Businesses that fail to achieve minimum BEE will get lower score

Friday, May 18, 2012

Cape Town - Businesses that fail to achieve a minimum score on the Black Economic Empowerment (BEE) scorecard for ownership, procurement and enterprise development will be penalised by having their BEE level status dropped, the Minister of Trade and Industry Rob Davies said on Friday.

Davies, briefing media after his Budget Vote in Parliament, said his department was also putting in place a framework for wholly owned black enterprises to get BEE ratings.

He said the penalties would be contained in the new amended BEE codes which the department is yet to release.

Big companies that fail to carry out certain minimum requirements in the codes of ownership, procurement and enterprise development would lose two places in their BEE level score, while smaller companies that fail to meet the minimum requirements on these elements would lose one place in their BEE level score.

Davies said the new codes would help compel bigger companies to become more active in enterprise creation.

The department is also putting in place a framework for wholly owned black enterprises to get BEE ratings

"The other problem we have seen is that wholly-owned or largely black-owned companies have been required to go to verification agencies, to get and pay some money to tell someone who is procuring from them that they are black and we think that that is a waste of resources.

"So we are creating a framework for automatic recognition for companies that meet that without having to go to verification agencies," he said.

The minister said the new BEE codes were still being drafted, while the BEE Bill - which would address fronting - was still being refined after the department received public comments on the Bill.

Turning to trade, Davies said the government would be focusing more on increasing trade with fast-growing developing nations.

He said last year saw a 29% increase with fellow Brics (Brazil, Russia, India, China) members.

The department is also looking at boosting trade relations with other countries including those in Middle East and Asia.

One of these Asian countries is Indonesia, which Davies said he would visit later this year, adding that he had forged a good relationship with his Indonesian counterpart.

He said the department had been working with provinces to determine sites for possible special economic zones (SEZs) when the SEZs Bill is enacted and comes into force.

On other matters, Davies welcomed the finding today by the Labour Court on National Consumer Commissioner Mamodupi Mohlala-Mulaudzi's case against the department, when the court ruled in favour of Mohlala-Mulaudzi and said his department would comply with the court order.

He said the department took note of the fact that the court's order had pointed out that Mohlala's appointment as a commissioner was for a term which would end on September 3 this year.

"We note that there are a number of rulings relating to process matters related to that [Mohlala's appointment period] and we intend accept that judgment and comply with that ruling," he said.