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BBBEE codes compliance extended to 2015

BBBEE CODES COMPLAINCE
The new extension of around six months will offer companies more time to adjust to the new targets

BBBEE CODES COMPLAINCE The new extension of around six months will offer companies more time to adjust to the new targets

23rd May 2014

  

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Building industry representative organis-ation Master Builders Association (MBA) North states that government has further extended the implementation date of the new broad-based black economic-empowerment (BBBEE) codes of practice – but it has also strongly advised companies to take prompt action to comply with the codes as the new implementation date is unlikely to be extended again.

MBA North education, training and transformation manager Dr Deon Landmann says, on March 18 this year, Trade and Industry Minister Dr Rob Davies announced that his department would extend the transitional period provided in Paragraph 10 of the Amended Codes of Good Practice, published in Government Gazette No 36 928 on October 11, 2013, by six months.

The transitional period will now run from October 11, 2013, to April 30, 2015.

“The new-look codes were published on October 11, 2013, and the transitional period was initially scheduled to stand for a year to October 10, 2014. The new extension of around six months will offer companies a longer period to adjust to meeting the new BBBEE targets, which many believe will be far more difficult to comply with,” he states.

“The Department of Trade and Industry received several requests for a longer transition period, owing to the low state of readiness of companies. MBA North welcomes this move but we feel that it is important that companies immediately begin planning ways of complying and reaching their set BBBEE level once the amended codes have kicked in,” says Landmann, adding that it is unlikely that there will be any further extensions of the implementation dates.

During this transition period, a measured entity could elect to have its compliance measured either in terms of the new BBBEE Codes of Good Practice, or the old BBBEE Codes of Good Practice of 2007.

In addition to the extension announced, all sector charter councils have been advised to align their respective sector codes to the new codes by the end of April 2015.

“In this instance, we are still uncertain if a transitional period would also apply. If not, companies within a sector-code scope will have to be measured immediately against an unknown target – which seems unreasonable,” he says.

Gazetted sector codes apply to construction, tourism, forestry, transport, information and communication technology, agriculture, property, financial services and chartered accountancy.

The updated codes, which reduce the scorecard components from seven to five, were published on October 11, 2013, and followed the publication of amendments to the Act on January 27.

The five elements deal with ownership, management control, skills development, enterprise and supplier development and socioeconomic development.

“Minimum thresholds were also set for the priority elements which a firm had to obtain to sustain its rating. Failure to meet the thresholds will lower a company’s empowerment status by at least one level, with Level 1 representing the highest achievable status. “This will make it more difficult for enterprises to achieve, and retain, their current BBBEE contributor status ratings under the revised codes,” says Landmann.

“In light of the change to the compliance date, companies are advised to delay verification to just before October to consider an earlier veri-fication. This will allow them to be verified again next year, prior to April 2015, to again benefit from the 2007 codes,” Landmann advises.

Edited by Megan van Wyngaardt
Creamer Media Contributing Editor Online

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