New Amendments On BBBEE: Looking at transformation in the South African context

BY PIETER STEINMANN - SEPTEMBER 28, 2016

The South African Government has developed and implemented four Separate pieces of legislation that focuses on transformation within the business sector.

Namely the Skills Development Act 97 of 1998, Skills Development levies Act No 9 of 1999, Employment Equity Act No 55 of 1998 and the Broad Based Black Economic Empowerment Act No. 53 of 2003.

The above mentioned Legislation all work toward a common goal; the development and promotion of previously disadvantaged individuals, the elimination of unfair discrimination and to create an even playing field within the South African job market. 

Due to the lack of transformation over the past 20 years, government has now amended the acts in order to accelerate positive transformation; however this has become more onerous on businesses.

A BBB-EE certificate is becoming more and more like a licence to do business with the Government, Municipalities and other corporate giants in South Africa. Without a BBB-EE certificated that is valid and at least a level 6, companies run the risk of losing business to other competitors with better ratings.

With the changes to the Employment Equity act in 2014, the focus has moved from mere compliance to the degree of implementation that has taken place during the duration of the companies Employment Equity Plan.

Failure to comply with various sections of the Act will result in financial implication in the form of a fine that’s minimum value is currently R1.5 million Rand or 2% of the companies turnover, whichever is highest.

With both the EE Act and the BBB-EE Act, companies are required to place focus on the development and promotion of current staff members as well as the development of all designated individuals including people with disabilities.

Although Skills Development is only a small part of BBB-EE, it can be used to not only develop staff member, but also assist with Enterprise and Supplier Development as well as Management control, which all form part of the priority elements on the BBB-EE Scorecard.

In addition to the above, to ensure companies maximise Return on Investment, training programs need to result in a qualification or part qualification that is recognised by SAQA and the NQF.

The key to successful transformation is to look at the legislation holistically and develop and implement business strategies that speak directly to the requirements of the various Acts which will in turn result in the achievement of successful transformation.

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