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BBBEE Codes of Good Practice and Procurement Regulations 24 November 2011 BBBEE Codes of Good Practice and Procurement Regulations 24 November 2011

Contents § Background § Alignment of Preferential Procurement Policy Framework Act and BBBEE Codes Contents § Background § Alignment of Preferential Procurement Policy Framework Act and BBBEE Codes of Good Practice § Frequently Asked Questions § Conclusions

Background CONSTITUTION “Equality includes the full and equal enjoyment of all rights and freedoms. Background CONSTITUTION “Equality includes the full and equal enjoyment of all rights and freedoms. To promote the achievement of equality, legislative and other measures designed to protect or advance persons or categories of persons disadvantaged by unfair discrimination maybe taken” Chapter 2 of the Bill of Rights, Section 9

Background CONSTITUTION Section 217 of Act 108 of 1996, as amended by subsection 3 Background CONSTITUTION Section 217 of Act 108 of 1996, as amended by subsection 3 of Act. 61 of 2001 provides that: - 1. When an organ of state in the national, provincial or local sphere of government, or any other institution identified in national legislation, contracts for goods or services, it must do so in accordance with a system which is fair, equitable, transparent, competitive and costeffective. 2. Subsection (1) does not prevent the organs of state or institutions referred to in that subsection from implementing a procurement policy providing for: § Categories of preference in the allocation of contracts; and § The protection or advancement of persons, or categories of persons, disadvantaged by unfair discrimination. 3. National legislation must prescribe a framework within which the policy referred to in subsection (2) may be implemented.

Background PPPFA Preferential Procurement Policy Framework Act No 5. of 2000/2: An Organ of Background PPPFA Preferential Procurement Policy Framework Act No 5. of 2000/2: An Organ of State must determine its preferential procurement policy and implement it within the following framework: § 80/20 and 90/10 preference point system must be followed, i. e. : - Ø 10 and 20 points - HDI Ø 90 and 80 points - lowest price.

Background B-BBEE ACT Section 10 of the B-BBEE Act: Every Organ of State and Background B-BBEE ACT Section 10 of the B-BBEE Act: Every Organ of State and Public Entity must take into account and, as far as is reasonably possible, apply any relevant code of good practice issued in terms of this Act in: - § Determining qualification criteria for the issuing of licenses, concessions or other authorisations in terms of any law; § Developing and implementing a preferential procurement policy; § Determining qualification criteria for the sale of state-owned enterprises; and § Developing criteria for entering into partnerships with the private sector.

Alignment of PPPFA Regulations and B-BBEE ALIGNMENT § Cabinet approved the alignment of Preferential Alignment of PPPFA Regulations and B-BBEE ALIGNMENT § Cabinet approved the alignment of Preferential Procurement Regulations and the B-BBEE policy § The Preferential Procurement Regulations of 2011 will come into effect on 7 December 2011. § While the alignment of Preferential Procurement Regulations and the B-BBEE policy is a step in the right direction, the ultimate objective is the total overhaul PPPF Act No. 5 of 2000

Alignment of PPPFA Regulations and B-BBEE ALIGNMENT B-BBEE PPPFA Regulations Beneficiary Black people Measures Alignment of PPPFA Regulations and B-BBEE ALIGNMENT B-BBEE PPPFA Regulations Beneficiary Black people Measures BBBEE 7 elements Automatic BEE Compliance (< 5 Million) Exempted Micro Enterprises New PPPFA regulations use the B-BBEE scorecard to determine preference points

Alignment of PPPFA Regulations and B-BBEE ALIGNMENT § The preferential Procurement Regulations are applicable Alignment of PPPFA Regulations and B-BBEE ALIGNMENT § The preferential Procurement Regulations are applicable to organs of state as contemplated in section 1(iii) of the PPPF Act and all public entities listed in Schedules 2, 3 A, 3 B, 3 C and 3 D of the PFMA and Municipal entities § The preferential Procurement Regulations will thus be extended to all organs of state for uniformity purposes. § The revised Regulations affirm the 80/20 preference point system for procurement of goods and service for a rand value of R 1 million and 90/10 preference point system above R 1 million § On 80/20 principle, 20 points scored by a bidder will be in respect of B-BBEE status level and 90/10 principle, 10 points will be in respect of B-BBEE status level.

