B-BBEE REGULATIONS, 2016 [In terms of 14(1) of B-BBEE Act, 2003 (Act No.53 of 2003), as amended by the B-BBEE Amendment Act, 2013 (Act No. 46 of 2013)]
EXECUTIVE SUMMARY B-BBEE Regulations B-BBEE Commission Office: Functions, responsibilities, and administrative issues B-BBEE Compliance Reporting: (i) Sphere of government, public entity, or organ state; (ii) Public Company listed on the Johannesburg Stock Exchange (JSE); (iii) Sectorial Education and Training Authority (SETA) (iv) Sector Charter Councils Access to Information: Restricted or Confidential Information B-BBEE Complaints: Lodging a complaint and withdrawal of complaints Registration of a major B-BBEE Transaction: A transaction above a threshold determined by the DTI Minister Applications to the Minster: By organ of state or public entity (i) Exceed the B-BBEE Qualification Criteria (ii) Exemption or Deviation from applying the Codes of Good Practice 2
EXECUTIVE SUMMARY … Cont. B-BBEE Amendment Act, 2013: Key amendment issues/areas – Black people definition (African, Coloureds and Indians: citizens by birth or descent; became citizens by naturalization before 27 April 1994; or would have been entitled to acquire citizenship by naturalization before 27 April 1994.) Remuneration of BEE Advisory Council members B-BBEE compliance by organs of state and public entities Strengthening the evaluation and monitoring of B-BBEE compliance Creation of an incentive schemes to support black owned and managed enterprises Cancellation of a contract or authorization (on account of false information) Establish the B-BBEE Commission: To deal with B-BBEE compliance To provide for B-BBEE offences and penalties 3
B-BBEE REGULATIONS, 2016 4
B-BBEE COMMISSION OFFICE Established in terms of S13B of the Act Open to the public – Monday to Friday Documents: (i) Accept the delivery of documents relating to the Commission functions; (ii) Issuing of documents; and (iii) Filing documents May charge fees (for filing complaints and for services rendered) Forms for (i) notices, (ii) applications, (iii) certificates, and (iv) receipts: Forms B-BBEE 1 to B-BBEE 21 May publish notices in the Gazette : Example, to invite submissions and/or report a decision 5
B-BBEE COMPLIANCE REPORTING – ENTITIES THAT MUST REPORT By – a. Sphere of government , public entity, or organ of state b. Public company listed on the Johannesburg Stock Exchange ( JSE Listed companies ) c. Sectoral Education and Training Authority ( SETA ) d. Sector Charter Councils – Submission of reports by the Minster 6
B-BBEE COMPLIANCE REPORTING – COMPLIANCE AREAS By government entities and JSE listed companies – Form B-BBEE 1 Verified information reflecting the state of compliance with respect to – i. Ownership (where applicable) ii. Management Control iii. Skills Development iv. Enterprise and Supplier Development v. Socio-economic development vi. Any other sector specific element Reflect – How each element contributes to the outcome of the B-BBEE Scorecard When – Government Entity: Annually within thirty (30) days of the approval of audited annual financial statements and annual report JSE Listed Company: Annually, within ninety (90) days of the end of the financial year; or annually within thirty (30) days of the approval of audited annual financial statements and annual report 7
B-BBEE COMPLIANCE REPORTING – SETA Sectoral Education and Training Authority must submit a report on skills development spending and programmes – Form B-BBEE 2 Verified information reflecting the state of compliance with respect to – i. Skills training provided by member entities ii. Skills development services iii. Implementation of the Scorecard iv. Critical and priority skills v. Workplace Skills Plan Reflect – How each element contributes to the outcome of the Scorecard When – Annually within ninety (90) days of the end of the financial year; or within thirty (30) days of the approval of audited annual financial statements and annual report 8
B-BBEE COMPLIANCE REPORTING – NON-COMPLIANCE WITH THE ACT Notice of non-compliance by the Commission – Form B-BBEE 3 Corrective Action: Within thirty (30) days Failure to comply after 30 days: Reject report by issuing of Form B-BBEE 4 May arrange closed or open meeting to respond to questions as part of the consideration of the report Where the report complies with the requirements of the Act, after consideration: Commission notify the entity by issuing Form B-BBEE 5 For cases of non-compliance: Commission my conduct a site visit and/or initiate an investigation The Commission may publish reports on B-BBEE compliance reporting 9
