BEE: Facing the BEE Facts
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Since the introduction of BEE, it is now regulated that proof of BEE compliance is through BEE certificates and the accreditation of Verification Agencies is now compulsory (Verification Agencies are companies that issue out BEE Certificates). Now that every business within the South African borders is aware they need a BEE certificate, where are we headed?
Where BEE needs to be;
* The Auditor General needs to report BEE compliance for public entities. This will compel government departments to report BEE compliance to the extent to which government procures using BEE or when entering into partnerships and, or the issuing of licences for gambling licences, telecommunications, financial services, transport and mining.
* Government to include BEE when evaluating tenders. The alignment of the Preferential Procurement Policy Framework (PPPF) Act which government uses to procure goods and services and the BEE Act which is a guideline for the implementation of BEE by government. The challenge is that these two Acts are housed under two different departments who have different mandates. The PPPF Act is with Treasury and the BEE Act is with DTI.
* Minimum Level Three BEE compliance status for public sector procurement (With Level One being the highest compliance and Level Eight being non compliant), government must set a minimum compliance target of Level Three for public sector procurement in order to promote higher compliance.
* Compulsory verification all trading entities. The 5 to 10 year targets of the Codes of Good Practice set to take effect in February 2012. This second phase sets higher BEE targets for compliance between from 2012 to 2017. With every business being verified, this should allow government to use BEE certificates to evaluate progress made during the first five years and the extent to which amendments should be made.
* Fronting is corruption. The main purpose of BEE is the have procurement advantage over your competitors, therefore as such any attempts to deliberately misstate BEE credentials should be seen as corruption. Fronting undermines those companies who are involved in legitimate BEE practises. This should include prosecuting both parties involved.
* A single BEE certificate for all companies. Depending on the turnover of the business, it is easier for a small company to achieve a high level of BEE status than a mid-size or large company. This unfortunately has unintended consequences where the certificates are now not only used for BEE but to determine the capacity of the company’s ability to bid and in the process ignoring the fact that the small company has achieved a higher rating BEE rating status.
* Verification agencies must report Fronting to government
* Verification agencies must submit all verified certificates to government
Business News Sector Tags: Business| BBBEE| Industry|