B-BBEE Recognition Levels B-BBEE Recognition Levels

Alignment of PPPFA Regulations and B-BBEE CALCULATION OF POINTS FOR B-BBEE RATINGS Alignment of PPPFA Regulations and B-BBEE CALCULATION OF POINTS FOR B-BBEE RATINGS

Alignment of PPPFA Regulations and B-BBEE § In addition, the revised Regulations address the Alignment of PPPFA Regulations and B-BBEE § In addition, the revised Regulations address the objectives of Industrial Policy Action Plan, especially those aimed at promoting the procurement of domestically produced goods and services. § The Regulations empower the dti to designate specific industries of critical and/or strategic importance where such tenders should prescribe that only locally manufactured products will be considered or that only locally manufactured products with a prescribed minimum threshold for local content will be considered.

Frequently asked questions HOW DO I DETERMINE THE VALIDITY OF A BEE RATING CERTIFICATE? Frequently asked questions HOW DO I DETERMINE THE VALIDITY OF A BEE RATING CERTIFICATE? With effect from 1 October 2011, only B-BBEE status level certificates issued by the following are valid: § Verification Agencies accredited by the South African National Accreditation System (SANAS) (see Statement 005) § Registered Auditors approved by the Independent Regulatory Board of Auditors (IRBA) in accordance with the approval granted by the Department of Trade and Industry (see Statement 005) § Exempted Micro Enterprises- Statement 000, Section 4 of the B-BBEE Codes of Good Practice still applies for determining eligibility of a Exempted Micro Enterprise.

Frequently asked questions HOW DO I DETERMINE THE VALIDITY OF A BEE RATING CERTIFICATE? Frequently asked questions HOW DO I DETERMINE THE VALIDITY OF A BEE RATING CERTIFICATE? As at the end of September 2011 there are 78 SANAS Accredited Verification Agencies § Click on link for a list of all SANAS Accredited Verification Agencies http: //www. sanas. co. za/directory/bbee_default. php § Click on link of BEE verification agencies that are in possession of valid pre-assessment letter http: //www. thedti. gov. za/economic_empowerment/docs/verification/LOA_Preasses sments. pdf § There are No IRBA approved registered auditors yet!

Frequently asked questions HOW DO I DETERMINE THE VALIDITY OF A BEE RATING CERTIFICATE? Frequently asked questions HOW DO I DETERMINE THE VALIDITY OF A BEE RATING CERTIFICATE?

Frequently asked questions B-BBEE VERIFIED ENTITIES Click on link for example BEE Certificate_l. pdf Frequently asked questions B-BBEE VERIFIED ENTITIES Click on link for example BEE Certificate_l. pdf

Frequently asked questions HOW DO I DETERMINE ELIGIBILITY OF AN EXEMPTED MICRO ENTERPRISES (EMES)? Frequently asked questions HOW DO I DETERMINE ELIGIBILITY OF AN EXEMPTED MICRO ENTERPRISES (EMES)? § Any enterprise with an annual Total Revenue of R 5 million or less qualifies as an Exempted Micro-Enterprise. § Exempted Micro-Enterprises are deemed to have B-BBEE Status of "Level Four Contributor" having a B-BBEE procurement recognition of 100%. § In an instance were the Exempted Micro Enterprise is more than 50% owned by black people, the enterprise qualifies for a promotion to a B-BBEE Status of "Level Three Contributor" having a B-BBEE procurement recognition of 110%

Frequently asked questions HOW DO I DETERMINE ELIGIBILITY OF AN EXEMPTED MICRO ENTERPRISES (EMES)? Frequently asked questions HOW DO I DETERMINE ELIGIBILITY OF AN EXEMPTED MICRO ENTERPRISES (EMES)? § Sufficient evidence of qualification as an EME is o an auditor’s certificate (2011 EME Letter) or o certificate issued by an accounting officer, or o verification agency § Cost reduction and stifling growth at EME level § Biggest beneficiaries of B-BBEE through Enterprise Development and Preferential Procurement

Frequently asked questions JOINT VENTURE B-BBEE STATUS § A trust, consortium or joint venture Frequently asked questions JOINT VENTURE B-BBEE STATUS § A trust, consortium or joint venture must submit a B-BBEE status level certificate in order to qualify for points § A trust, consortium or joint venture will qualify for points as an unincorporated entity provided they submit their consolidated scorecard as prepared for each separate tender

Frequently asked questions HOW TO DETERMINE THE B-BBEE STATUS OF TERTIARY INSTITUTIONS § If Frequently asked questions HOW TO DETERMINE THE B-BBEE STATUS OF TERTIARY INSTITUTIONS § If a service is provided by only a tertiary institutions, such services must be procured from the tertiary institutions identified by means of bidding process. Tertiary institutions must submit their B-BBEE status in terms of the B-BBEE Codes of Good Practice’ Specialized Scorecard.

