Broad-Based Black Economic Empowerment (B-BBEE or simply BEE) forms an integral part of the economic landscape in South Africa. It is the encouragement of increased activity by Black South Africans in economic ventures to correct inequalities of the past. Obtaining a BEE certificate is instrumental in business improvements to foster increased market chances and become part of the economic transformation.
What a BEE Certificate Means
A BEE certificate is much more than just a piece of paper; it is an official document that represents a company’s commitment to transformation and inclusivity. It improves business opportunities as most contracts of the government and private institutions look for a certain level of compliance. What is more, a better BEE rating can lead the company to become attractive to more customers and partners, elevating the reputation of the organisation.
How to Get a BEE Certificate in South Africa
The process involved in acquiring a BEE certificate is as follows:
Awareness of the BEE Framework
There is a need to get acquainted with the B-BBEE Act and the Codes of Good Practice. As these documents set out the criteria and measurement framework that make a business BEE compliant. Understand the five elements of the BEE scorecard:
Ownership: This element measures the level of involvement of black people in the ownership structure of a company. It includes voting rights, economic interest, and realisation points. The goal is to ensure that black people have a significant stake in the company’s economic substance.
Management control: This element assesses the representation of black people in all levels of management, from board participation to executive directors. It also includes the percentage of black employees in senior, middle, junior management and director positions. The aim is to ensure that black people have a significant presence in decision-making positions.
Skills development: This element measures the value of training expenditure specifically provided to black employees and black people. It includes skills development spending on learning programs, learner-ships and bursaries. The goal is to enhance the skills and employability of black people.
Enterprise and supplier development: This element has three sub-elements: Preferential Procurement, Supplier Development, and Enterprise Development. Preferential Procurement measures the purchases from B-BBEE suppliers as a percentage of total procurement. Supplier Development measures the annual value of supplier development contributions. Enterprise Development measures the annual value of enterprise development contributions and sector-specific programs. The aim is to support the growth and development of black-owned businesses.
Socio-Economic Development: This element measures the value of contributions made by a company to socio-economic development initiatives, such as education, sport, culture, and charitable donations. The goal is to enhance the socio-economic conditions of black people and contribute to the broader economic development of the country.
Self-Assess Your Current BEE Status
Evaluate your business status and benchmark it against the BEE scorecard. Through the self-assessment, you may identify some of the solid points and grey areas or weak points to get started. Gather documentation like financial statements, employee records, training records, and supplier information to support your assessment.
Develop a BEE Strategy
Develop a strategy to enhance your BEE Compliance based on your above assessment. This could involve interventions such as training employees, revising procurement policies to favour black-owned businesses, or setting up socio-economic development projects.
Gather Documentation
Collect all necessary documents demonstrating your compliance with the five elements of the BEE scorecard. This documentation will be critical during the verification process. Ensure the records are up-to-date, accurate, and easily accessible.
Identify a Verification Agency
Select an accredited verification agency. The South African National Accreditation System accredits these, and the list of currently accredited ones may be found on the SANAS website. We recommend working with Pioneer Compliance Consultants. Contact the agency to find out what the agency needs and the process it will follow to facilitate the verification.
Validation Steps
Initial Discussion: The verification agency will advise you of the documents needed and the time involved in the verification process.
Site Visit: The verification agency will undertake site visits that are used to audit information that has been submitted. The verification analyst conducts interviews with employees, document reviews, and ensures conformity with the BEE codes.
Assessment: The agency assesses your performance and that of your organisation in regard to the BEE scorecard. These scores for each element will then be used to calculate your overall BEE rating.
Get Your BEE Certificate
After the verification exercise, the agency will also provide a report of your scores in each element and, of course, the overall BEE level. You will get your BEE certificate based on that report certifying your BEE status for one year. It will be published as an official acknowledgement of your level of BEE compliance.
The Different BEE Levels
Requirements for the different BEE levels are as follows, depending on the company’s size and performance on the BEE scorecard:
Level 1: 100 and more points
Level 2: 95 to 99.99
Level 3: 90 to 94.99
Level 4: 80 to 89.99
Level 5: 75 to 79.99
Level 6: 70 to 74.99
Level 7: 55 to 69.99
Level 8: 40 to 54.99
BEE Certificate Costs
The costs of obtaining a BEE certificate can vary depending on the size of your business, the complexity of your business, and the agency with which you decide to verify. Small to medium-sized companies can expect to pay between R10,000 to R30,000. More prominent companies may have a higher cost because the documentation and verification process can be longer.
How Long it Takes to Get a BEE Certificate in South Africa
It usually ranges between 4 and 12 weeks. This period will include the documentation preparation and gathering, the site visit and evaluation from the verification agency, and the report and issuing of the certificate. Engage with the verification agency early and have the documents ready to reduce the time it takes.
Conclusion
Acquiring a BEE certificate is an essential process for a business in South Africa to be marketable and be part of the ongoing economic transformation. When companies know all the requirements and the process, they can be more prepared for an easy verification process. Contact Pioneer Compliance Consultants and they will guide you on how to get a BEE certificate without going through the hurdles of complex paperwork and follow-up. Remember, improved business opportunities and corporate reputation are benefits of BEE compliance.