BUSINESS INTEL
“ In what is probably the most critical amendment, the amended Code introduces the concept of Priority Elements. Companies will be obliged to meet at least the minimum threshold of 40 % of the target of each of Ownership; Skills Development; and Preferential Procurement and Supplier Development.”
companies that do not comply with 40 % of the QSE Skills Development target( 1.5 % of leviable amount training black people), whereby they drop one level. But companies can also be raised two levels if they achieve full points( excluding bonus points) for the QSE Skills Development target and / or full points for QSE Supplier Development contributions( 1 % of NPAT).
Amended ownership scorecard
Voting rights in the hands of black employees must be 32.5 % for all businesses, rising to 35 % in year four, with 10 % voting rights in the hands of black women( 14 % in year four). The same percentages apply in the case of black economic interest, with the additional criteria being 10 %( rising to 12 % in year four) in the hands of black designated groups, ESOPs( employee share options) and broad-based ownership schemes, in the case of contractors, and 5 % and 6 % respectively in the case of BEPs.
Black-designated groups include youth, disabled, rural, unemployed, or military veterans.
Management control and employment equity have been merged into one element, with the previous‘ top management’ now referred to as executive management.‘ Other executive management’ refers to senior management that do not
38- CEC September 2018 serve on the board( no duplication). Calculation for senior, middle and junior management is to be split according to race and gender, using either national or provincial( majority of staff) targets.
Skills Development
The Code furthermore promotes small business enterprises and encourages their growth by compelling companies to do business with QSEs and EMEs to ensure B-BBEE creates equal opportunities for all. Skills development is no longer limited to staff but can be any black person unless otherwise stipulated. Bonus points are awarded for the absorption of learners at the end of learnerships by any company. A trainee tracking tool must be in place.
Annual submissions to the Seta by 30 April every year is a prerequisite to earning any points on this element— an important aspect to be adhered to. Stepped targets are in place for total skills development spend for immediate effect, year three, and then year five onwards. Additional points are available based on how and to whom the spend was done; for example, on African people, black management, and bursaries / scholarships.
PP & Supplier Development( SD)
This is another priority element for which companies must achieve 40 % of each of PP, SD programmes, and SD contributions targets to avoid dropping one level. The requirement for Empowering Supplier status is as per the Amended DTI Codes— with blanket approval being applied to every company at this stage.
The points and targets for spend on ≥51 % black-owned suppliers are lower than other amended codes. Bonus points are available for spend on black-designated groups and enhanced spend on ≥51 % blackwomen-owned suppliers. The three points for black-womenowned spend is achieved when using suppliers that are ≥35 %— not ≥30 % as with other amended codes. To optimise points, 20 % of SD contributions should be to suppliers that are ≥51 % blackwomen owned. Up to 75 % of the points( versus 15 % on the other amended Codes) can be attained on shorter payment terms with suppliers.
Suppliers are required to be‘ empowering suppliers’ to be awarded points under Procurement, with EMEs and start-ups being automatically classified Empowering. More than 25 % of cost of sales( excluding labour and depreciation) must be sourced from local suppliers. Half of jobs must be created for black people, with no decrease in the number of black staff from prior rating. nn