Frequently asked questions LOCAL CONTENT § Paragraph 9(1) of the draft Regulations empowers the Frequently asked questions LOCAL CONTENT § Paragraph 9(1) of the draft Regulations empowers the dti to designate specific industries where tenders should prescribe that only locally manufactured products with a prescribe minimum threshold for local production and content will be considered. This will come into effect after the dti has designated in line with national development and industrial policies. National Treasury will issue relevant instructions and guide § Where there is no designated sector, a specific tendering condition may be prescribed minimum threshold for local content will be considered in accordance with directives issued by the National Treasury in consultation with the dti.

Conclusion The broader economic developmental agenda must address inter alia: § Ensuring that BBBEE Conclusion The broader economic developmental agenda must address inter alia: § Ensuring that BBBEE contributes to the broader developmental objectives of government. § Create a conducive environment for access to economic opportunities § Promotion of entrepreneurial initiatives among the majority of South Africans § Alignment and consistency in policies, legislation and programmes of Government

List of Western Cape verification agencies and the sectors they are accredited to verify List of Western Cape verification agencies and the sectors they are accredited to verify BBBEE VERIFICATION AGENCY DETAIL RECORD SECTORS ACCREDITED NAME BODY NUMBER PHYSICAL ADDRESS TEL NO. CONTACT PERSON E-MAIL AQRATE (PTY) LTD BVA 021 2 ND FLOOR, WJ LOUW BLDG 021 949 4612 CHRIS VAN WYK [email protected] Qrate. co. za BBBEE Codes of Good Practice 7 OLD PAARL RD, BELLVILLE BBBEE RATING AGENCY BVA 074 18 A GANTS PLAZA 083 700 0049 MS M COETZEE [email protected] com BBBEE Codes of Good Practice BEE EMPOWERED & LABOUR CONSULTANCY BVA 057 LANGENEGGER STR, STRAND A 21, BLOCK 1 NORTHGATE ISLAND SECTION ROAD PAARDEN EILAND 021 511 0802 MS L FRANK [email protected] net BBBEE Codes of Good Practice BEE ONLINE (PTY) LTD BVA 038 087 750 6505 GAVIN FLETCHER gavin. [email protected] co. za BBBEE Codes of Good Practice BEE VERIFICATION AGENCY BVA 014 WILLEM MOSTERT [email protected] com BBBEE Codes of Good Practice CODEX RATINGS (PTY) LTD BVA 065 086 072 2222 021 975 3689 021 701 0470 JL POTGIETER [email protected] co. za BBBEE Codes of Good Practice 021 419 5130 DUNCAN DE GROOT [email protected] com BBBEE Codes of Good Practice 7 DIRK SMIT CRES MEYERSDAL 8 PARK STR DURBANVILLE C 3 A WESTLAKE SQ 1 WESTLAKE DRIVE, TOKAI EMPOWERDEX CTN (PTY) LTD BVA 141 14 TH FLOOR METROPOLITAN LIFE CENTRE 7 COEN STEYTLER AVE, FORESHORE, CT MINDWALK CONSULTING (PTY) LTD BVA 090 UNIT 5, ROTHERFIELD RD PLUMSTEAD 021 797 2444 NP HARTMAN [email protected] co. za BBBEE Codes of Good Practice SERA WC (PTY) LTD BVA 121 UNIT 101 A, EDWARD STR TYGER VALLEY 021 910 1110 MS SJ NEETHLING [email protected] com BBBEE Codes of Good Practice UKUTHENGA VERIFICATION SOLUTIONS BVA 116 44 HOPKINS STR PAROW 021 911 2906 JODY JANSEN [email protected] co. za BBBEE Codes of Good Practice IQUAD VERIFICATION SERVICES (PTY)LTD BVA 131 BELLVILLE 021 300 0013 ext 2 SAM ADAMS [email protected] co. za BBBEE Codes of Good Practice MOSELA RATING AGENCY BVA 080 20 WATERKANT STREET CAPE TOWN 021 418 4807 DANIELLE MINTOOR [email protected] co. za BBBEE Codes of Good Practice KBONGA BEE VERIFICATION BVA 022 7 Coen Steytler Ave 021 4940 Ms AN SIBISI [email protected] co. za BBBEE Codes of Good Practice AGENCY CAPE TOWN

Enquiries ☎ 0861 888 126 ☒ redtape@pgwc. gov. za www. westerncape. gov. za Enquiries ☎ 0861 888 126 ☒ [email protected] gov. za www. westerncape. gov. za