Black Economic Empowerment (B-BBEE) - Helping you and the Economy Grow

3Sep, 2023

Exciting News! – We’re thrilled to announce a significant milestone in our journey

Our unyielding commitment to transformation has led us to achieve a remarkable B-BBEE Level 1 status. But that’s not all – we have even more fantastic news to share. We’re excited to inform you that EconoBEE is now proudly 100% black-owned, marking a monumental shift towards greater transformation & inclusivity. To celebrate these achievements, we would like to invite our valued clients, esteemed consultants, visionary business owners, and dedicated B-BBEE compliance professionals to an exclusive and enriching workshop. Join us at our offices in Johannesburg for a dynamic – and complimentary – seminar where we’ll delve into the intricacies of B-BBEE and its pillars.

This event aims to refresh and enhance your understanding of B-BBEE dynamics, equipping you with invaluable insights to navigate the evolving landscape. Let’s continue shaping a more inclusive and empowered business environment together. RSVP now for this not-to-be-missed opportunity to grow and learn together.

Now a little bit about our 3 directors:

Allan Maphanga

Allan is an accomplished entrepreneur and corporate manager who has cultivated significant skills through hard work and dedication. Since joining the business in 2016, Allan’s career has soared to greater heights, progressing from junior ranks within the EconoBEE structure to assuming a directorial role within the firm. As an experienced B-BBEE Consultant with adept people management skills, he specializes in coordinating and overseeing various teams and activities within the company.

Mr. Maphanga possesses a profound understanding of the South African B-BBEE ecosystem and provides consultation to diverse clients across the entire B-BBEE spectrum. Over time, he has emerged as a thought leader on B-BBEE legislation and its interpretation. Moreover, he maintains excellent relationships with the Department of Trade and Industry (DTI) and the B-BBEE Commission, positioning him at the forefront of advising and guiding some of South Africa’s largest firms in their pursuit of achieving B-BBEE goals. As an added value to the company, Allan offers on-the-job mentorship and training to junior consultants within the EconoBEE business.

Dr Muriel Mushariwa

Muriel is a highly qualified and experienced academic who has spent many years in formal academia, both in research as well as lecturing. Armed with a Phd in Law (Affirmative Action) and a Master’s degree in law, Muriel has made a successful transition into the corporate and business world having joined EconoBEE in February 2019. She is one of the leading minds in South Africa within the B-BBEE and transformation industry and has provided independent opinions in respect of several B-BBEE related rulings. She further provides strategic business and management consulting to small, medium and large corporates on various aspects relating to Black Economic Empowerment, transformation and inclusivity. This includes Employment Equity, Skills Development, B-BBEE Strategy, B-BBEE Legislative Codes as well as B-BBEE Consultation and Verification. Muriel also lectures at Wits University on the subject of B-BBEE and transformation and has been featured in various media publications as well as appearing on television to discuss the critical importance of B-BBEE, its various applications across the different business sectors and the practical implementations required to transform the business landscape of South Africa.

Ndivhuwo (“Ndi”) Rambau

Ndi’s journey with EconoBEE commenced in 2015, joining as a junior team member in the data management and client consulting division. With a qualification in Financial Management and an unwavering ‘can-do’ attitude, Ndi embarked on a remarkable trajectory within EconoBEE, steadily ascending the corporate ladder over the years. This remarkable progression culminated in Ndi’s current roles as the Operations Director and Chief Operations Officer at EconoBEE. In these capacities, Ndi dedicates his time to collaboratively working with fellow executives and senior management, charting strategic growth objectives for the company. His responsibilities encompass a wide spectrum, including conducting strategic financial analyses, managing technical strategies, and ensuring efficient operational implementation.

Ndi boasts a profound comprehension of the intricacies within the South African B-BBEE ecosystem, coupled with an acute awareness of the essential B-BBEE requisites that our clients need to adhere to.

6Aug, 2023

Transforming the Property Sector: Insights from Dr. Muriel Mushariwa

“The property sector is one of the least transformed sectors almost 30 years into democracy,” says Dr. Muriel Mushariwa, our esteemed Executive Director at EconoBEE, a management consultancy specializing in B-BBEE, skills development, and employment equity.

Dr. Mushariwa’s valuable contributions to the 2023 Sanlam Gauge Report shed light on critical areas for improvement. While the property sector has made some progress, there remain challenges in achieving true transformation. Read her comments here

Join Dr. Muriel Mushariwa and the EconoBEE team as we call for increased empowerment and opportunities for historically disadvantaged individuals in the property sector. Together, let’s work towards a future where the industry is inclusive, diverse, and representative of all South Africans.

Stay tuned for the full report on our website, where Dr. Muriel Mushariwa’s insights and contributions will be highlighted (on page 75 and 76 of that report). Let’s take steps towards a truly transformed property sector that benefits the entire nation. #TransformationMatters #EconoBEE #PropertySectorTransformation #SanlamGaugeReport #EmpowermentInProperty

2Aug, 2023

Excerpts from the 2023 Sanlam Gauge Report

5Jul, 2023

Empowering Your Business Through B-BBEE Workshops and Training

Today, we want to shed light on the importance of B-BBEE (Broad-Based Black Economic Empowerment) workshops and training, and why partnering with EconoServices for comprehensive training can drive transformative change within your organization.

Why B-BBEE Workshops and Training Matter:

B-BBEE is a crucial framework for promoting economic transformation and equality in South Africa. It serves as a powerful tool to address historical inequalities and promote meaningful participation and empowerment of previously disadvantaged individuals and communities. To fully grasp the legislation, codes of good practice, and compliance requirements, it is essential for businesses to invest in workshops and training programs. This knowledge equips your team with the tools to navigate the complexities of B-BBEE effectively and contribute to a more inclusive economy.

