Draft new BBBEE codes could see companies losing empowerment ratings under controversial amendment
The draft revised broad based black economic empowerment (BBBEE) codes unveiled by the Department of Trade and Industry (DTI) earlier today contain a controversial amendment which could result in a reduction companies empowerment ratings.
Safiyya Patel, partner and BEE expert at corporate law firm Webber Wentzel, said that the most sweeping proposed amendment is likely to be the introduction of sub-minimum targets for "priority elements".
Priorty elements include ownership, enterprise and supplier development and skills development.
"If the amendments are processed in their current form, companies will be required to achieve a minimum compliance of 40% of the targets for the priority elements.
"If they do not achieve the minimum compliance for any of the priority elements, their overall contributor status will be reduced by 2 levels if they are large entities or by 1 level if they are qualifying small enterprises. "