BEE DESK OF EXPETISE 3 Augustus 2017
This report has been prepared with a view of the activities from the BEE Expertise desk as well as significant events during the past months. While this report will not include all activities, it does represent a summary of such.
The BEE commission become effective from April 2016 with various cases of fronting being investigated. The BEE Commission have issued 2 practice guides in 2016 and 3 in 2017 of which 1 was an explanatory notice. These guides and notices guides the way that BEE Rating agencies need to address uncertainties. The practice notes provide clarity of the intention of a principle or paragraph in the Amended Codes of Good Practice. All organisations who concluded a BEE ownership transaction of R25 mil. or more need to register it with the BEE Commissioner if it had taken place since 24 Oct. 2014.
Some uncertainties still exist and needs clarity. Demographic targets have been introduced under Management Control and Skills development in the Amended COGP.
However, the bee commissioner have indicated their willingness to engage all stakeholders and to issue guidance/practice notes where required.
The DTI has issued a draft statement for public comment and focus on the following: The DTI has appointed a new BEE regulator in their department on 21 July 2017. All accreditation of Rating Agents is expected to work with the currently existing accreditation body SANAS and be approved by the new regulator.
While this is still a draft, a lot of uncertainties have been created.
Last year there were more than 700 accredited Rating agencies who were accredited by either IRBA or SANAS. Only SANAS accredited agencies may currently conduct bee verifications with the withdrawal from IRBA. The accreditation process is lengthy and very expensive. Only 62 Rating agencies are currently SANAS accredited. None in the Free State. The risk of losing accreditation after six months also deterred many who were considering it not to go through that process. The cost for verification went up by 1/3 to 5o% of the previous costs.
PROPERTY SECTOR AMENDED CODE
The Property Sector Amended Code was published on 9 June 2017. A summary was sent to Hester for the AHI website.
ACTIVITIES OF THE BEE DESK OF EXPERTISE
The professionals in this panel shared a lot of interesting and useful information with AHI members over the recent months. These were sent to be published on the website. We wonder how many people read any of these and how many found it to be helpful? Consideration for a member survey may be helpful in this regard.
The Chairperson, Erna Steenkamp, Petrus du Plessis and the Vice president, Winda Austin-Loeve, of the AHI had a meeting with the BEE Commission on the 18th of July to address an issue of fronting which was introduced to a client of one of our members. This gave the AHI the opportunity to meet with the BEE Commission and build a relationship. Petrus du Plessis presented the submission to the Commissioner. The Commissioner agreed that the case was indeed fronting and would investigate it further. The Commissioner expressed their desire to engage with the AHI and the team will endeavour to meet with the Commissioner frequently. The BEE desk of expertise would like to encourage our members to visit the website of the BEE Commission when in doubt to advise on possible ownership transactions or other uncertainties before acting and be blamed for fronting. The BEE professionals on the panel could also be contacted if members are unsure of how the Codes should be implemented.
The BEE Commission welcomed the suggestion that the AHI add a link on the website of the AHI to the BEE Commission’s website for this purpose. There is a function to research frequently asked questions and answers. When a lot of the same questions need answers, the Commissioner would publish Practice Notes.
The BEE Commission wanted to know what the attitude of the members of the AHI are towards complying with the Amended Codes. The panel expressed the view that the members still needed a lot of training on the Amended Codes and indicated that most members would fall under the R10 mil. turnover threshold and don’t need to comply with the 5 elements of the scorecard.
The BEE Commission wanted to know if the AHI had any problems with the Amended Codes. Erna mentioned the trustworthiness of the affidavits for EME’s. The Commissioner’s view was that many fronting practices happened at the Rating agencies and that they do not trust them. They would find it easier to address fronting with the information on the affidavits, since it would be a criminal offence if a statement which constituted fronting was made under oath. The BEE Commission would not need to go through the verification agency to investigate further. Erna also mentioned that companies find it very difficult to address the requirement of the Enterprise and Supplier Development Plan to exclude Imports since most imported products cannot be manufactured in SA. The Commissioner expressed the need for companies to drive the process of SA manufacturing to create jobs and wanted us to encourage our members to communicate with the DTI to assist with information to set up factories for imported products to be manufactured in SA.
Petrus du Plessis, on behalf of the panel had addressed certain issues to the president of the AHI during our previous meeting with the DTI. The vice president undertook to address those and give feedback.
The BEE desk need to meet with the DTI and the BEE Commissioner on a regular basis and need the assistance of prominent black members of our organisation to accompany us on such visits.
Erna Steenkamp would like to suggest that we engage with Rating agents who are credible and do not accommodate fronting to become part of our team to build our credibility and expertise as Desk of expertise and as an organisation, but also give our members an opportunity to choose among a list of verification agencies whom operate above board rather than going to the market and not knowing who is credible or not.
Skills development is the one aspect which can be controlled to score BEE points and provide meaningful ways to transform the economy, but also enable companies to score points and be rewarded with grants back from SARS and the SETA’s.
The BEE Desk of Expertise has a panel of professionals with the knowledge and experience to assist AHI members with a strategic plan to address these aspects and are welcome to contact any of us in that regard.
The BEE Desk of Expertise aim to add value to our members, but it would be of no value if our members do not find our efforts valuable or engage with us to assist them with their BEE compliance. Can we measure that? Do we have that??
Hester Davis – Chairperson of Desk of Expertise – 0834578929 – 016 0180059
Erna Steenkamp – Chairperson BEE Desk: 083 268 2711, 011- 782 9693
Cobus Tomlinson - 082-566 6325, 013-744 0755
Petrus du Plessis – 012 658 5744 082 656 5518
Melcus Nel - 082 448 0356, 0861 124 668
Pieter du Toit - 072 418 7777, 012 997 0834