South Africa's Trade and Industry Minister, Rob Davies, published revised Broad-based Black Economic Empowerment Codes of Good Practice (the BBBEE Codes) for public comment on 5 October 2012. According to Minister Davies the revised codes are intended to ensure that genuine broad empowerment will take place.

Many amendments are proposed and unless business influences the process the revised BBBEE Codes may remain in its current form. One key amendment is that the generic scorecard has been reduced from seven to five elements, with Employment Equity and Management Control being consolidated and Preferential Procurement and Enterprise Development merged to form a Supplier Development Element. The weighting of these elements have also been adjusted.

Furthermore three elements, ownership, skills development and supplier development, have been classified as priority elements. Business will have to comply with the minimum threshold requirements of these three priority elements. If companies do not comply with these thresholds their BBBEE status will be discounted by either two levels if using the Generic scorecard or one level if using the Qualifying Small Entities scorecard. Businesses will have to achieve a minimum of 40% of the threshold prescribed in order to avoid having their BBBEE status discounted.

Business should take cognisance of the draft revised BBBEE codes to determine how it would affect them, especially as some businesses may lose their current BBBEE status.

Any interested parties should submit comments to the dti within 60 days from 5 October 2012.

Rian Geldenhuys
© Trade Law Chambers 2012