At EconoServices, we understand the significance of staying up-to-date with B-BBEE requirements. Our workshops and training programs are designed to provide comprehensive knowledge and practical insights that will enable your organization to implement successful B-BBEE strategies and achieve your transformation goals.

Benefits of Choosing EconoServices for Training:

Comprehensive Training
Customized Approach
Expert Facilitators
Empowered Pillar Champions
Enhanced Compliance
Competitive Advantage
Ongoing Support

For more information on benefits and other pertinent please click here

In conclusion, partnering with EconoServices for comprehensive training will equip your team with the knowledge, skills, and confidence to drive positive change, meet compliance requirements, and gain a competitive advantage.

Take the first step toward empowering your business today. Reach out to us on 011 483 1190 to learn more about our tailored training programs and how EconoServices can support your B-BBEE journey. Together, we can make a difference and contribute to a more equitable and prosperous South Africa.

4May, 2023

ESD Interview with Dr Mushariwa and a brief look at MAC Sector Codes

ESD Interview with Dr Mushariwa

Dr Muriel Mushariwa from EconoServices and Zevoli Growth Partners sat down to discuss the challenges faced by companies in fulfilling Enterprise and Supplier Development programmes that are impactful and value adding.

EconoServices is committed to providing value-added assistance to our clients that fulfils the remit of Enterprise and Supplier Development programmes and Zevoli Growth Partners seeks to create a user-friendly app that assists companies to monitor and implement their ESD hassle free.

Contact us on 011 483 1190 or info@econobee.co.za to find out how we can assist you with Enterprise and Supplier Development.

Fireside Chat Episode 1

A brief look at MAC Sector Codes

As the meaning of Turnover in the Marketing, Advertising and Communications (MAC) codes is not the same as other sector codes, there is a debate on how we define cost of sales due to the very different ways in which MAC sector clients operates.

Turnover – is defined as total sales less cost of sales.

Cost of sales is restricted to third party costs that result in the execution of ideas on which agencies earn remuneration

An invitation notice to the public and interested stakeholders to provide inputs to review the current MAC Sector Code has been published in a previous government gazette – EconoBEE has answered this call and submitted our response to this notice and we will keep our clients informed of any new developments on this front. It is hoped that the MAC Sector Council will soon provide clarity on this issue.

30Nov, 2022

Recent Constitutional Court Ruling and what this means for B-BBEE in 2023!

The Constitution of South Africa is the highest law in the land. The Constitution places an obligation on the State in terms of section 9 (the equality clause) to specifically “redress the inequalities of the past.” This is the aim of all transformative legislation from the Employment Equity Act to the Skills Development Act and Broad-Based Black Economic Empowerment Act, amongst others.

In terms of section 217 of the Constitution, the Constitution requires procurement by organs of state and statutory institutions to be fair, equitable, transparent, competitive and cost-effective and implemented in a manner which seeks to protect or advance previously disadvantaged persons. S 217 (2) allows organs of state to implement procurement policies, providing for categories of preference to advance or protect persons disadvantaged by unfair discrimination (“HDIs”). S 217 (3) provides for the enactment of legislation to prescribe a framework within which the procurement policy referred to in S 217(2) must be implemented.

The ruling by the Constitutional Court has forced the government to review both the PPFA Act and its regulations to ensure alignment with the Constitutional mandate stated above and the B-BBEE Act. This does not invalidate the B-BBEE act. The framework of the B-BBEE and how it’s practicable is clear and therefore not affected by the recent constitutional ruling.

This is not the end of B-BBEE as debated in the media recently. The Constitutional mandate to transform the economy still remains! The Public Procurement Bill is set to be introduced in 2023: This will provide a new framework of government procurement, with each department creating its own procurement framework work that must still be in line with the Constitutional mandate and the B-BBEE Act.

It does not mean B-BBEE is no longer important but rather the setting of new objectives, and so companies should still be compliant to the B-BBEE Act and its objectives. We continue to advise our clients to remain compliant in terms of the specific codes applicable to them, until greater clarity is given on the framework within which public procurement specifically will change. Procurement between private companies is still driven by the objectives of the B-BBEE Act.

The key here, is to implement activities that make business sense! Do you see B-BBEE as a grudge purchase? Or do you want to make a genuine difference in South Africa and still grow your business? Contact us now to show you how our revolutionary managed service has helped thousands of clients implement sustainable B-BBEE activities in a way that makes perfect business sense!

Being one of the oldest B-BBEE consultancies, we have seen all the changes to the legislation and been there through it all. With success stories of skills development and enterprise & supplier development, we know that we can give you strategic advice that can be implemented within your business.

Looking forward to growing our economy and your business, one step at a time in 2023!!

5Nov, 2022

Amended Construction Sector Codes Affidavits Explained

As per the Amended Construction Sector Code, gazetted on 1 December 2017 under Gazette no. 41287, an entity that qualifies for measurement under the Construction Sector Code, is measured either as a BEP (Built Environment Professional) or a Contractor in respect of targets, weightings and methodology.

The qualification criteria for an Exempt Micro Enterprise (EME) and a Qualifying Small Enterprise (QSE) are different for BEP’s and Contractors:

Contractors:

EME – Enterprise with a total annual revenue of R 10 million or less.
QSE – Enterprise with a total annual revenue of more than R 10 million but less than R 50 million.

BEP (Built Environment Professionals):

EME – Enterprise with a total annual revenue of R 6 million or less.
QSE – Enterprise with a total annual revenue of more than R 6 million but less than R 25 million.

Only EME’s with an annual revenue of less than R 3 million (for Contractors) and less than R 1.8 million (for BEP’s) are not required to have a SANAS accredited B-BBEE Verification Certificate and may present an Affidavit or Certificate issued by CIPC in respect of their Ownership & Annual Revenue.

