The Beginning of B-BBEE

In the beginning

The codes process

The first phase

The first phase of the Codes of Good Practice dealt with the following areas of broad-based BEE:

  •  The Regulatory Framework (Code 000, Statement 000)
  •  Sector Transformation Charters (Code 000, Statement 010)
  •  BEE Verification Agencies (Code 000, Statement 020)
  •  Ownership (Code 100, Statement 100)
  •  Ownership arising from the Sale of Assets (Code 100, Statement 101)
  •  Management (Code 200, Statement 200)

            March 2004
            Drafting of the first phase of the Codes of Good Practice begins.

            December 2004
            The first phase of the Codes is released for public comment for a minimum period of 60 days, as espoused in the Broad-based BEE Act of 2003.

            March 2005
            Deadline for the submission of comments. The DTI receives over 350 submissions from multinationals, large corporations, business chambers, SMME’s and individuals.

            24 June 2005
            Minister of Trade and Industry, Mandisi Mphalwa, presents a revised, embargoed version of the Codes to business organisations, business leaders and industry representatives.

            July 2005
            Finalisation phase of the first phase of the Codes of Good Practice by the DTI.

            October 2005
            The first phase of the Codes is approved in principle by Cabinet.

            1 November 2005
            The DTI releases the final version of Phase One of the Codes of Good Practice, together with an interpretive guide for non-specialists.

                      The second phase

                      The second phase of the Codes of Good Practice deals with the following areas of broad-based BEE:

                      • Fronting (Code 000, Statement 001)
                      • Complex Structures (Code 000, Statement 002)
                      • Ownership related to BEE Targeted Warehousing Funds (Code 100, Statement 102),
                      • Ownership related to Multinational Companies (Code 100, Statement 103),
                      • Ownership related to state-owned entities (Code 100, Statement 104) and
                      • Ownership related to section 21 companies (Code 100, Statement 105)
                      • Employment Equity (Code 300, Statement 300)
                      • Skills Development (Code 400, Statement 400)
                      • Preferential Procurement (Code 500, Statement 500)
                      • Enterprise Development (Code 600, Statement 600)
                      • The Residual Element (Code 700, Statement 700)
                      • Qualifying Small Enterprises (Code 1000, Statement 1000 to 1700)

                                                      April 2005
                                                      Drafting of the second phase of the Codes of Good Practice begins.

                                                      December 2005
                                                      The second phase of the Codes of Good Practice are released for public comment. This entails a 60-day commentary period during which time the private sector is encouraged to be guided by the contents of the draft of the second phase.

                                                      March 2006
                                                      Deadline for the submission of comments was 31 March 2006. Comments were invited from all relevant private sector stakeholders, including SMME’s (especially relating to those Codes 1000 to 1700), large corporates and individuals.

                                                                Finalisation

                                                                April to July 2006
                                                                Collation of comments on Phase 2. As with Phase 1, the DTI reviewed the comments before amending the Codes.

                                                                August 2006
                                                                After being amended the Codes are far more simplified than previous drafts. Pressured to release the final Codes the DTI prepares the Codes for Cabinet.

                                                                December 2006
                                                                After Cabinet approval, the Codes are further streamlined before a guide to the finalised Codes are released by DTI.

                                                                Gazetting of the Codes of Good Practice
                                                                The Codes of Good Practice are finally gazetted on February 9, 2007.

                                                                          The third phase

                                                                          Amended Codes of Good Practice 2013

                                                                          The revisions were gazetted in October 2013 but implemented and come into affect 1st May 2015 and represent a further wave in the BEE legislation of the Department of Trade and Industry. Initially, narrow-based empowerment (ownership and management only) was followed by broad-based empowerment, which incorporated seven elements: ownership, management control, employment equity, skills development, preferential procurement, enterprise development and socio-economic development.

                                                                          Now the number of elements is being reduced to five: ownership, management control, skills development, enterprise & supplier development and socio-economic development.