COVID-19 and BEE: Frequently Asked Questions

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COVID-19 and BEE: Frequently Asked Questions

COVID-19 and BEE: Frequently Asked Questions

  1. Will the application of B-BBEE be suspended as a result of COVID-19 or during the lockdown period?

The B-BBEE Act is applicable during the lockdown period and all measured entities are required to comply with the requirements. Failure to comply will be a violation of the B-BBEE Act. The restrictions that are placed on various activities are covered and articulated in the National Disaster Management Regulations issued by government from time to time during the lockdown.

  • Will the B-BBEE Commission exempt measured entities from implementation of B-BBEE initiatives such as skills development training that would have been implemented during the lock-down period come measurement time?

The B-BBEE measurement is based on evidence provided by the measured entity in relation to its implementation of the B-BBEE Act on an annual basis. It is without doubt that the annual plans and extent of performance of some of measured entities in relation to performance against the elements on the scorecard may be affected due to the lockdown and the restrictions placed on business activities. Measured entities are encouraged to adjust plans and to the extent possible continue to implement the initiatives towards achieving their annual targets. A measured entity will be measured on the basis of initiatives that have been implemented during the measurement period in compliance with the B-BBEE requirements. B-BBEE framework inherently provides the opportunity to improve performance on the targets on an annual basis. Therefore, the B-BBEE Commission is not authorized by the B-BBEE Act to grant any exemption relating to the implementation of B-BBEE initiatives affected by the national COVID-19 lockdown.

  • Can a measured entity recognise contributions made to the Solidarity Fund for B-BBEE purposes?

The requirements for recognition of any specific contribution in respect of each element are set out in the Codes of Good Practice. The requirements set are linked to the objectives of the B-BBEE Act in section 2 of the B-BBEE Act. This means any contribution made by a measured entity must be for a B-BBEE initiative or for B-BBEE purposes.

The Solidarity Fund is established to respond to the current COVID-19 pandemic and not for B-BBEE purposes, although it is granted that some of its beneficiaries may be black people based on the demographics in South Africa.

Everyone is encouraged to contribute to the Solidarity Fund to enhance the fight against COVID-19, however, these contributions cannot be claimed for B-BBEE.

  • Will entities be exempted from implementing B-BBEE or from complying with the B-BBEE requirements set in the B-BBEE Act due to the impact of COVID-19 on the South African economy?

It is common cause that COVID-19 has and will have a negative impact on the South African economy at large, including performance towards B-BBEE. The measures to address economic consequences of the pandemic are done within the rule of law and adherence to the prescripts of the Constitution of South Africa. All entities that are required to implement B-BBEE as outlined in Statement 000 of the Codes of Good Practice are required to implement the B-BBEE Act. Therefore, there is no exemption from implementation of and compliance to the B-BBEE Act.

  • Will the B-BBEE Commission consider relieving smaller entities from the costs of verification given the impact of COVID-19?

Exempted Micro Enterprises (EMEs), which are entities with the annual turnover of R0 to R10 million, are already exempted from the verification process and qualify for an automatic level. EMEs are only required to use a B-BBEE sworn affidavit or a certificate issued by the Companies and Intellectual Property (CIPC) confirming their turnover and level of black ownership at no cost. All EMEs qualify for a B-BBEE level 4, whilst EMEs that are 51% and 100% black owned would qualify for a B-BBEE level 2 and 1 respectively.

  • When can major B-BBEE transactions concluded from mid-March 2020 to 30 April 2020 be registered?

The normal timeline for filing the major B-BBEE transaction is within 15 days of the conclusion of the major B-BBEE transaction. The parties that concluded or will conclude a major B-BBEE transactions from 11 March 2020 to 30 April 2020 are granted indulgence to file the major B-BBEE transaction for registration within 30 calendar days following the end of the lockdown period, that is 30 days from 4 May 2020. These reports are crucial for performance of the mandate under section 13F(1)(f) of the B-BBEE Act and measured entities must submit timely.

  • When can entities that were due to submit the section 13G compliance reports during the lock-down period do so?

All JSE listed entities, organs of state and public entities, and SETAs that are required to submit compliance reports any time from 26 March 2020 to 30 April 2020 may submit their compliance reports within 30 calendar days following the end of the lockdown period. These reports are crucial for performance of the mandate under section 13F(1)(g) of the B-BBEE Act and measured entities must submit timely.

  • Will entities that were required to submit any form of correspondence to the B-BBEE Commission during the national lock-down be granted an extension?

All stakeholders that have a timeline that falls on a date that is during the lockdown period for submission of responses to allegations in a complaint and possible B-BBEE misrepresentation, responses to findings in an investigation, responses for alignment of major B-BBEE transactions and any relevant deadline are granted indulgence to submit these to the B-BBEE Commission within 30 calendar days following the end of the lockdown period, that is 30 April 2020.

  • When will the offices of the B-BBEE Commission re-open?

Our offices will officially re-open on 4 May 2020, unless otherwise communicated, although it may operate with skeleton staff in light of the gradual easing of the lockdown. The B-BBEE Commission remains available to offer the necessary support and free advice to all entities and organs of state during the lockdown period and beyond.

Source:

https://www.bbbeecommission.co.za/questions-posed-to-the-b-bbee-commission-in-relation-to-the-impact-of-covid-19-on-b-bbee-implementation/

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