A company must ensure that they use the correct Affidavit template when completing an Affidavit, as there are numerous templates for each sector.

The entity must identify where more than 50% of their revenue is generated and according to the outcome, they can determine whether they qualify as a BEP (Built environment Professional) or Contractor.

The EME’s as mentioned above are not subject to the discounting principle and therefore do not have to comply with the 40% sub-minimum requirements for the QSE Skills Development element.

EME’s with an annual turnover of more than R 3 million but less than R 10 million (for Contractors) and more than R 1.8 million but less than R 6 million (for BEPs) must obtain a SANAS Accredited B-BBEE Rating Certificate and are subject to the QSE Skills Development element (40% sub-minimum requirement).

An Entity that qualifies as an EME, with the Black Ownership percentages as indicated below, is deemed to have the following B-BBEE Status Levels:

If less than 30% Black Owned, Level 5 B-BBEE Status.
At least 30% Black Owned but less than 51% Black Owned, Level 4 B-BBEE Status.
At least 51% Black Owned but less than 100% Black Owned, Level 2 B-BBEE Status.
If 100% Black Owned, Level 1 B-BBEE Status.
EME’s with less than 100% Black Ownership can enhance their B-BBEE Status by way of one of the following three criteria:
Obtain measurement in terms of the QSE Scorecard.
Obtain measurement in terms of the Skills Development expenditure category of the QSE Scorecard and only if full points (excluding the bonus points) are achieved, the B-BBEE status level will be enhanced by one Level.
Obtain measurement in terms of the Supplier Development expenditure category of the QSE Scorecard and only if full points are achieved, the B-BBEE status level will be enhanced by one Level.

If an EME achieved full points for both Skills Development & Supplier Development as mentioned above, the company can be enhanced by two B-BBEE status levels.

An Entity that qualifies as a QSE, must be rated on all 5 elements as per the Amended Construction Sector QSE Scorecard.

A QSE can qualify for enhanced recognition if the following Ownership percentages are achieved (calculated by applying the flow-through principle):

At least 51% Black Owned but less than 100% Black Owned, Level 2 B-BBEE Status.
If 100% Black Owned, Level 1 B-BBEE Status.
A QSE entity that is at least 51% Black Owned or 100% Black Owned must comply with the QSE Skills Development element (40% sub-minimum) or that company will be discounted by one Level.

It is important to note that the Black Ownership as stated above, must be calculated by applying the Flow-Through Principle to qualify for the automatic B-BBEE status levels as indicated above.

As for the EME’s, a QSE Entity with at least 51% Black Ownership can be enhanced by one level if they achieve full points (excluding bonus points) for Skills Development as per the QSE Scorecard or achieves full points for the Preferential Procurement & Supplier Development element as per the QSE scorecard.

Want more information about the amended construction sector codes and what this means for your B-BBEE Scorecard? Contact EconoBEE now to help guide you with cost effective strategies to maximise your scorecard and ensure your compliance to the objectives of the B-BBEE Act.

29Sep, 2022

Labour Law and Transformation: EconoServices does it all!

Running a successful business requires you, as the business owner, to not only manage your clients, but also your staff.

Labour law is a constantly evolving and changing area of staff management and it is crucial that companies put in place policies and procedures that are updated and aligned to the current law.

EconoServices has seen the need within our clients, to provide this HR service and so we are pleased to announce our new service offering!

We are now able to provide training and consulting services with regards to:

Basic Conditions of Employment Act
Labour Relations Act
Employment Equity Act
Compensation for Occupational Injuries Act.

So, please contact us today and let us help you with all of your transformation needs!

29Jul, 2022

EconoServices Welcomes B-BBEE Advisory Council and the Drafted Legal Sector Code is out!

EconoServices welcomes the introduction of the newly instituted Broad-Based Black Economic Empowerment Advisory Council

The President of South Africa has recently appointed a diverse and representative group of people with sector expertise to serve as members of the Broad-Based Black Economic Empowerment Advisory Council and to guide government on intensified transformation of the economy. The President has appointed 14 Council members in terms of Section 6(1) (d) of the Broad-Based Black Economic Empowerment Act (Act No 53 of 2003). The appointments are for a period of five years.

The Council is made up of a diverse group drawn from business, trade unions, community-based organisations and academia. We trust that the Council will bring much needed clarity and stability in terms of interpretations of the Broad-Based Black Economic Empowerment Act.

In other news, Cabinet has approved the publication of the Draft Legal Sector Code (Draft LSC) for public comment, currently the legal profession does not have a sector specific code to guide them in addressing the imbalances and inequalities in the profession. It is important that Law firms familiarize themselves with the draft codes and prepare for when the Legal Sector code is promulgated.

If you are a law firm needing assistance on how best to navigate the impending codes, please reach out to us on 011 483 1190 (or on email info@econoservices.co.za) for assistance in strategy planning.

7Jun, 2022

Penalties for Employment Equity Contraventions!

Penalties for Employment Equity Contraventions!South African companies are currently facing penalties for failing to meet the targets set in their Employment Equity (EE) plans. We are now seeing the Department of Labour ramping up its auditing and has stated that the majority of companies with March 2022 year-end, have missed the mark in terms of complying with EE legislation.

One of the reasons for companies being fined and penalised is that their EE plans are not conforming with the goals and numerical targets set by the designated employers and therefore not projecting rational progress towards transformation. It is therefore prudent that companies avoid setting targets in their EE plans that are not attainable.

EconoBEE specialises in Employment Equity Services and is therefore well-equipped to assist companies accurately when it comes to compliance in terms of EE plans.

EconoBEE also hosts and runs workshops on Employment Equity in which we advise companies and their relevant staff members on how they can comply with EE legislation

For more information on our EE assistance and training and workshop offerings, please contact us on 011 483 1190 or email info@econobee.co.za

24May, 2022

Calling for YES Implementation Partners and a quick look at Preferential Procurement in 2022

Calling for YES Implementation Partners!

