LU 10 - BEE

Question 1

What is the aim of B-BBEE?

Answer 1

BEE does not aim to be the distributor of wealth only, as it rather aims to expand the country’s economic base and to reduce poverty in general, through a broad-based approach.

Question 2

How is BEE defined in the B-BBEE Act?

Answer 2

The empowerment of all black people including women, workers, youth, people with disabilities and people living in rural areas through diverse but integrated socio-economic strategies that include, but are not limited to:

a. Increasing the number of black people who manage, own and control enterprises and productive assets;
b. To facilitate ownership and management of enterprises and productive assets by communities, workers, cooperatives and other collective enterprises;
c. To human resources and skills development;
d. To achieve equitable representation in all occupational categories and levels in the workforce;
e. To preferential procurement; and
f. To investment in enterprises that are owned or managed by black people.

Question 3

Who is a black person?

Answer 3

African, Coloured, Indian (not Asian), born South African, become a citizen before 1994 or after 1994 due to apartheid restrictions

Question 4

Discuss BEE implementation

Answer 4

1. Exempted micro enterprises: Turnover less than R10m (Level 4 contributor, does not need BEE certificate; only a certificate from auditor confirming turnover)
2. Qualifying small enterprises: Turnover less than R50m (lower requirements on scorecard)
3. Large entities: R50m+

Question 5

Discuss the BEE scorecards

Answer 5

1. The generic BEE scorecard is the main tool whereby a business enterprise’s BEE status or progress is measured
2. It is a measure of standardisation and a flexible approach to accommodate every charter and enterprise
3. It allows government and other procurement agencies to-
   a. apply qualification criteria for the granting of licenses and concessions;
   b. apply a preferential procurement policy,
   c. determine the sale of SOEs and
   d. to develop criteria for entering into partnerships in the private sector

Question 6

What are the measurement standards?

Answer 6

1. Company ownership: Voting rights and economic interest (eg. dividends). No excluded employee share schemes | 25 points
2. Management control: Voting rights, top + middle management participation | 15 points
3. Skills development: Learnerships, SD spend on black employees | 25 points
4. Enterprise and supplier development: Assistance acceleration development, sustainability and ultimate financial and operational independence of black business | 40 points
5. Socio-economic development: Access to the economy, facilitate income and employment, training and mentors | 5 points