Webber Wentzel E-Alert: Revised Draft Amendments to B-BBEE Codes released for public comment

22 June 2018

Webber Wentzel

Webber Wentzel Logo
Webber Wentzel E-Alert Banner
22 June 2018 Follow us on Facebook Follow us on LinkedIn Follow us on Twitter

Revised Draft Amendments to B-BBEE Codes released for public comment

On the 15th of June 2018, the Minister of Trade and Industry published draft amendments to the Preferential Procurement and Enterprise and Supplier Development element of the generic B-BBEE Codes, which will be open for public comment for a period of 60 days.

A key focus of the proposed amendments is procurement from, and enterprise and supplier development of, 51% Black-owned entities.

In summary, the proposed amendments provide as follows:

  • an increase in the target for procurement from entities which are at least 51% Black-owned from 40% to 50% with an increased weighting from 9 to 11 points;
  • an enhanced recognition of two times of actual spend for procurement spend on entities which are at least 51% Black-owned on a flow-through basis;
  • beneficiaries of enterprise development or supplier development initiatives which are currently limited to exempted micro-enterprises and qualifying small enterprises that are 51% Black-owned, will include large entities which are 51% Black-owned on flow-through basis; and
  • procurement from large entities which are 51% Black-owned on a flow-through basis will also qualify as procurement from exempted micro-enterprises or qualifying small enterprises.

These proposed amendments follow hot on the heels of the draft amendments to the B-BBEE Codes published on 29 March 2018, which amongst other things, propose a deemed level 2 B-BBEE status for large entities which are at least 51% Black-owned on a flow-through basis or a deemed level 1 B-BBEE status for large entities which are 100% Black-owned on a flow-through basis.

If finally incorporated into the B-BBEE Codes, the proposed amendments are likely to catalyse the implementation of 51% Black ownership transactions. Importantly, the structuring of these transactions could not be reliant on the modified flow-through principle, if the full benefits of the proposed amendments are to be reaped.


CONTACT US


For further information, please contact your usual Webber Wentzel adviser or one of the people listed below.

Adam Ismail | Partner
adam.ismail@webberwentzel.com | T: +27 21 431 7383

 

Candice Meyer | Partner
candice.meyer@webberwentzel.com | T: +27 21 431 7347

 

Jonathan Veeran | Partner
jonathan.veeran@webberwentzel.com | T: +27 11 530 5336

 

Stacy Mogale | Partner
stacy.mogale@webberwentzel.com | T: +27 11 530 5092

 

Safiyya Patel | Partner
safiyya.patel@webberwentzel.com | T: +27 11 530 5853