Does your company need extra staff, but there isn’t any budget to accommodate this need? Contact us on 011 483 1190! We are looking for companies who want to host and provide quality work experience for youth as part of the YES initiative, for a 12-month basis. You will not be required to pay a stipend as this will be provided for.

Youth unemployment is one of South Africa’ s greatest scourges, keeping millions of youth disenfranchised, desperate, and disillusioned about their future. Through the YES Initiative, youth from across the country are able to get that first chance at playing an active role in resetting the economy.

Become an Implementation Partner and part of a national initiative that is creating youth work opportunities and changing the lives of our young people for the better!

Is Preferential Procurement gone forever? Let’s find out…

On Wednesday, 16 February 2022, the Constitutional Court handed down judgment in the application for leave to appeal against a judgment and order of the Supreme Court of Appeal. This application was brought by the Minister of Finance against Afribusiness, with concerns of the validity of the Preferential Procurement Regulations, 2017 (Procurement Regulations) decreed by the Minister on 20 January 2017 in terms of the Preferential Procurement Policy Framework Act (Procurement Act).

In a nutshell, the Procurement Regulations, amongst other things, introduced pre-qualification criteria to be eligible to tender. Under the Regulations, if an organ of state elects to apply the pre-qualification criteria, any tender that does not meet the criteria is an “unacceptable tender”. These qualifying criteria advance certain designated groups and provide that only certain tenderers may respond, including: tenderers having a stipulated minimum Broad-Based Black Economic Empowerment (B-BBEE) status level; exempted micro enterprises (EMEs) or qualifying small enterprises (QSEs), and tenderers subcontracting a minimum of 30% to EMEs and QSEs which are at least 51% black owned. If feasible to subcontract for a contract above R30 million, then the organ of state must apply subcontracting to advance the designated groups.

The preferential procurement act allows for all entities to tender and only during the selection process will the pre-qualifications be considered on the basis of affording small black owned entities to gain access into main stream economy due to being previously disadvantaged. The Department of Health amongst other government departments have confirmed that the suspension of the preferential procurement is a temporary adjustment and changes can be made. Although it is not known how long this suspension will be, we urge all entities to always be ready for anything and ensure that their B-BBEE Compliance status have met the pre-qualification.

Want more information about what this means for your business? Contact EconoBEE now on 011 483 1190 (or email info@econobee.co.za) to help guide you with cost-effective strategies to maximise your scorecard and ensure your compliance to the objectives of the B-BBEE Act.

17Apr, 2022

Bridge the” GAP”

A gap analysis is a method of assessing the differences in performance between a business’ information to determine whether business requirements are being met and, if not, what steps should be taken to ensure they are met successfully. Below are some pointers where a B-BBEE “Gap Analysis” is concerned:

Supplier Development:

Supplier Development assists the financial and operational growth of a supplier from your database.
Once you have identified the “right fit” beneficiary for your business and you have established a mutually beneficial relationship, the next step is to identify the correct method of support.
There are many ways to support beneficiaries including monetary and non-monetary. Most businesses choose a monetary method due to time constraints.
Monetary contributions can be done in various ways. Grant contributions, discounts allowed in addition to normal business practice, overhead costs incurred in supporting enterprise development and supplier development as well as loans.
Regarding loans, you need to be vigilant about the benefit factor of the two different types of loan contributions. On interest-free loans you will get 70% recognition based on your outstanding amount and on standard loans you will get 50% recognition of your contributions.
The best way to manage a loan is to take the interest-free option and apply it over a period of 5 years. Due to the “outstanding loan amount” rule in the B-BBEE codes of good practice, you will receive recognition for the 5 years based on one contribution you have made.

Enterprise Development

Same as Supplier development, but this entity should not be on your supplier list yet but can graduate to become a Supplier for bonus points on the B-BBEE scorecard.

Skills Development:

The new codes demand far greater investment in skills development with a particular emphasis on accredited training and learnerships.
However, a business can make this work to the company’s benefit by:
- Using Skills development to develop the skills necessary to excel in business
- Invest in your people to retain them longer
- Create ladders of learning that create career paths
Choosing an experienced partner in implementing such programmes is essential to making these programmes a success.

EconoServices has advanced systems in place which specialize in minimizing these risks for our clients. We have only included a few examples above of what can be done – our dedicated consulting team is standing ready to help you and your company to “bridge the GAP”!

So, give us a call today on 011 483 1180 and let us help you put together and implement the best, most cost-effective, B-BBEE solutions and strategies for your business!

15Mar, 2022

EconoBEE wins a YES Programme related Case for our Client!

The YES4Youth Programme is a fantastic initiative that is focused on eradicating the high unemployment rate amongst South African Youth. The programme encourages companies to provide unemployed Youth with 12-month work experience (that can be added to their CVs), as well as possible permanent placement within their ranks. However, as it relates to B-BBEE, there are still a few points that need to be cleared up:

Can accommodations be made for extenuating circumstances?

EconoBEE recently experienced a unique situation in that a company had embarked on their second year of the YES Programme as a QSE. They had met all targets identified on the QSE Scorecard in order to maintain their Level 2. However, after the financial year ended, the financial statements stated that this company’s turnover exceeded the QSE threshold, therefore making them a Generic. As a result, this company had not been able to maintain the Level 2 as planned.
This resulted in the verification agency not awarding the company their YES Benefit.
EconoBEE decided to take this scenario to the DTI on our clients behalf, we presented the evidence to show that had the company’s turnover stayed in their QSE threshold, they would have maintained the Level 2.

We won the case, and our client was able to add the YES Benefit to their scorecard!

Who qualifies to use the YES Programme and obtain B-BBEE Benefit?

