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