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BEE codes and BEE scorecard

The Broad-Based Black Economic Empowerment (B-BBEE) Codes of Good Practice emerged in 2007 to provide a standard framework for the measurement of BEE across all sectors of the economy.

The codes require that all entities operating in the South African economy make a contribution towards the objectives of BEE.

The first phase of the codes encourages all entities, public and private, to implement proper BEE initiatives through the issuing of licences, concessions, sale of assets and preferential procurement.

The second phase of the codes covers the seven components of the B-BBEE scorecard, namely: ownership; management control; employment equity; skills development; preferential procurement; enterprise development; and socioeconomic development (including industry-specific and corporate social investment initiatives).

The Strategy on B-BBEE, released in
2003, assigns points values to the seven elements of the B-BBEE scorecard as follows:

B-BBEE SCORECARD
Element Points
Ownership 20
Management control 10
Employment equity 15
Skills development 15
Preferential procurement 20
Enterprise development 15
Socio-economic development 5
TOTAL 100
end of table

The B-BBEE Act
of 2003 makes the codes binding on all state bodies and public companies, and the government is required to apply them when making economic decisions on:

  • procurement,
  • licensing and concessions,
  • public-private partnerships, and
  • the sale of state-owned assets or businesses.

Private companies must apply the codes if they want to do business with any government enterprise or organ of state – that is, to tender for business, apply for licences and concessions, enter into public-private partnerships, or buy state-owned assets.

Companies are also encouraged to apply the codes in their interactions with one another, since preferential procurement will affect most private companies throughout the supply chain.

BEE Codes and BEE Scorecard information from www.southafrica.info

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