ACCESS TO INFORMATION Restricted or Confidential Information (5 Classes): a) In terms of S13L of the Act: Where a person submitting the information claim, in writing, that such information is confidential b) Identity of the complainant: A person submitting information may request that their identity be treated as restricted information c) Information received by the Commission during investigation (until findings and recommendations are issued). Information received regarding a major B-BBEE transaction (prior to the transaction being made public by the parties d) Document containing Commission internal communication , including opinion, advice, report or recommendation obtained or prepared by or for the Commission e) Restricted information in terms of the Promotion of Access to Information Act, 2000 (Act 2 of 2000) 10
ACCESS TO INFORMATION, … Cont. Any person may inspect or copy any record that is not restricted information If it is restricted information, to the extent permitted Commission may release restricted information relating to a possible agreement of terms of an appropriate order Restricted information ay also be accessed by – i. Person who provided the information; ii. Person to whom the confidential information belongs iii. Any other person, with a written consent of the owner 11
B-BBEE COMPLAINTS The Commission may institute an investigation on receipt of a complaint Any person my lodge a complaint (on a conduct or practice relating to B-BBEE) with Commission – Form B-BBEE 7 Commission may request further information from the complainant – Form B-BBEE 8 Commission may issue summons – Form B-BBEE 20. And hold formal hearings. Make findings with or without recommendations Where false information is submitted regarding a complaint, the Commission may issue a demand for correct information – Form B-BBEE 9 Own investigation by the Commission – By issuing Form B-BBEE 10 In a case of non-investigation due to no jurisdiction or where the complaint does not warrant an investigation the Commission shall issue Form B-BBEE 11 The Commission may recommend an alternative dispute resolution mechanism – Form B-BBEE 12 12
B- BBEE COMPLAINTS, … Cont. The Commission may, with justifiable reasons, refer a matter to SARS or any regulatory authority – Form B-BBEE 13 Multiple complaints: The Commission may consolidate or join two or more complaints under a common investigation Where the complaint investigation period has lapsed, the Commission may issue Form B-BBEE 21 requesting the complainant to extend the investigation period 13
REGISTRATION OF A (B-BBEE OWNERSHIP) TRANSACTION Major B-BBEE transaction: A transaction above the threshold determined by the Minster by notice in the Gazette Registration of the transaction: Within fifteen (15) days of concluding the transaction – Form B- BBEE 18. Registration of the transaction does not constitute a requirement to obtain approval for the implementation for the transaction Certificate of Registration: Issued within ten (10) days to the party that submitted the transaction – Form B-BBEE 19 Concerns on the transaction: May be raised by the Commission ninety (90) days after the transaction has been registered. Failure to address the concerns: Commission may initiate an investigation Parties to a transaction: May seek advice from the Commission prior to concluding the transaction Material Change to B-BBEE elements after registering a transaction: A notification must be made with the Commission 14
APPLICATIONS TO THE MINISTER: ORGAN OF STATE OR PUBLIC ENTITY Permission to Exceed the Qualification Criteria Application – Form B-BBEE 14 Purpose: To accelerate transformation For procurement and other economic activities Provide motivation for exceeding the set qualification criteria Certificate of Approval by the Minster: Form B-BBEE 15. Publish notice in the Gazette Maximum approval period: 10 years Application for Exemption or Deviation Application – Form B-BBEE 17 Provide motivation setting out reasons which necessitate an exemption or deviation Application for exemption: To include a plan to comply with the B-BBEE Codes of Good Practice Application for deviation: State the elements of the Codes that the entity wishes to deviate from Certificate of Approval by the Minster: Form B-BBEE 15. Publish notice in the Gazette Maximum approval period: 10 years Report to the Minister: Form B-BBEE 16 15
THANK YOU 16
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