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Black industrialism, youth employment and
BEE education funding key in proposed new BEE
amendments

Danie Krige
April 2018

“I understand that Government has proposed important amendments
to the current BEE Codes of Good Practice that will have a big impact
on large businesses in particular. My company qualifies as a generic
enterprise, and I was wondering what I need to prepare for should these
amendments be adopted.”

The Department of Trade and Industry published two draft statements on 29
March 2018 which contain a number of notable amendments to the current BEE
Codes of Good Practice and provide for a 60-day period to provide comments
on the proposed amendments (“Code Amendments”).

If the Code Amendments pass, it will afford generic companies (companies with
a turnover of more than R50 million) with the ability to also obtain automatic BEE
recognition as is currently the case with EME and QSE companies. This means
that a generic company with 51% or more black ownership will achieve an
automatic level 2 BEE status and a 100% black owned company will achieve an
automatic level 1 BEE status.

This is a big advantage for such companies as they will only need to verify their
ownership to obtain these recognition levels and won’t need to meet the other
elements of the generic BEE scorecard.

One can presume that the inevitable and planned result of these Code
Amendments will be a general increase in the impetus of large companies
to increase their ownership to more than 51% black shareholding to leverage
the benefits of such automatic recognition, setting the scene for more black
industrialists to emerge.
A consequence of automatic recognition for large companies may however
hold a reduced emphasis in the long run on other elements of the BEE scorecard
such as skills development, employment equity, preferential procurement and
enterprise and supplier development.
A brand-new element introduced by the Code Amendments relates to Youth
Employment Service or YES for short. This new element, if approved, will create
a framework for the education and employment of black youth between the
ages of 18 and 35, with companies that are successful in implementing YES
initiatives allowed to improve its BEE status by as much as two levels.

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