to complete the alignment process by 30 October 2015. The extension was given through a Notice, Government Gazette Number 38799, which further stated that a consideration shall be made to repealing those sector codes that are not aligned and ready for gazetting by 30 October 2015.

Sidwell Medupe-Departmental Spokesperson
Tel: (012) 394 1650
Mobile: 079 492 1774
Issued by: The Department of Trade and Industry"

What does this mean for you?

If your company falls under a sector scorecard which has not yet submitted a draft for approval to the dti, they have just less than 2 weeks to do so. Failure to do this could result in the sector scorecard being repealed. If this were to happen you would immediately fall under the general amended codes scorecard, which is more onerous for most businesses.

When will this affect me?

Companies who currently fall under the general scorecard aligned to the amended codes are required to be measured under the amended codes if their financial period ends after 30 April 2015.

We await further clarification from the dti, as to whether any consideration will be given to any repealed sector scorecards for an extension on this applicability.