6 Month Extension To The Revised B-BBEE Codes Transitional Period

6 more months to adapt the way we do business to the requirements of the revised B-BBEE Codes of Good Practice – Olga Meshoe – Transcend Corporate Advisors

The 21^st of March 2014 marked 20 years of the advent of democracy in South Africa.

On the 7^th of May 2014, South Africans will go to the polls to exercise their democratic right to vote and in so doing give voice to, as individuals, the most effective way they have to express their satisfaction (or otherwise) with the current conditions of the country.

Business has at its disposal the framework, set out in the generic Codes of Good Practice (government gazette 29617 of 2007) (the “Old Codes”), to make its impact on the current conditions of our economy and society at large.

According to the Department of Trade and Industry (“DTI”), the objective of Broad-based Black Economic Empowerment (“B-BBEE”) legislation, introduced for the first time in terms of the Broad-based Black Economic Empowerment Act, 2003 and then fleshed out in terms of the Old  Codes is “an integrated and coherent socio-economic process that directly contributes to the economic transformation of South Africa and brings about significant increases in the number of black people that manage, own and control the country’s economy, as well as significant decreases in ethnic inequalities”.

Twenty years into our democracy and five years following the implementation of the Old Codes, the hope for a better South Africa has not become a reality for many.

The revised generic Codes of Good Practice (government gazette 36928 of 2013) (the “Revised Codes”) which were promulgated on the 11^th of October 2013 provided for a transitional period of 12 months during which entities are to familiarise themselves with and understand the provisions of the Revised Codes. Entities are also to begin to implement the substantial changes, from the Old Codes, that the Revised Codes require with regards to the manner and in respect of whom the private sector contributes to transformation.

On the 18^th of March 2014, Minister Rob Davies extended the transitional period from 11 October 2014 to 30 April 2015 in terms of government gazette 37453. Entities have thus been granted a further 6 months within which to absorb the step-changes required in order to comply with the Revised Codes. The application of the Revised Codes will thus only be obligatory where an entity begins the verification process on or after 1 May 2015 (entities may still choose to be verified in terms of the Revised Codes prior to 1 May 2015).

Whilst the extension is welcomed, caution needs to be raised against delaying the gaining of insight and understanding of the implications of the Revised Codes and investigating opportunities to equip one’s business to move away from tick-box compliance (which is easy to succumb to under pressure) towards meaningful transformation. We believe the extension can be best used to pressure-test changes in systems and processes as well as changes in dialogue brought on by the Revised Codes so as to certify that they bring about the desired results.

As identified in the National Development Plan, South Africa continues to be plagued by (among other things) high unemployment, a poor educational system, and spatial patterns that drive inequality. The changes set out in the Revised Codes more aggressively attempt to focus businesses efforts on ensuring that actual and sustainable economic empowerment occurs in the lives of a broader base of black South Africans. The sooner this is effectively addressed, the better for our country. Transcend has developed a range of new products specifically aimed at ensuring that entities are able to adequately address the letter and the spirit of the Revised Codes in a manner that ensures a return on investment and enables real, meaningful and sustainable transformation.

Further information on these offerings is available on our website or on request to brian@transcend.co.za .