According to the Minister of Trade & Industry, the main rationale, for the proposed amendments is to deal with the formalistic tick-box approach to BBBEE generally adopted by corporates in South Africa and to ultimately achieve real empowerment.

 

The first major amendment is the thresholds for enterprises to qualify as Exempted Micro Enterprises (EME), QSEs or large entities, has changed as follows:

• EME increased from ZAR 5 million to ZAR 10 million;

• QSE increased from ZAR 5 million - ZAR 35 million to ZAR 10 million - ZAR 50 million;

• large entities increased to ZAR 50 million and above.   

 

The second major amendment is that the number of elements of the generic scorecard will be reduced from seven to five. These will be:

• ownership

• management control (including employment equity)

• skills development

• enterprise and supplier development

• socio-economic development

 

The third major amendment, and possibly the most controversial one is the introduction of sub-minimum targets of 40% for "priority elements" including ownership, enterprise and supplier development and skills development. If an entity does not achieve the minimum compliance for any of the priority elements, their overall contributor status will be reduced by two levels if they are large entities or by one level if they are qualifying small enterprises.  

 

The fourth major amendment is the points to levels table. The crucial aspect to an entity's customer is their recognition level – the higher the level the more procurement points the customer can earn. Under the current codes, if an entity earned 30-40 points it achieved a level 8 however with the amended codes, the entity needs a minimum of 40 points to be compliant and achieve a level 8. An “old” level 4 (65 points) with 100% recognition is now a “new” level 7 with 50% recognition.

 

The Amended Codes have a new points to level table as follows: