Transcript Essential Hardware - BEE Seminar

Broad-Based Black Economic
Empowerment
Keith Levenstein
Presented by EconoBEE
November 2009
The essence of B-BBEE is
– creating opportunities for the whole population
– skills development (including management)
– job creation
– development of entrepreneurship
BEE the Long Journey
Equitable Economic Opportunities
Emerging black middle class & investors
The Opportunity Barrier
Black Entrepreneurs
The Business Barrier
Black Entrepreneurs
The Skills Barrier
Black workers and job-seekers
The Poverty Barrier
Black unemployed & rural poor
Ownership &
Management
Affirmative Procurement &
Enterprise Development
Skills Development &
Employment Equity
Employment Equity/Job Creation
Socio-Economic Development
Codes of Good Practice
• Mandated by the BBBEE Act
– Act calls for industry charters as well. Some have been finalized,
e.g. Construction, but not the FSC
• Gazetted on 9th February 2007
– Gazette no.29617
• Provides a comprehensive scorecard to measure and
implement B-BBEE
• Three types of entities in South Africa
– Exempt Micro Enterprises (EME) (Turnover < R5million)
– Qualifying Small Enterprises (QSE) (Turnover R5million – R35
million)
– Generic scorecard entities (Turnover > R35 million)
The FSC
• The Financial Sector Charter pre-dated the
codes and currently does not conform to the
requirements of the B-BBEE act or the codes.
• The FSC CANNOT be used to produce a
scorecard for your customer (it will not help him
earn his own BEE points)
• The FSC in its current form seems to be quite far
from being complete – until that happens you
need to follow the codes.
B-BBEE Scorecard – Generic and QSE
BEE Elements
Indicators
Generic
QSE
Direct Empowerment
Equity Ownership
% share of economic benefits
23
28
Management
% black persons in executive management and/ or
executive board and board committees
11
27
Human resource development and employment equity score
Employment equity
Weighted employment equity analysis
18
27
Skills development
Skills development expenditure as a proportion of
total payroll
15
25
20
25
Indirect Empowerment score
Preferential
Procurement
Procurement from B-BBEE enterprises
proportion of total procurement
Enterprise
Development
Rand value of contributions to beneficiaries for
Enterprise Development purposes
15
25
Rand value of contributions to beneficiaries for SED
purposes
5
25
107
182
as
a
Residual
Socio-economic
Development
Total Score
NB QSE chooses only 4 elements
Why have a Scorecard?
• Your customers are asking for it
– It is regarded as good service to give customers what they want!
• The FSB needs it (section 10 of the B-BBEE act)
• Government tenders will soon be based on the B-BBEE
scorecard.
Why do customers want your scorecard?
• Your good score will increase your customers’ own BEE
scorecard:
– Procurement is worth 20/25 points on the scorecard
• This is why some customers may be prepared to move
to a supplier with a better score
Preferential Procurement
- the Competitive Edge
Years 0 - 5 Years 6 - 10
70%
50%
BEE Procurement Spend from all Suppliers based on the BEE
Procurement Recognition Levels as a percentage of Total
Measured Procurement Spend
BEE Procurement Spend from Qualifying Small Enterprises or
Exempted Micro-Enterprises based on the applicable BEE
Procurement Recognition Levels as a percentage of Total
Measured Procurement Spend
12
3
10%
15%
BEE Procurement Spend from any of the following Suppliers
(regardless of their BEE Procurement Recognition Level) as a
percentage of Total Measured Procurement Spend:
1. Suppliers that are more than 50% black owned (3 points);
2. Suppliers that are more than 30% black women owned (2
points)
5
15%
20%
Total - Preferential Procurement
20
BBBEE score
• Measured as a contributor
Contribution Level
Qualification
BEE Recognition Level
Level 1 Contributor
≥ 100 points
R1.35 for every R1 spent
Level 2 Contributor
≥ 85 points but < 100 points
R1.25 for every R1 spent
Level 3 Contributor
≥ 75 points but < 85 points
R1.10 for every R1 spent
Level 4 Contributor
≥ 65 points but < 75 points
R1.00 for every R1 spent
Level 5 Contributor
≥ 55 points but < 65 points
R0.80 for every R1 spent
Level 6 Contributor
≥ 45 points but < 55 points
R0.60 for every R1 spent
Level 7 Contributor
≥ 40 points but < 45 points
R0.50 for every R1 spent
Level 8 Contributor
≥ 30 points but < 40 points
R0.10 for every R1 spent
Non-Compliant Contributor
< 30 points
R0 for every R1 spent
B-BBEE – the competitive Edge
• The sole measurement of B-BBEE is
about points.
• You need to produce a B-BBEE Scorecard
because your customers want it and
various licensing authorities need it.
• Business sense and BEE sense – Make
decisions that benefit your company
• The higher your score, the better it will be
for your customer!
Rating your company
• Always produce your own rating before approaching a
verification agency.
• The use of verification agencies
– As from 1st February 2010 only certificates verified by accredited
agencies or those with pre-assessment letters will be valid. Until then
non-accredited agencies can be used.
– Prepare for a rating by getting BEE knowledge and using EconoBEE
Scorecard
• A verification agency verifies your data – can produces a
certificate from your data. Without data, your score will be
zero!
• Explain your rating in terms of the B-BBEE Codes of
Good Practice
• Advertise your rating to customers
Thank you
Keith Levenstein
EconoBEE
0861 11 30 94
[email protected]
www.econobee.co.za