INTRODUCTION

Our country requires an economy that can meet the needs of all our economic citizens – our people and their enterprises – in a sustainable manner.  This will only be possible if our economy builds on the full potential of all persons and communities across the length and breadth of this country.  Government’s objective is to achieve this vision of an adaptive economy characterised by growth, employment and equity by 2014.

This is a pocket guide to the Codes of Good Practice on Broad-Based Black Economic Empowerment that were published in Government Gazette number 29617 on 9 February 2007. It is intended to assist the reader who wants to quickly refer to the various elements of the scorecards contained in the Codes and establish how points are allocated to these various elements. Furthermore, a summary of the method of calculating the points of the various elements is included. However, brevity dictates that not all the information required to complete all the formulae set out herein is included. Those requiring additional information about the Codes should either consult the Codes themselves or a suitably qualified advisor such as April 27 Corporate Finance (Pty) Ltd for assistance.

Many aspects of the Codes are open to different interpretations. This booklet reflects one such interpretation. Other interpretations are however possible. No rules of interpretation other than the general principles which govern the interpretation of statutes in South Africa exist. This position will, no doubt, improve over time.

The Codes are published in the terms of Section 9(1) of the Broad-Based Black Economic Empowerment Act, number 53 of 2003. No enterprise is compelled to comply with the Codes and certain types of enterprises are even exempt from compliance. The extent of an enterprise’s compliance may however affect its success in doing business with organs of the State, public enterprises and other enterprises that comply with the Codes.

The extent to which an enterprise complies with the Codes determines its BEE Status. This status is expressed with reference to different levels, as follows:

BBBEE Status

The Codes create 3 different categories of enterprises and set different compliance targets or scorecards for each such category.

The compliance scores of these different categories of enterprises are determined with reference to the following 4 different scorecards:

In addition, until 9 February 2008 a Measured Entity may use a transitional scorecard.   In terms hereof the score is calculated by multiplying the total score under Codes 100 and 200 by a factor of 1.92.  In the case of a QSE this is calculated by multiplying the total score achieved under Codes 801 and 802 by a factor of 1.18.

The content of the Codes is arranged in a manner that reflects to different elements of the scorecards, namely:

Arrangement of the Codes: