Will BEE affect me?
The implementation of the Broad-based Black Economic Empowerment Act, Act 53 of 2003 (“B-BBEE”), affects all business and individuals in South Africa. In fact it has been said that “the B-BBEE legislation is the most significant piece of legislation affecting South African business today”. BEE is not just vital for the country’s prosperity but a catalyst for economic growth.
A company’s BEE Compliance Level is used to rank enterprises for the purpose of allocation of contracts by state, governmental and local governmental institutions. The most important element of the Scorecard is the preferential procurement element, measuring the extent to which an enterprise favours BEE Compliant enterprises in procuring goods and services. It is this element, which serves to ensure that compliance pressure is not confined to the ranks of direct suppliers to government and quasi-government bodies. If the direct suppliers are to have respectable BEE credentials, they themselves must favour “empowered” enterprises, giving rise to a “ripple effect” designed to spread even to enterprises which are relatively remote from governmental and government favour.
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