The delay in the release of the second set of the black economic empowerment codes of good practice is causing “a marked confusion” in the market, an industry source told the Mail & Guardian.
The drafting of the empowerment codes has been under way since December last year, when the first set of codes was released for public comment. Those have now been refined, after taking about 250 submissions on board. The first set of codes covered the areas of ownership and control as well as management.
The second set was originally scheduled for release at the end of July. It deals with other aspects of empowerment, including skills transfer, enterprise development and the residual portion of the empowerment scorecard, which covers areas such as corporate social investment by companies.
In the first draft of the codes, the government made a significant climb-down on ownership requirements. In its original form, statement 100 of the codes was deemed to reduce the most popular options for funding BEE. Now the emphasis is on recognising, or earning, points for ownership, as the purchased stake gets paid for.
The delay in the release of the codes is likely to hamper the finalisation of various empowerment charters. This is because once the codes have been finalised, they will go through a process of alignment with charters. One of the key areas of concern, for example, is in instances where an industry charter has a different target to the codes, which takes precedence.
Polo Radebe, director for empowerment at the Department of Trade and Industry, said the delay has been caused by finalisation of the first phase. Following additional comments, the draft is now with Minister of Trade and Industry Mandisi Mphahlwa awaiting tabling in Cabinet. Radebe said the second set “is complete” and will be released within two weeks of the finalised first set being released.