Black welcome for new BBBEE codes
BLACK entrepreneurs have hailed the revised broad-based black economic empowerment Codes of Good Practice
The codes will for the first time exempt a 100% black-owned small enterprises making a turnover of less than R10-million from a B-BBEE verification process.
The 100% black-owned enterprises will automatically qualify as Level 1 contributors, which will make it easier for them to secure government tenders.
There is also a sting in the new empowerment laws as companies linked to fronting will be penalised 10% of their revenue.
The revised codes, were unveiled by Trade and Industry Minister Rob Davies on Monday. A document of the codes is expected to be released today.
Trucking and construction entrepreneur Pakiso Gumbi said it was currently challenging for a 100% black-owned business like his to secure a Level 1 rating.
He said the B-BBEE verification was time-consuming, tedious and expensive.
"I had to spend a lot of money on verification and trying to prove to an agency that I was black," said Gumbi.
"And if my business used white suppliers, who provided cheaper goods and services, I would be penalised.
"I am happy that I will now secure an automatic Level 1 qualification, regardless of the suppliers I use."
Tim Tebeila, chairman of Sekoko Resources, said he was not in favour of the previous B-BBEEE codes because it was confusing.
"Sometimes verification agencies would tell us we are on Level 3, sometimes they would change us to being a Level 2 contributor. It was confusing," he said.
"Our company had to spend a hell lot of money on verifying and analysing whether Sekoko was really black-owned and had black management," Tebeila said.
Black Lite Consulting chief executive Ajay Lalu said companies that were tempted to abuse the system would take into consideration the 10% revenue fine they might have to fork out.
"Unlike in the past, there was no disincentive for abusing the B-BBEE system. Companies who are engaged in fronting will be hit hard," said Lalu.
He added that the revised codes would push established companies doing business with government to focus on using black and women-owned suppliers.