Revised Codes Of Good Practice, Altering BEE Scorecards

The Department of Trade & Industry have published revised Codes of Good Practice, altering BEE Scorecards of businesses in South Africa and creating a step-change in policy

a)The new codes affecting Generics (and all Corporates in the RSA) have substantial changes


  • The revised codes identify Ownership, Skills Development, Preferential Procurement, Enterprise Development and Supplier Development as priority elements. Therefore, these carry a minimum compliance target of 40%.
  • Increased overall emphasis on ownership
  • Supplier Development (SD) is added as a new component
  • In the old charter PP and ED yielded 21 points, PP & ED/SD can now generate 40 points (+4 bonus points)
  • PP in the new charter puts more emphasis on BO and BWO suppliers

b) The changes in the codes are coupled with stricter scoring


Why is this important?


  • Some government licenses are awarded based on scorecard level – consequently Corporates typically cannot fall below a level 4


  • Loss of existing contracts and customers due to not meeting the minimum BBBEE Level Contributor status required (e.g. contracts with Parastatals)
  • All Government and SOC procurement need to use BEE as a criteria in terms of the BBBEE Amendment Bill


  • Dropping of the BBBEE status will/ could have negative reputational risk
  • Loss of key consumers not wanting to do business with perceived low-transformation entities


c) The compliance criteria is also stricter


  • As a result of the above changes, Corporates and Generics typically face a 4 – 5 level drop before responding to the revised codes
  • As a consequence, this substantially ups the ante on the transformation of supply chains and on suppliers to large corporates
  • Any new entrant into the existing formal economy will therefore either need to be substantially transformed (majority black owned) or substantially differentiated should it wish to secure business with large corporates.

ieBEE is about empowering businesses negatively affected by the Codes to Grow.