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BEEE Codes

BEEE Codes

The new Codes have been introduced and many companies face a difficult time understanding and implementing the various variables needed to achieve a workable solution to partner suitable procurement requirements. Many multinational companies will refuse to do business with you if procurement recognition levels are low.

It’s not easy to comprehend but it is simple to understand the intentions of the law makers. So let us understand that there is a need for empowerment and look at ways to make it work for all of us.

The first BEE Codes were introduced in 2007 but following a review the South African Government revised the BEE Codes in October 2013. These Revised Codes are applicable from October 2014. However any entity may apply them in the transition period from October 2013 to October 2014.

The table below shows the BEE Point requirement for each of the 8 BEE Status Levels and how much your customers can claim on their BEE Scorecard as a result. It shows the difference between the 2007 Codes and the 2013 Codes;

2007 BEEE Codes 2013 BEEE Codes BEEE Status (Level) Procurement Recognition
100+ 100+ 1 135%
85-100 95-100 2 125%
75-85 90-95 3 110%
65-75 80-90 4 100%
55-65 75-80 5 80%
45-55 70-75 6 60%
40-45 55-70 7 50%
30-40 40-55 8 10%

The Revised Codes have reduced the Scorecard Elements from 7 to 5 by combining Management Control and Employment Equity into one element and combining Preferential Procurement and Enterprise Development into one element. A portion of the old Enterprise Development element has been limited to Supplier Development.

The difference between the 2007 BEE Scorecard and the 2013 Scorecard is shown below;

Criteria 2007 BEE Codes 2013 BEE Codes
Weighting Bonus Weighting Bonus
Ownership 20 3 25 0
Management Control 10 1 15 4
Employment Equity 15 3 - -
Skills Development 15 0 20 5
Preferential Procurement 20 0 - -
Enterprise and Supplier Development 15 0 40 4
Socio-economic Development 5 0 5 0
Total 100 7 100 13

The major reasons for so much confusion and reluctance to attain the comfort to embrace the efforts is that no one want to give away 50 percent of their business away.

It is therefore imperative to look at five categories carefully and decide how and why you can attain the maximum points without losing the organisational culture of your company. You also need to look at your social responsibility with the attention it deserves.

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