Based on the score, you obtain a certain level. Level 1 is very compliant while level 8 is noncompliant. Unlike the previous legislation, the new codes focus on all requirements to uplift economic participation and include socio-economic development, supplier development, enterprise development, skills development, employment equity and management control.
One can see the trickledown effect from suppliers to government down to their suppliers. Intrinsic to its technical name, BEE is a special policy that is instrumental in broadening the economic base of the nation. By promoting the economic elevation of black people, the policy works to uplift the previously disadvantaged, which will ultimately lead to socio-economic transformation.
The main objective of B-BBEE is the inclusion of black people defined broadly as Africans, Indians and Coloureds in the economy, within a larger goal of national empowerment, targeting historically disadvantaged people such as black people, women, the youth, rural communities and disabled people. It happens all too often that economic growth that is balanced on inequalities further marginalises people, resulting in an extremely unstable and volatile economy, which in turn erodes the possibility of a collective and sustainable South Africa of which we can be proud.
The history of South Africa has resulted in an economic and opportunities disparity based on race and has resulted in many Black people in South Africa not enjoying the same opportunities and so being substantively equal to the remainder of South Africa.
The purpose of BEE is to bridge the gap between formal and substantive equality to ensure that all people in South Africa fully enjoy the right to equality. At Norton Rose Fulbright we intend to use the BEE strategies that we devise for you to help achieve this goal and to ensure that our services brings the BEE Level result you desire as well as helping to transform South Africa. Our second focus is to create sustainable and multi-year BEE strategies which allow you to grow your supply chain over time to assist in the transformation of your sector, whilst ensuring quality and competitive suppliers and service providers for you to procure from in the future.
Obtaining licences, consents, or concessions from organs of state Certain industries require an entity to have a particular percentage of Black ownership or BEE level in order to receive and maintain a licence to operate.
In addition, entities in certain industries may be asked to indicate their transformation initiatives which can be different to a BEE score in terms of the BEE Codes in order to obtain concessions to, for example, export. Organs of state are generally required to issue a request for proposal RFP for any work that they intend to source from the private sector. A high BEE score can, therefore result in the bidder achieving a better total score than another bidder with a low BEE score even though the bidders have similar scores for the pricing portions of their bids.
Certain organs of state have also been known to set minimum BEE criteria relating to Black ownership or BEE ratings before potential bidders may qualify to even submit bids. With regards to interactions with private entities, a company will score better for BEE itself if it procures goods and services from other entities with high BEE ratings.
Due to the nature of the preferential procurement element, a customer may prefer to procure from an entity with a low overall BEE score but high Black people and Black women ownership as that supplier will provide the customer with more preferential procurement points towards its own BEE score than a supplier with low Black ownership but a higher BEE score.
Accordingly, one should not simply focus on a BEE score but, rather, the interplay between the level of Black ownership, BEE score, and commercial attractiveness to customers. It is also important to note that certain imports are excluded from your BEE procurement target. The broad-based approach is a comprehensive system to radically change the old way how business was conducted in South Africa from an exclusively white-dominated system into an all-inclusive approach that will benefit everyone in the country as a whole.
This is done by transforming the economic make-up of business by encouraging and facilitating black ownership, changing the racial and gender profiles in the upper echelons of business and creating access and more opportunities for Black People in business. Focus is placed on skills development, procurement initiatives, development of small black businesses and socio-economic development.
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