Non BEE compliant entities do not deserve a BEE certificate and should not be issued with one.
This is a proposition made by high profiled B-BBEE advisory firm EconoBEE and directed to the department of trade and industry (DTI), SANAS and IRBA.
Keith Levenstein, CEO of EconoBEE, said where the business is not compliant, the agency or auditor should not be allowed to issue a certificate.
“Far too many companies ask to be verified and end up with a non-compliant score – less than 30 points. Some even get zero points, which is more an indication of lack of interest than a genuinely poor score.
“Quite frankly, it is impossible to earn zero points. At least one or two of these businesses’ suppliers must be compliant such as their bank or cell phone provider,” he says.
“Very often the non-compliant company is only interested in obtaining a BEE certificate to give to their customers in the hope that the certificate will be accepted without the customer complaining about the low level. The company’s representative who receives the certificate is often untrained on BEE principles and does not always understand how BEE levels work or the meaning of non-compliant.”
“The person often accepts a certificate if it was produced by an accredited agency or auditor. They really should go back to their supplier and explain that a non-compliant certificate does not help them at all. Our suggestion is that a verification agency must not be allowed to issue a certificate to an entity unless it has reached a compliant level – level 8 at minimum.”
Mr Levenstein says a BEE certificate should be seen as a certificate of achievement and not a certificate of attendance. “If you pass your matric, you get a matric certificate. If you fail, the school does not issue you with a certificate of failure.”
“Anything less than Level 8 should not be rewarded with a valid B-BBEE certificate. We recommend to the minister and regulators, SANAS and IRBA, that they instruct the verification agencies and approved auditors not to issue a BEE Certificate of Compliance if the company is not in compliance.”
“The agency can issue a letter and report, not bearing the SANAS or IRBA logos stating the points achieved with a clear disclaimer that this cannot be used as a certificate. To be fair, there are some agencies that already refuse to issue a certificate to a non-compliant company,” says Mr Levenstein.
However, the non-compliant company may simply appoint a different agency or approved auditor. If all agencies were to follow the same policy, we would expect to see an improvement in levels of compliance. If a company that needs a valid BEE certificate were refused because they are not compliant, we believe that the company would take instant remedial steps to become compliant.”
“This will go a long way in ensuring improved compliance and better BEE implementation. This is not a change to the codes, but only the method of verification, so it does not require a gazette or commentary period in terms of 9(5) of the act. If SANAS and IRBA were to issue guidelines, and in the future notices of non-conformance, we believe that this would be sufficient,” says Levenstein.