03 Mar BEE Certificates for Black Owned EME’s & QSE’s under Revised BEE Codes of Good Practice 2013
The Revised BEE Codes of Good Practice 2013 gave rise to a number of questions surrounding their application due to the DTI having advised that these codes would take immediate effect from 11 October 2013 and could run concurrently with the 2007 BEE Codes of Good Practice. Due to the relaxed nature of compliance particularly for Exempted Micro Enterprises(EME’s) and Qualifying Small Enterprises(QSE’s), we were inundated with requests to provide our clients with EME & QSE certificates based on the revised codes, which gave the below enhanced recognition:-
- Enhanced Recognition of black owned EME’s (entities with a turnover of R0 – R10 million) – Should the EME have greater than 51% but less than 100% black ownership it will qualify as a Level 2 contributor and should the EME have 100% black ownership it will qualify as a level 1 contributor.
- Enhanced Recognition of black owned QSE’s (entity with a turnover of R10 – R50 million)– Should a QSE have greater than 51% but less than 100% black ownership it will qualify as a Level 2 contributor, and should the QSE have 100% black ownership it will qualify as a level 1 contributor.
What was unclear at the time of the release of the codes was whether or not a certificate would still be a valid form of confirmation of one’s BEE status, should they fall within the EME or QSE categories, due to new requirements stating that a sworn affidavit was an acceptable form of one’s BEE status. Industry as whole took the stance that the BEE certificate was still the only legitimate, quantifiable and measureable form to determine one’s BEE status and as a result, we were obliged to assist our clients with BEE certificates based on the enhanced recognition of these revised codes.
It later emerged that the DTI issued a statement in December 2013 stating that NO verification agency was to issue a BEE certificate to an EME or black owned QSE under the revised codes. This was due to the fact that the revised codes made provisions for an affidavit for these categories and not a BEE certificate. It is thought that the reasoning behind this was to alleviate the cost implication of these SMME’s acquiring a BEE certificate from a reputable rating agency. This however was counterproductive as tender boards, organs of state and public run entities were not accepting the affidavit as proof of one’s BEE status, largely because their procurement policies are aligned to the PPPFA ACT and it does not currently make any provisions to accept affidavits as proof of BEE.
This notice serves to inform all our clients who currently hold a certificate that is due to expire, which was issued on the revised codes that we will not be able to renew these certificates based on the revised codes enhanced recognition ,however we can still issue EME & QSE certificates based on the 2007 BEE Codes of Good Practice. The revised codes will officially be implemented on the 1st May 2015 at which time the affidavit should become an acceptable form of an entities BEE status. Until such time we advise that a valid BEE certificate is obtained prior to the transitional period taking place.