SA’s new BBBEE codes offer little new

2013-10-06 14:00

There was no mention of a new dispensation for “equity equivalents” when the nation’s new BBBEE codes were partially unveiled on Thursday.

The American Chamber of Commerce (AmCham) earlier in the week said it expected a favourable change to this special regime for multinational companies.

The equity equivalents allow them to spend more money on other parts of the BBBEE codes instead of introducing black partners into their local operations. But they have been so restrictive that only about five programmes have been approved since 2007.

It is one of the concessions that US businesses hope to win from government using the imminent renewal of the African Growth and Opportunities

Act (Agoa) as leverage.

According to Jeff Nemeth of Ford SA, who also leads the local chapter of AmCham, they have had their “best success” on the question of equity equivalents.

The trade and industry department’s director-general, Lionel October, set up a committee to look into making equity equivalents more useful in the new codes “six months ago”, according to Nemeth.

Another thing on their wish list is a less restrictive work permit system and stricter intellectual property policy.

Last month, AmCham sent a delegation to Washington to meet with “friends of Africa” and lobby for the extension of the Agoa.

The delegation, “coincidentally”, went at the same time as a department delegation headed by Minister Rob Davies.

During the trip, Davies told City Press that a review of the equity equivalents was unlikely.

Slight Changes

The new codes will only be gazetted in full this coming Friday, but judging by the presentation made at the inaugural Empowerment Summit, they are basically unchanged from the draft released exactly a year ago.

The headline changes are that small black firms no longer need expensive verification certificates, just an affidavit on their ownership to qualify as level-one contributors.

The other major change is a larger weighting for enterprise development, which, along with ownership and skills development, have become “priority elements”. Achieving less than 40% on either of these three leads to a reduced contributor level.

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