Become an empowering supplier, get a scorecard, get some ownership (preferably 100%) and get the tender. What a lovely idea, but can you issue certificates under gazette number 36928? I'm actually surprised that we haven't seen BEE certificates issued under the new codes already, afterall paragraph 10 of statement 000 says you can. Paragraph 10 also tells us that gazette number 29617 has been repealed (old codes). The question is "can you issue certificates under the code?' AND "have the old codes been repealed?" Percy told me the answer was no in both cases – but that's Percy's word. When you want the definitive answer there is only one person to ask and that's Chris van Wyk of AQRate. I asked for a simple paragraph and Chris sent me an impromptu text book – I therefore have to edit it down a bit.
The effective date of the Revised Codes which, on page 1 of the Notice in terms of which it was issued, states that it will come into effect within 12 months from the date of the publication thereof (11 October 2013). Any practitioner of law reading that provision would tell you that that provision means that nothing in the rest of the 107 pages gazetted is operative until 11 October 2014. Clause 10 of Statement 000 of the Revised Codes however tries to introduce an opt in provision for those entities that would wish to be measured in term of the Revised Code for the 12 months from 11 October 2013 until 11 October 2014 when it becomes effective. Because this clause 10 is not effective itself until 11 October 2014, it loses all its meaning.
It couldn't be more succinct than that. If you don't believe me look at the notices on all the other charters that we published under section 9(1) of the BEE Act.
Legality aside, issuing a certificate other than an EME certificate, under 36928 is a very complex affair. In order to be considered under procurement you have to be an empowering supplier. You can read about that bollocks in the code itself. It's very clear that even black owned business need to be empowering suppliers. And this is where one of the many contradictions of the codes comes to the fore. Rob tells us on page 9, paragraph 5.3.3 that a QSE need only get an affidavit confirming revenue less than R50m and level of ownership. If you are 100% black owned then you are a level one. But that's all you are – a level one. That's like being a Ferrari badge – you're missing a car to make up the title Ferrari. If you wish to provide points to your clients under code 400 then you must be an empowering supplier. And in order to be so you're going to have to be verified to confirm this status. And this is going to cost geld, admittedly less geld than a poor old white company that needs to prove all the elements as well as the empowering supplier status but it's still going to cost geld.
But wait there's more. In paragraph 5.3.2 Rob tells us that a QSE with more than 51% black ownership is a level two contributor. They'll still have to prove the empowering suppliers status, but that's not all. They have to be verified in terms of ownership. Don't believe me – take a look at page 100. They say that a 51% black-owned (or black woman-owned) company needs to earn all the points for Net Value. This must be independently verified.
And now onto the next point that Chris pointed out to me. If the new codes only measure empowering suppliers then scorecards under the current charters cannot be considered under the new codes. Companies subject to the charters can't just then go off and get verified under the new codes because Rob won't let them – see paragraph 3.2.3 on page 7. Gerhardus argues that almost every company can fit within the ICT code – but that's a debate for another day. Whilst I'm talking about Gerhardus, he told me that that 36928 is so vague that even the loopholes are grey. Now we have an uptake issue. No company is going to volunteer to be the first company to be verified under the 36928 because none of their suppliers (other than EMEs) will have a certificate stating that they are an empowering supplier and hence they'll miss the 40% subminimum under paragraph 2.1 of Code 400 (page 63) and will be discounted.
I'm starting to see the humour now. However if you want a very balanced overview of this shambles, AQRate is hosting a course in Cape Town on the 28th of October, 2013. Courses in Durban will follow a few days' later, hosted by Brigitte Brun. I don't endorse many courses because I think I can host better ones but Chris and his team have picked up the slack left by Kevin Lester and lord knows there were queues around the block to see Lester's performances. Tell Chris I sent you.
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