Posts Tagged Generic
There is a misconception held by some companies that are Black owned that they do not need to go through the compliance process. Such companies feel that the fact they have a high percentage or even 100% Black ownership and management they have met the B-BBEE requirements.
All companies in South Africa need to work on the B-BBEE scorecard. Ownership alone constitutes 20 points on the Generic scorecard (scorecard for companies with annual turnover of more than R35 mil) and 25 points on the QSE scorecard (scorecard for a company of between R5 mil and R35 mil annual turnover). Earning full points on the ownership element for either a Generic or QSE entity without points elsewhere does not make them B-BBEE compliant. The broadbased nature of the B-BBEE scorecard means all companies have to train their Black employees, buy from B-BBEE compliant suppliers, help other Black owned businesses to grow, donate to charity apart from other initiatives if they are to be labelled as truly empowering. This will speed up the process of emancipating the disadvantaged in South Africa.
What those Black owned companies that feel it unnecessary to work on the B-BBEE scorecard are doing is to drag and frustrate the process towards economic parity among the South African racial groups.
We spoke recently about QSE certificates that may be invalid after 1st August because no verification agency has been given an accreditation to renders services for code 800.
This resulted in a call from Christinah Leballo from SANAS who informed us that agencies do indeed have accreditation to render code 800 verification. She explained that SANAS did not want to complicate the certificate by adding in the words “Code 800 QSE”. Personally I don’t think that three extra words on a certificate is going to ruin the aesthetics of the certificate. (Look at an example). She did however state that if we considered it confusing that certificates do not have Code 800 QSE on it, they will address it by adding those words onto the certificate. We don’t consider it confusing at all. As far as we are concerned, if an agency does not have accreditation rights to render a specific service, they are not allowed to do so. SANAS is an accredited ISO accreditation agency. Their role is to accredit organisations to do specific tasks, e.g blood transfusion services, medical laboratories, calibration laboratories. The purpose of ISO is to ensure that procedures, methodologies and standards and complied with and followed and of course to remove confusion.
She also confirmed that no agency has been given accreditation to verify on any of the gazetted sector codes. This clearly means that any entity in the tourism, construction or forestry industry will not be able to produce a valid certificate and any certificate they do produce will NOT be able to be used to earn procurement points.
There is almost no chance that the dti will be able to produce an interpretive guide and verification manual for each of the sector codes by 1st August, and SANAS will not be able to accredit any agency by then. We would be surprised to see this happen before the end of the year.
The only alternative is for the minister to issue a notice allowing all entities in those industries to use the codes of good practice, or alternately granting an extension to companies in those industries from having to produce a valid scorecard.
The B-BBEE codes have encouraged the growth of small businesses (those with annual turnover below R35 million) and Black owned businesses through the element of Preferential Procurement. Generic companies (companies with annual turnover of more than R35 million) earn 8 points for spending just 25% with suppliers with annual turnover below R35 million as well as Black owned and Black women owned businesses.
This certainly encourages large generic companies to buy from suppliers who need support to grow leading to more empowerment of the more deserving entities and individuals. The growth of any company heavily hinges on the number of customers that they have. Having customers in the form of large corporates is more desirable for any small business because they have more capacity to pay for orders.
In other words, there is a benefit to the generic companies in the form of getting more BEE points while helping the sustainability of the smaller businesses.