The Department of Trade and
Industry (dti) could face a legal
challenge if it pushes ahead
and implements the revised
broad based black economic
empowerment (BBBEE)
codes before completing and
aligning nine sector codes as
well as the codes guiding small
companies.
Brad Green, executive
chairman of B1SA, says
while it may very well be
embarrassing for government
to have to extend the deadline
a second time, it is by far the
most sensible option available.
“The codes were supposed
to be implemented in October
last year but implementation
was delayed to May 2015 to
give the dti the time to align
the different sector codes to
the amended generic codes
and to complete all other
regulatory work,” he told
FTW. “As yet not one sector
code has been promulgated,
while there are still numerous
technical and interpretive
issues that have to be clarified.
The technical guidelines of the
codes have not been published
and neither has the verification
methodology. The most
sensible thing at this point –
with less than a week before
implementation – is to extend
the deadline or at the very
least give clarity on the status
of the sector codes and other
regulatory work.”
The nine
sector codes are
for transport,
construction,
tourism, ICT,
forestry, finance,
property,
accountancy and
agriculture.
Green believes
that if the dti
forges ahead
businesses could
very well have
a legal foot to
stand on when it comes to
compliance with the new
regulations. He, like many
other BBBEE experts, says it
is impossible to implement
the generic codes if the sector
codes are not aligned.
“There is a lot of speculation
and opinion around this issue
and subsequently also a lot of
confusion,” said Green. “The
generic codes that will be
implemented on May 1 state
that sector-specific entities
must continue to use their
sector-specific codes – but
because they have not been
aligned to the new codes this
will not be possible. The sector
codes still refer to the old codes
that refer to an old
piece of legislation
that no longer
exists.”
Green said
there was a
lot of talk that
companies in the
sectors, come May
1, would be subject
to the generic
codes and not
their sector codes
because of the lack
of alignment.
“That is the
legal conundrum because
legally you can’t do that – the
generic codes that will now be
in place stipulate they must
still use the sector codes.”
Even if the dti were to
provide aligned sector codes
prior to May 1 the BBBEE
Act requires at least 60 days’
notice for public commentary
following publication of
proposed changes in the
government gazette.
INSERT
It is impossible
to implement the
generic codes if
the sector codes
are not aligned.
– Brad Green
