Understanding B-BBEE

The Broad-Based Black Economic Empowerment Act 53 of 2003 contains the Codes of Good Practice that when followed will result in Broad-Based Black Economic Empowerment (B-BBEE). A company’s compliance and status is measured against these seven elements:

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The answers to each of these questions are viewed as a proportion of ‘black’ investment to ‘non-black’ investment and result in a compliance level. The sum of all these elements of compliance forms a broad-based scorecard.

Five reasons to comply with B-BBEE

  1. pressure from customers
  2. individual companies achieve greater compliance when they purchase from suppliers with high compliance levels
  3. a compliant company will obtain a competitive advantage over its non-compliant competitors
  4. companies that do business with government departments are required by law to demonstrate compliance with the Codes of Good Practice – tenders, licences or concessions may be withheld from non-compliant companies
  5. voluntary compliance creates economic opportunities for all.