First time companies must achieve a compliant B-BBEE Certificate in order for the YES Programme to be applied at audit stage.
If a company would like to continue with the YES Programme for a second year, said company would need to maintain (or improve on) their previous B-BBEE Level. Therefore, if you achieved a Level 4 in your first year using the YES Programme, you will have to maintain the Level 4 in the second year.
Should the previous level not be maintained after verification, the YES Benefit will not be awarded.

Does the YES Programme work according to a Company’s Financial Year (much like B-BBEE does)?

Like B-BBEE, the YES programme does rely on a company’s Financial Year, however this is only in relation to the payments and registration. All payments to the YES Programme (Company Registration Fees as well as Youth Registration Fees), must be paid to the YES Programme before the end of a company’s financial year.
In addition to this, all Youth should also be registered on the system within the same Financial Year.
The financial year referenced above, would be the same financial year that a company would be verified on for B-BBEE purposes, which is why these payments need to be made in the same year.

Duration of the YES Programme:

The YES Programme is a 12-month Programme and the B-BBEE benefit can only be awarded in the below instances:
Year 1: any company that is implementing YES for the first time can be awarded the B-BBEE benefit immediately, without the Youth needing to complete a minimum number of months.
Year 2 and Beyond: any company that continues on the programme from year 2, will need to ensure that the YES candidate complete a minimum of 8 months on the programme (each year) in order to be awarded the Yes benefit.

Contact EconoBEE now to help guide your company with cost-effective strategies to maximise your scorecard and ensure your compliance to the objectives of the B-BBEE Act.

1Mar, 2022

Successful Submissions have an excellent Return on Investment!

Successful submissions of your Work Skills Plan and Annual Training Report can provide excellent Returns on your Investment!

The window period for submission of the WSP and ATR has opened for some of the SETAs, generally SETA submission window period is open until the 31^st of April annually. Without the approved WSP and ATR, Measured Entities will forfeit their skills development points.

Apart from B-BBEE , here are some of the ROI on successful WSP and ATR submission:

A mandatory grant to the value of 20% of your annual SDL.
The opportunity to apply for Discretionary Grants as the year unfolds.
It is an opportunity for companies to plan for and develop specific skill set requirements, ensuring both businesses and employees the opportunity to grow.

For measured entities without a skills development facilitator, EconoBEE is offering essential SDF services to help you manage the skills development element for you:

We can act as an external SDF for your company.
We can support your internal SDF with strategic insight and back-end administrative support.

9Feb, 2022

Transformation of the Property Sector

The Property Practitioners Act (No 22 of 2019) (PPA) seeks to ensure the transformation of the property industry by facilitating the inclusion of previously disadvantaged South Africans within the property sector. The Act also provides that once it commences, the Property Sector Transformation Charter will apply to all Property Practitioners. The Act was signed into law by President Cyril Ramaphosa in 2019 and came into effect on the 1^st of February 2022. Section 20 of the PPA states that when procuring property-related goods and services, all organs of state must utilise the services of property practitioners who comply with the Broad-Based Black Economic Empowerment and Employment Equity legislation and policies. Furthermore, the Property Sector Transformation Fund (PSTF) has been established to offer grants to further transformation within the property industry. Are you a property company committed to transformation? Unsure of how the Property Sector Transformation Charter and the Property Practitioners Act will affect you or your company? Please contact us on 011 483 1190 and let us help you become compliant, navigate PPA / PSTC, and implement cost-effective, B-BBEE solutions and strategies that make business sense!

21Jan, 2022

“Clarity” Regarding SANAS Letter

Any verification undertaken from the 15^th of August 2020, should be done so in such a manner that it does not exceed a period of 12 months from the most recent Financial Year – End. This was the subject of the SANAS clarification letter dated the 6^th of April 2021 (which referenced a supporting SANAS email clarification dated the 14^th of August 2020 and attempted to “clarify” said email). Unfortunately, this letter did not shed light on how companies should address the following real issue that several companies have and may still face: what happens if a company is in the middle of a verification and their current financial year, ends? Does the measured entity continue to finalize their verification or must the entity stop the verification immediately? You may say, that company should have planned the verification to start (and end) sooner! However, as consultants, we know that in certain instances, getting a company verified (and completing the verification quickly) is not always as easy as that, for instance:

In this “new normal” we find ourselves in, companies may have employees working from home and not always easily accessible.
Integral people to the verification may get sick and therefore be unable to provide information.
Loadshedding, internet connectivity and other factors also contribute to delays.

It is therefore necessary for SANAS to provide a comprehensive statement so that there is no uncertainty for measured entities, verification agencies or consultants. Failing that, consultants should also be given access to ask SANAS questions or perhaps there should be one body that regulates all consulting firms and who can then provide more guidance in terms of the clarification(s)? When it comes to understanding the B-BBEE legislation and implementing the interpretation thereof, EconoBEE is dedicated to coming up with innovative transformation strategies for our clients that make business sense. Please feel free to reach out to us on 011 483 1190 or info@econobee.co.za if you would like to hear more.

9Dec, 2021

Tis the season . . . for B-BEEE!

EconoBEE would like to wish our clients, suppliers and you, dear reader, a very safe, joyful and peaceful festive season and New Year.

We will be closing our offices on the 15^th of December 2021 and be back to championing B-BBEE, EE and SD for our clients on the 3^rd of January 2022. During this period, should you have any queries, please email us using: info@econobee.co.za

We have some exciting line-ups for 2022 . . . !!

We are launching our bespoke online / virtual and face-to-face workshops on Broad-Based Black Economic Empowerment, Employment Equity and Skills Development, tailored to your individual or corporate needs! We will provide more information regarding this in subsequent newsletters, in the meantime and should you have any queries, you are most welcome to give us a call on 011 483 1190 or email us using: info@econobee.co.za

9Nov, 2021

Happy News to end off 2021

It is with great pleasure that we announce that EconoBEE is officially 51% Black owned and is the leading Black Economic Empowerment (BEE) Strategy and Management Consulting firm in South Africa.

