To help entrepreneurs gain better insight into the impact the revised codes could have on the way they do business, a new online platform is inviting the public to engage with B-BBEE specialists.
Launched last week, Codes Interpreter is a crowdsourcing discussion platform that invites credible B-BBEE professionals to impart “invaluable insight into the finer nuances of the new codes,” Bruce Rowe, CEO of Mpowered Business Solutions, the developer of Codes Interpreter, said in a statement.
Through Codes Interpreter, the public can engage with recognised B-BBEE specialists and use “voting buttons” to vote on the relevance and accuracy of experts’ interpretation of the codes.
Seth Randall, an executive at Mpowered Business Solutions, said the advent of the revised B-BBEE regulations and the overwhelming confusion over provisions in the new codes necessitated the need for the platform.
It’s also a voting mechanism that the public has to up or down vote the interpretation so we can start to reach a critical mass of what people feel is the most valuable stance.
“The thinking was that we could crowdsource on interpretations of the codes by BEE professionals who could then platform the correct understanding of the codes for the public and give the average person access to the expert skills of a BEE specialist.
“The site is an opportunity for BEE professionals to capture comments on their interpretations. It’s also a voting mechanism that the public has to up or down vote the interpretation so we can start to reach a critical mass of what people feel is the most valuable stance,” Randall said.
Visitors can also access a ‘knowledge centre’ where they can upload their own documents to provide additional insight into the B-BBEE codes.
The new version was gazetted in October and under the final codes, businesses will have a year, beginning 11 October 2013, to align themselves with the codes’ requirements. While there are no formal penalties attached to non-compliance of the targets set down in the codes, companies with poor BEE scores won’t be eligible to tender for government contracts and could battle to secure the necessary licences and permits from government.
The good news for small businesses and enterprises is that all businesses with an annual turnover of less than R10 million, irrespective of their black ownership level, will be characterised as an exempted micro enterprise (EME). As such, they will be exempt from paying between R30 000 to R40 000 to acquire B-BBEE verification certificates.
This was increased from an annual turnover of R5 million, which allows more small businesses to benefit from the exemption. Furthermore, EMEs are immediately awarded level-four BEE status regardless of their black ownership level, which means their clients can consider all of their purchases from EMEs as BEE procurement.
Businesses with a turnover between R10 million and R50 million are now considered qualifying small enterprises (QSEs) and will be measured on all five elements of the BEE scoreboard, namely: ownership; management control; skills development; enterprise and supplier development; and socio-economic development.
Mpowered Business Solutions also uses the Codes Interpreter platform to clarify the codes and make them easier for entrepreneurs to understand. For example, one of the biggest controversies to come out of the revised codes was a formula introduced by the Department of Trade and Industry (DTI) with regards to employment equity and skills targets.
Previously, any person of colour would have fulfilled the black quota, but under the revised codes, the black targets have been divided into different demographic groups, and organisations must reflect the ratio of individuals according to the formula.
“It was very contentious when it came out because, in essence, the formula achieved the opposite effect of what the department was trying to achieve,” says Randall. The company has subsequently launched its own proposed formula, which it believes will better achieve the intent of the DTI.
To find out more about the formula and weigh in on the discussion of codes, visit: www.codesinterpreter.co.za
Additional sources: Small Business Connect and the SA Institute for Race Relations