What is BBBEE?

BBBEE or Broad Based Black Economic Empowerment is a drive by the government to encourage companies to empower black people through, amongst others:

• Black ownership, management and employment equity
• Skills development of black employees
• Procurement of raw materials, products and services from companies with a good BBBEE rating.
• Investing in black enterprises
• Assisting the black community through socio-economic projects

The Codes of Good Conduct on Black Economic Empowerment published in Government Gazette 59617 on 9th February 2007 provide the framework for companies to be rated.

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• Table 1 shows how companies are rated differently depending on their turnover per annum.
• Table 2 shows how the Score (Points) achieved relates to a Level which in turn relates to a Percentage.
• Table 3 shows the 7 elements of the Generic Scorecard with their related scoring.
• Table 4 shows the QSE Scorecard with 4 of the 7 elements selected and their related scoring.

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Table 1 shows how companies are rated differently depending on their turnover per annum.

Turnover pa	Category	Description
>R35m	Generic
>=R5m and <=R35m	QSE	Qualifying Small Enterprise
<R5m	EME	Exempt Micro Enterprise

Table 1

The higher the Level, the higher the Percentage a company can claim on spend with that supplier. This encourages companies to use suppliers with a higher rating which, in turn, will increase their own rating.

• Generic: Companies in this category must comply with, and are rated on, all 7 elements of the Generic Scorecard. These companies have to be audited to receive a Certificate of Compliance.

• QSE: Companies in this category must comply with, and are audited on, any 4 of the 7 elements from the QSE scorecard. Each element is worth 25%. These companies have to be audited to receive a Certificate of Compliance.

• EME: Companies in this category are automatically rated as a Level 4 contributor and do not have to be audited. If the EME has a minimum of 50% black ownership, they are promoted to a Level 3 contributor. 

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Table 2 shows how the Score (Points) achieved relates to a Level which in turn relates to a Percentage.

Score (Points)	Contributor Level	Percentage
100	Level 1	135%
>= 85 and < 100	Level 2	125%
>= 75 and < 85	Level 3	110%
>= 65 and < 75	Level 4	100%
>= 55 and < 65	Level 5	80%
>= 45 and < 55	Level 6	60%
>= 40 and < 45	Level 7	50%
>= 30 and < 40	Level 8	10%
< 30	Non Compliant	0%

Table 2

Depending on whether the company is rated against the Generic or QSE scorecard, the overall rating of the company is based on the Score (Points) achieved in the elements of the relevant scorecard.

The higher the Level, the higher the percentage a company can claim on spend with that supplier. This encourages companies to use suppliers with a higher rating which, in turn, will increase their own rating.

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Table 3 shows the 7 elements of the Generic Scorecard with their related scoring.

Code	Description	Points
100	Ownership	20
200	Management	10
300	Employment Equity	15
400	Skills Development	15
500	Preferential Procurement	20
600	Enterprise Development	15
700	Socio-Economic Development	5
Total		100

Table 3

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Table 4 shows the QSE Scorecard with 4 of the 7 elements selected and their related scoring.

Code	Description	Points	Selected	Points
801	Ownership	25	N	0
802	Management	25	Y	25
803	Employment Equity	25	Y	25
804	Skills Development	25	Y	25
805	Preferential Procurement	25	Y	25
806	Enterprise Development	25	N	0
807	Socio-Economic Development	25	N	0
Total				100

Table 4