• Date Posted: April 15, 2015
  • Author: Deon Oberholzer

Priority BBBEE Elements and Measurement Changes

The BBBEE Elements on the Generic Scorecard have been changed from 7 elements to 5 elements. The previous elements included:

  • Ownership
  • Management Control
  • Employment Equity
  • Skills Development
  • Preferential Procurement
  • Enterprise Development
  • Socio Economic Development

Employment Equity and Management Control are now combined into a single element and Preferential Procurement and Enterprise Development are one. The new BBBEE Elements as effective from 1 May 2015 are:

  • Ownership
  • Management
  • Skills Development
  • Enterprise & Supplier Development
  • Socio-Economic Development

The three main priority elements are:

  • Ownership
  • Skills Development
  • Enterprise & Supplier Development

QSEs must comply with at least two of the three priority elements – achieving a score of minimum 40% in them with Ownership being compulsory. Generic large enterprises must comply with the minimum score of at least 40% on all three priority elements.


Aspects that are scored on the Generic Scorecard include:

  • Black exercisable voting rights in the enterprise.
  • Black women exercisable voting rights in the enterprise.
  • Entitled black economic interest in the enterprise.
  • Black designated groups.
  • Black beneficiaries of broad-based ownership schemes.
  • Black participation in employee share ownership.
  • Black participants in cooperatives.

Skills Development

Skills Development is one of the priority elements and an area in which companies can score well. Internships learnerships and apprenticeships now represent a much larger number of points and recognition is only given for targeted training.  On the plus side, companies can also score for initiatives to train people that are not on their payroll. The compliance targets have been calculated according to the economic active population profile. If the measured entity doesn’t meet the threshold of 40%, then the entity will still be able to score on the points gained on Skills, but will face an overall score discount of one level.

Measurement is done regarding:

  • Spending on learning programs within the Learning Program Matrix for black people.
  • Spending on learning programs in the Learning Program Matrix for black people with disabilities.
  • Learnerships, apprenticeships and internships regarding number of black people participating as a percentage of the total employees and the number of unemployed black people participating as a percentage of total employees.

Bonus points are awarded for the number of black people absorbed by the industry at the end of their training period.

Enterprise & Supplier Development

The weighting point for ESD is 40 and a minimum of 40% threshold applies. Recognition is given for procurement from new enterprises and from black EMEs and QSE’s for a period of three years. The Scorecard now distinguishes between the enterprise and supplier development contributions. Only black owned and black women owned QSEs and EMEs qualify as supplier development beneficiaries, and the dti adjusted the benefit factor matrix for a shorter payment period. In addition, all suppliers must be empowering suppliers (ES). EMEs automatically qualify for ES status.

Measurement in terms of preferential procurement includes assessment of:

  • BBBEE procurement expenditure from ES based on the BBBEE.
  • BBBEE procurement expenditure from ES QSEs and EMEs based on the relevant BBBEE recognition.
  • BBBEE procurement spending from ES that are 50% black owned.
  • BBBEE procurement spending from ES that are 30% black women owned

Enterprise & Supplier Development measurements are done according to:

  • Annual value of the supplier development contributions as a percentage of the target.
  • Annual value of the enterprise development contributions and sector specific programs as a percentage of the target.

Enterprises must ensure that they meet the threshold targets in the three priority elements, in addition to paying attention to Management Control and Socio-Economic Development. Implementing or restructuring of the BEE ownership profile and in particular the structuring of the payment arrangement for BEE shareholding may be essential for QSEs and Generic large enterprises.

Gestalt offers unique solutions for maximum BEE compliance, using cost effective solutions while ensuring maximum business benefit.