New BEE code unlocks opportunities for construction companies

18 July 2018

The recent amendment to the gazetted Code of Good Practice on Broad-Based Black Economic Empowerment (BBBEE) is set to open up new opportunities for the industry.

This is the view of Kwakho Mpepho, Education, Training and Transformation Manager at the Master Builders Association North.  Mpepho says the Master Builders Association welcomes the new Code, because it is aligned with the specifics of the industry, and was compiled with everyone’s participation.

“The new Code offers us a blueprint to grow the industry and makes it inclusive, but members shouldn’t ignore the fact that compliance will open up new business opportunities, especially within the public sector. As we all know, proposed government spending on infrastructure is massive, and a BBBEE rating is your ticket to the game,” he explains.

New changes

Until now, members of the construction industry have had to abide by the Department of Trade and Industry’s generic code. Mpepho says that companies with current BBBEE certificates under the old code can continue to use it until it expires, when they will have to be assessed under the new code.

One of the major changes introduced by the new Code as compared to the generic code is the readjustment of thresholds and targets for enterprises across the various categories.

For instance, Qualifying Small Enterprises (QSEs) with at least 51% black beneficiaries would qualify for elevation to BBBEE Level 2 status under the generic codes. Under the new Code, however, an entity with the same BBBEE profile is required to further comply with one of the two additional elements, namely Skills Development or Preferential Procurement and Supplier Development.

Compliance a challenge

“The result is that businesses that would have enjoyed a decent BBBEE status under the generic codes will struggle to maintain their current level,” says Mpepho.

“In fact, measured entities can expect to drop one or more levels. It therefore makes sense for contractors to have their BBBEE profiles immediately reviewed and updated using the new Code’s measurements and targets, so they can begin improving their ratings immediately. There are more changes, and companies need to understand them carefully.”

According to Mpepho the new code will apply to material suppliers/ manufacturers and built environment professionals as well as traditional construction companies.

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