This is an email from the procurement department of a big company that was sent to me. I forwarded it onto Gerhardus Burger, IRBA's BEE guy, because the company wanted SANAS-accredited certificates and not IRBA ones. The italicised paragraphs are Gerhardus' responses.
Please be informed that as one of OUR supplier (sic), I request you to forward me your company's new, valid BEE certificate.
For entities with an annual turnover of less than R 10 million I require a letter written by the registered Auditor or Accountant confirming that the entity earns an annual turnover of less than R 10 million for the previous financial year (based on which financial year end?). The letter must be signed, dated and contains the Accounting Officer's practice number.
The only Sector Code that requires a "letter" is the AgriBEE Sector Code. The other Sector Codes and the "generic" 2007 Codes require EME certificates, not letters. The threshold is R10m revenue, not turnover – in terms of the Amended Codes, which are not effective yet. The Amended Codes provide no authority / mandate for anyone to issue EME certificates. If YOUR COMPANY is subject to the FS Code for their own B-BBEE certificate, which is based on the 2007 Codes, then why do they require their suppliers to apply the Amended Codes?
In case YOU have decided to apply the Amended Codes, and not the FS Code, then I would like to know why they do not apply the Amended codes appropriately, by requesting suppliers only to provide YOU with an affidavit, as stated in Par 4 of Statement 000 of the Amended Codes?
If you need an EME certificate, then you need to apply the 2007 Codes, which threshold is R5m revenue. There are different thresholds for different Sector Codes.
For Entities with an annual turnover between R 10 - R50 million I require a BEE certificate from their SANAS Accredited BEE Rating Agency to confirm the rating
For Entities with an annual turnover of over R 50 million I also require a BEE certificate from a SANAS Accredited BEE Rating Agency.
In terms of Statement 005, B-BBEE Approved Registered Auditors are also authorised to issue B-BBEE verification certificates, since the end of 2011. Why is YOUR COMPANY not aware of this yet?
Also, i.t.o. the Amended Codes, par 5, a QSE that is at least 51% Black Owned, is also exempt from measurement and only has to provide a sworn affidavit.
It would seem that this company (and it is a large one and subject to the FSC) is now requesting BEE certificates in terms of the revised bollocks codes. You'll notice that Mr Burger splits hairs in a variety of places, but the reality is that he has to. The auditing profession is regulated and subject to international guidelines, IRBA has become very fastidious in its definitions and framework for this reason. Split hairs aside he makes some very valid points – if you want a BEE certificate then it must be issued by a third party. The EME requirement under the revised codes is an affidavit, not a certificate issued by a VA or BAR. It is for this very reason that IRBA has informed its BARs that they may not issue EME certificates under the revised codes. And this is half the complication. The various IRBA BARs that I know will not only not issue revised code EME certificates, they won't accept EME affidavits either. And seeing that BARs outnumber VAs significantly it's fairly safe to say that that few companies will accept affidavits.
The second issue (other than SANAS) is that this large company has adopted the turnover thresholds of the revised codes. This is very confusing for their suppliers for a variety of reasons.
Firstly – to the best of our knowledge the brains trust at the dti (a department with 100% vacancy) hasn't actually published a QSE scorecard
Secondly – no sane company is going to attempt using the new codes because they don't make sense
Thirdly – Rob is a nasty communist
Fourthly – his department is incompetent
Now that I've expressed that…………………….
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