Founded in 2000, EconoBEE is a highly specialised, niche corporate advisory business that specialises in providing companies with Research, Advice and Structuring services in the areas of Corporate Regulatory Compliance within the Broad-Based Black Economic Empowerment (B-BBEE), Employment Equity (EE), Transformation, Enterprise and Supplier Development (ESD) and Skills Development (SD) ecosystem. As a 51% Black Owned EME, EconoBEE is a Level 2 BEE compliant company with a total recognition score of 125%. As a visionary organisation within the South African BEE context, the company’s strategic goal is to ease the legal, compliance and administrative burdens and legislative shortcomings of its clients, whilst assisting in their growth endeavours. EconoBEE makes use of highly sophisticated, state-of-the-art technology software to analyse their client’s corporate ownership structures. This is further bolstered by an in-depth set of Gap Analyses in the formulation of scorecards that essentially measure the success of their clients’ strategic endeavours and corporate goals. Our team is made up of a team of consultants with a mixture of legal and commercial qualifications. EconoBEE’s revolutionary consulting concepts and analytical management methodologies has resulted in the business, as well its brand, becoming one of the most recognized in the areas of Transformation and Broad-Based Black Economic Empowerment in South Africa.

We look forward to growing EconoBEE to greater heights as we begin this new journey.

27Oct, 2021

Sector-Specific EE Targets: Are You Ready?

The Commission of Employment Equity is currently in consultation with industry stakeholders to finalise the highly-anticipated Employment Equity Draft Amendment Bill. One of the key features of the bill will be introducing tailored Economically Active Population (EAP) targets. For employment equity compliance, this will be a simple exercise that may affect designated employers’ quantitative analysis and numerical targets for each occupational level.

Due to the inter-relatedness of B-BBEE legislation and employment equity regulations, there may also be changes in management control (Statement 200) and skills development (Statement 300), as these elements include EAP targets to allocate the points you may earn. As your consultants, we have deliberated on these amendments and have strategic ideas on how best you can manage these coming changes. Give us a call at 011 483 1190 or email: info@econobee.co.za to find out how we can prepare you in advance!

13Oct, 2021

Yes, Fronting is a Criminal Offence!

A recent ruling by the B-BBEE commissioner has brought into sharp focus the misunderstanding with regards to the legitimate beneficiaries of B-BBEE. https://www.bbbeecommission.co.za/vicky-adey-consulting-cc-withdraws-from-government-panels-and-surrenders-for-cancellation-its-cidb-grading-for-misrepresentation-of-b-bbee-status/ For B-BBEE purposes, the definition of black is very specific and in terms of the Broad-Based Black Economic Empowerment Act (B-BBEE Act) the definition of “black people” is given as follows: “Black people is a generic term which means Africans, Coloureds and Indians–

Who are citizens of the Republic of South Africa by birth or descent; or
Who became citizens of the Republic of South Africa by naturalization-
- Before 27 April 1994; or
- On or after 27 April 1994 and who would have been entitled to acquire citizenship by naturalization prior to that date.”

In the Vicky Adey consulting case, the facts were as follows: Vicky Adey Consulting CC claimed to be 100% black owned however, the alleged black ownership actually included a Nigerian national (40%), who does not qualify to benefit under the B-BBEE Act, if one considers the definition of black people in section 1 of the B-BBEE Act, as mentioned above. The B-BBEE Act specifically defines black people to exclude any non-black South African citizens, foreign nationals and those black people that acquired citizenship by naturalisation after 27 April 1994. Hence it is critical to track the background of an entity’s owner(s) in order to determine compliance with and status within the B-BBEE Act. Further, based on the information, it appears that Vicky Adey Consulting CC may have accessed opportunities within the government on the basis of the misunderstanding and this company is now bound by the consequences of that ruling. The B-BBEE commission is clear Including foreign nationals in ownership as black violates the B-BBEE Act, is contrary to the objectives of the B-BBEE Act and amounts to misrepresentation which is a form of fronting in terms of the B-BBEE Act. Another instance where the legitimate beneficiaries of B-BBEE may be confused is when two foreign nationals – who both have permanent residence – are married and have a child in South Africa. In terms of the above definition, the child is not a citizen of South Africa and would thus not be a beneficiary of B-BBEE. In summary Is fronting a criminal offence? Yes! Under the B-BBEE Codes of Good Practice, fronting is now recognised as a criminal offence. If found guilty, businesses could face a fine of up to 10% of their annual turnover or up to 10 years in prison. Want more information about ownership and what this means for your B-BBEE Scorecard? Contact EconoBEE now to help guide you with cost effective strategies to maximise your scorecard and ensure your compliance to the objectives of the B-BBEE Act.

29Sep, 2021

What is Socio-Economic Development and why is it different to Corporate Social Responsibility?

In recent months, there has been some confusion surrounding the activities relating to Socio-Economic Development (SED) from a B-BBEE perspective, and Corporate Social Responsibility (CSR). Let’s look at the definition of each of these elements. Socio-Economic Development (SED) is defined in the B-BBEE Codes, as monetary or non-monetary contributions implemented for communities, natural persons or groups of natural persons, where at least 75% of the beneficiaries are black people. The objective of SED is the promotion of sustainable access to the economy for the beneficiaries. The most common contributions under SED are as follows:

Development programmes for black women, black youth, black disabled people as well as black people living in rural areas.
Support for education programmes, resources and materials at primary, secondary and tertiary education levels, as well as bursaries and scholarships.

