Are Changes to the B-BBEE Codes Informed, Necessary and Warranted?

From the draft B-BBEE Codes of 2005 to the new changes coming in on December 2019, the codes have “evolved” significantly. They went through many changes, all in the effort to make them more effective. Some of the changes were a very bad idea while some were not that bad. However, it is still very difficult to ascertain if any those changes have been effective or not…or even if those changes were warranted in the first place.

The basis on which we argue that certain changes in the codes are needed is very subjective, making it flawed. We base it on our own personal experiences. Statistics about the impact of B-BBEE were never collected, so we are being presumptuous when deciding on what needs to be changed in the codes. Rather than constantly changing the codes, we need to effectively measure their impact. Only then can we have a strong base in terms of arguing what needs to be changed. 

B-BBEE Verification Agencies play a big role in terms of transformation in South Africa. They audit companies to see if they are complying with set targets. They are guided by the Verification Manual which is gazetted by the DTI and provides audit steps to be applied in order to measure B-BBEE compliance. That is the document we need to focus on first. The last time I saw a verification manual was in 2015 and it was in draft format. Meaning, we may not have guidelines currently to measure compliance. The old manual that was gazetted focused a lot on punching numbers instead of testing principles and fundamentals. Which means, it guided the B-BBEE Verification Agency to measure rands and head count instead of impact. We need to fix that first.

Once we have an effective audit mechanism, we would need to collect all the B-BBEE certificates and consolidate all that data to determine which areas of transformation are still lagging behind. From there, we will need to start having conversations with all stakeholders to understand why there is lack of progress in those areas. This will give us an understanding of what needs to be changed. Of course, we need to link this to the current challenges of South Africa, Africa and the world.

I suspect there will be more changes to the codes, but this time they need to be informed. Currently, we cannot say for sure which areas of B-BBEE have not worked and need changes. If we keep going this route of changing codes without a strong base for it, we will not address the real challenges in transformation.