B-BBEE: DTI sheds some light on deadline for implementation of new Codes

On 8 July 2014 the DTI issued a “Statement of Clarification” (once again ignoring all constitutional requirements relating to the promulgation or amendment of legislative provisions) wherein it seeks to explain how the conundrum of having two sets of B-BBEE Codes of Good Practice will work. In our May newsletter we dealt with the issue of the application of the new Codes from May 2015 onwards to companies who obtained scorecards under the old Codes just before this deadline purely due to the timing of their financial year end. The DTI has now stated that “a B-BBEE certificate issued prior to the 1 May 2015 deadline will be valid for a period of 12 months from the date of issue.” This is all well and good but unfortunately the DTI did not avail itself of the opportunity to deal with the more fundamental problem of how such a scorecard will translate under the new Codes. As we explained in our May newsletter, there are elements on the new Scorecard that differ materially from the old Codes. Because the B-BBEE programme is supply-driven, this means that companies measured under the new Codes are going to need their suppliers to provide them with credentials that can be used under the new Codes. Unfortunately a scorecard prepared under the old Codes (which according to the DTI will be valid until 30 April 2016 at the latest) may not be sufficient for such purposes. We therefore suspect that, while companies will be able to use their scorecards prepared under the old codes in theory, in practice their customers and clients are going to demand that they prepare scorecards under the new Codes, which will mean that some companies will have to go through two verifications in the span of a few months.

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