Corporate Social Responsibility (CSR) is a self-regulating business model that helps a company become more conscious of the impact that they can have on all aspects of society, including economic, social and environmental. This means that in the ordinary running of a business, a company should operate in ways that enhance the society and the environment in positive ways. From the above definitions, it can be seen that while there can be an overlap in some of the activities for CSR and SED, it does not mean that these are the same initiatives. The focus of SED is to uplift specific black people and communities through targeted contributions that will provide the beneficiaries with access to the economy, through either Skills Development, Healthcare, or Early Childhood Development Programmes. While the focus of CSR is to be a good corporate social citizen. This includes running the company in an environmentally friendly manner, providing assistance in the form of donations to NPOs as well as hosting social events which raise awareness to social issues. While some of the contributions made under CSR can qualify as SED, we must not get these initiatives confused. These are two very different initiatives and in order to not lose out on B-BBEE points, SED activities must be aligned with what is outlined in the B-BBEE codes. To find out if your CSR is aligned to SED as defined by B-BBEE, please don’t hesitate to contact us at EconoBEE.

14Sep, 2021

Employment Equity Compliance vs Government Business

A new amendment to the Employment Equity Act will have serious implications for companies who plan to do business with government going forward. In terms of section 53 of the Amendment Act, measured entities will be issued with a compliance certificate for Employment Equity which is valid for a period of twelve months from the date of issue. The EE compliance certificate will be a prerequisite for access to contracts with the State and any of its organs; it will therefore be impossible for companies to do business with the government going forward without this certificate. In terms of proposed Employment Equity amendments, the criterion for non-designated employers is to comply with the national minimum wage or prove that they have been granted exemption and have no CCMA unfair discrimination awards against them. The criteria for designated employers will be to submit annual Employment Equity Reports, comply with the national minimum wage or prove that they have been granted exemption not to pay the national minimum wage, comply with their own annual Employment Equity targets and work towards the five-year sector specific Employment Equity targets. Please feel free to reach out to us on 011 483 1190 or info@econobee.co.za if you would like to hear more.

31Aug, 2021

Are you a Designated Employer and have to submit your Employment Equity Forms?

Are you uncertain as to whether you are required, by law, to submit your employment equity forms? The submission window to submit your employment equity forms opens up on the 1^st of September 2021. What is the current definition of a designated employer?

An employer who employs 50 or more employees,
Or an employer who employs fewer than 50 employees, but has a total annual turnover as reflected in Schedule 4 of the Employment Equity Amendment Act No. 47 of 2013.
Municipalities and organs of State
Employers can also volunteer to become designated employers in terms of section 14 of the EE Act.

TURNOVER THRESHOLD APPLICABLE TO DESIGNATED EMPLOYERS

Sector or subsectors in accordance with the Standard Industrial Classification	Total Annual Turnover
Agriculture	R6,00 million
Mining and Quarrying	R22,50 million
Manufacturing	R30,00 million
Electricity, Gas and Water	R30.00 million
Construction	R15,00 million
Retail and Motor Trade and Repair Services	R45,00 million
Wholesale Trade, Commercial Agents and Allied Services	R75,00 million
Catering, Accommodation and other Trade	R15,00 million
Transport, Storage and Communications	R30,00 million
Finance and Business Services	R30,00 million
Community, Special and Personal Services	R15,00 million

All designated employers must submit their employment equity reports every year. If you qualify as a Designated Employer and either: Supply incorrect information, do not comply with the Employment Equity Act requirements, or do not submit the documents on time, then the following could occur:

You may be fined heavily by the DoL – up to 10% of turnover depending on the severity of contravention.
The DoL may visit you and do a full audit on your company.

If you need help in preparing and submitting your employment equity reports or ensuring that your employment equity committee and documents are in order, please feel free to contact us at EconoBEE to assist.

17Aug, 2021

The ICT Sector: the complexity of definitions

The relatively new Information and Communication Technology (ICT) sector is made up of the manufacturing and services sectors whose main activities are linked to development, production, commercialisation, and intensive use of new technology. This sector is the fastest-growing sector within South Africa, however, there does exist a scarcity of participation of Black female-owned entities. The Amended ICT Sector draft codes were gazetted on the 27^th of October 2015 and, subsequently, the finalized Amended Sector Code was published in the Government Gazette on the 7^th of November 2016. However, the most alarming fact about the Amended ICT Codes is that a lack of definition exists within it. Hence, in the areas where the Amended ICT sector is silent, we refer to the DTI Codes. This has sparked several debates as the DTI (Amended Codes of Good Practice) were again amended on the 31^st of May 2019. A few examples of areas in contention include:

The SDF calculation
The absorption definition
The 2.5% learnership indicator

We had a meeting with the ICT council to discuss the above issues of debate and we were able to get an acceptable consensus on these and other issues.

Do you fall under the ICT codes? Would you like to have guidance on the above in terms of the priority element of skills development and in other matters?

Contact us and we can help you maximise your scorecard with minimal fuss!

3Aug, 2021

No “one size fits all” at verification

Verification is an audit process that is required in order for you to be issued with a B-BBEE certificate. All five elements of the scorecard are verified with supporting evidence. Verification happens through a SANAS accredited agency which is empowered through legislation to issue you with a valid B-BBEE certificate. There is a code of conduct and checklist that verification agencies need to abide by before issuing a valid B-BBEE certificate. There is definitely no “one size fits all” process at verification due to different interpretations of the codes by verification agencies. Due to our close relationship with six of the top verification agencies in the country, we know the different interpretations out there in order to guide our clients appropriately. We will detail below what we have learnt through the 20 years of verification experience, the “must-do list” to ensuring a stress-free verification process. Planning

You need to have a verification project plan to guide the process of verification.
You need to track your turnover and NPAT every month to ensure are you still a QSE or Generic as this will impact your score due to the different targets between a QSE and Generic scorecard. Any discrepancy with your NPAT will negatively impact the score.
Verification planning is a year-long project. You need to have your verification file ready two months before your planned verification (also keeping it in line with when your current certificate will expire). Leaving it to the last minute is problematic.

