As we head towards the end of the year, it seems appropriate to look back over the successes, challenges and opportunities that 2014 brought to us in the B-BBEE realm.
October 2013 saw the gazetting of the Amended codes of good practice, which come into effect in May 2015. Because of this 2014 has seen the DTI and verification agencies embarking on massive training and education sessions, in an attempt to prepare all stakeholders for the changes to come.
Grant Thornton has run training sessions, supplier education sessions and presentations in an effort to keep our clients and partners up to date with the new requirements. Combined with this, I have written thought leadership articles for several publications and have been interviewed on TV and radio, in order to keep our clients and the wider public informed of developments.
The Amended codes herald a huge challenge to businesses, as the government aims to simplify the compliance requirements for black-owned businesses and speed up transformation across all industries. While we are still awaiting alignment of the various sector charters, the amended codes for QSEs were gazetted for comment in October this year, and reinforced the fact that white-owned businesses will bear the majority of the burden of transformation in the next phase of BEE.
While there is no doubt that the cost of BEE compliance is set to increase, it is clear that those who have started to understand and prepare for the new codes are going to be best positioned to take advantage of the opportunities that lie ahead.
The article in the link below will help you to plot a way forward for 2015. I would advise all our clients to definitely take a look at it.
We wish you a relaxing festive season and all the best for the coming year.
2015 – The good the bad and the ugly
So, what lies ahead in the New Year?
We are eagerly awaiting a number of announcements and some newly gazetted documents in 2015.
The long awaited BEE commission will have a commissioner appointed with effect from March 2015. Their role will include the investigation of complaints relating to BEE, to oversee, supervise and promote adherence to the BEE Act, to facilitate communication and cooperation between all stakeholders and to monitor progress against the BEE objectives.
The verification manual is to be published early in the New Year. This vital document will be the handbook for verification agencies, guiding us in the application and verification of companies under the new codes.
The verification industry is expecting wide spread changes, with a new accreditation body and professionalism of the industry in order to give better confidence in the results of the verification process. Grant Thornton applauds this move.
Of concern is the fact that the sector charters are not yet finalised and are likely to be gazetted with no transition period. This poses a challenge for companies who fall within one of the sectors, who will have little or no time to prepare for the changes ahead.
New sectors expected early next year include the long awaited marketing, advertising and communication charter (MAC) and a new charter for events companies.
What should you do?
If your company relies on BEE for tenders, licenses, DTI incentives or grants, it is vitally important that you communicate with the relevant parties to understand what they will expect of your company in order to retain these opportunities.
Be realistic. When the current codes came out in 2007, the average score was non-complaint or at the lowest level, level 8. It has taken 6 years for the average score to increase to a level 4. Expect your score to drop significantly and understand how your competitors will be affected.
Many of our clients have already asked us to prepare indicative scorecards based on the new codes in an effort to prepare their own gap analysis.
It is highly advisable to book your verification well prior to 1 May 2015, in order to buy you some time with a valid scorecard under the current codes. This gives you more opportunity to align your internal BEE efforts to the requirements of the amended codes.
Next year looks set to be a year of new challenges and opportunities. We at Grant Thornton wish you a safe, happy and restful holiday season and look forward to being of assistance to you in 2015.