Format of information

Due to the checklist that verification agencies have, we can tell you before your verification what information will be required from you to claim points. However, the information will be required in a specific format to meet the standard of the verification agency. For example, an ID copy must be certified.

Sampled evidence

Certain evidence will be requested at verification stage that is not known until the verification agency has sampled under the elements of management control, procurement and skills development. This means you need to have the information ready and on hand depending on which staff members are sampled under management control. As some companies are working virtually this can waste time at verification if information is not readily available when sampled.

Software

It’s important to have a mock scorecard before you go for verification so you know what your likely level will be.
We are able to easily pick up when points have not been adequately awarded as we use similar software to verification agencies. Unless you know where to look, you can lose out on valuable points and your desired level. The verification agency is not under an obligation as an auditor to show you where you can earn more points, consultants are needed to fight for your points.

Are you preparing for verification? Let us help you to generate a mock scorecard to show you the level you are likely to get. We can also assist you in the preparation of a verification file to submit to the verification agency.

19Jul, 2021

Have you read: The 21st CEE Report?

The 21^st Commission of Employment Equity Report has been issued and it shed light on some Employment Equity developments. These are also in line with the Draft Amendment Bill that is still being reviewed in parliament. As expected, the report has updated EAP targets which are useful in the quantitative analysis of each management level. These have changed slightly from last year:

The commission has consulted most of the business sectors to set sectorial targets. The finance and business sector has finalised the discussions. Based on these developments, all designated employers should be proactive and review their EEA12 and EEA13 to be prepared. More changes are yet to come; give us a call to find out how best you can stay compliant with Employment regulations. Did you Know?

You don’t have to sell your company shares in order for you to earn points on the ownership scorecard. The B-BBEE codes allow for various means in which to earn points on ownership.
There are tax benefits that you can claim through specific forms of skills development. Let us show you how.
Long term strategies for enterprise and supplier development ensure you will earn points over several years regardless of unexpected changes to your NPAT.
The Amendment to the Employment Equity Act, which was recently released, has far stricter penalties for employers who don’t take EE seriously. Employers that don’t comply can expect strict enforcement and harsher penalties – fines of up to R2. 7mil or 10% of annual turnover.
You can maximize on the skills development scorecard without having to meet the target spend.
For absorption points you do not have to absorb all the learners trained to claim your skills development. Let us show you how this can be achieved.

POPIA Compliance We take both your privacy and the POPI Act seriously, and would like to inform you that EconoServices will continue to ensure that all measures are taken to safeguard your personal information. We have put in place measures to ensure compliance with the requirements of the POPI act to prevent and stop the following:

No unauthorized access to personal information
No damage, accidental loss, misuse or destruction of any personal information on our records

This will allow us in turn to continuously improve our systems in use and ensure we operationally continue within the legal framework of the act. Should you however, feel you would like to change your consent or information on record please feel free to contact our information officer Dr Muriel Mushariwa. You have the right to the following options in terms of your personal information:

Provide any updates such as address changes or contact details
To delete or remove your information
To inform us to stop contacting you

Should we not hear from you by 23 July 2021, we will take it that permission has been given to us to continue to retain the information and to continue to communicate with you. Regarding our mailing list: No action is required if you are happy to stay on our mailing list and it will be accepted that you have consented to staying on. If you change your mind at any time in the future, you will always have the option to unsubscribe. Best wishes and keep safe. The EconoServ Team

1Jun, 2021

The DTI’s new ruling on Trusts in B-BBEE Ownership Initiatives!

Dear Business Owner On the 29^th of November 2018 the BBBEE Commission came out with a guide entitled “Understanding the use of Trusts in B-BBEE Ownership Initiatives”. Two important issues were raised by the Commission in its guide: 1. The use of educational trusts as part of a BBBEE ownership Initiative. 2. The involvement of minors in BBBEE ownership trusts. The BBBEE commission held that the use of “under-age children as beneficiaries will be regarded as circumvention of the B-BBEE Act as they have no capacity to exercise rights flowing from such ownership.” With regard to educational trusts, the BBBEE commission held that “Beneficiaries cannot be selected each year to receive benefits in the form of dividends from the measured entity, for payment of their education, training or social upliftment projects which are matters that should be catered for under corporate skills development, social investments or socio-economic development” On the 17^th of May 2021 The Minister of Trade, Industry and Competition announced in a Practice Note on discretionary Collective Enterprises, such as employee share ownership plans (ESOPs) and broad-based ownership schemes (BBOS), a change to the above interpretation by the BEE commission. The Minister clarifies several issues of misalignment in interpretation on the issue of ownership. 1. Educational trusts can be used within ownership. The DTI has ruled that discretionary schemes making distributions in terms of skills development, training and education “to members of a defined class of natural persons does not in any way detract from the Economic Interest points claimable by or through these schemes” 2.In relation to ownership regarding minors, the DTI has ruled “without derogating from the generality of this statement, minors for example, are not restricted from being participants or beneficiaries in any way, whether as part of a defined class of natural persons or individually.” Clear rules of validity have been outlined for this form of ownership, in terms of the role of fiduciaries, discretionary powers, the class of persons, meaningful board participation; etc. As measured entities, you may have asked yourselves questions such as the following:

Since ownership is a priority element, how is the net value points going to be calculated or determined?
Will verification agencies interview minors as part of the B-BBEE verification process?
What is the balancing act that trustees need to ensure around net value and the purpose of the trust.

EconoBEE had a meeting with the DTI and we believe that the clarification received will address the queries above. Please contact us to hear what they said!

Category Archives: Black Economic Empowerment (B-BBEE)