Broad-Based Black Economic Empowerment Act, 2003 (Act No. 53 of 2003)

Verification Manual

6. Standards of Ethical Conduct & Requirements
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In order to obtain and maintain confidence, a BEE Verification Agency has to be able to demonstrate that its decisions are based on objective evidence and that its decisions have not been improperly influenced by other interests or by other parties. Principles for inspiring confidence include:5

 

6.1Impartiality

 

6.1.1Impartiality and being perceived to be impartial, is necessary for a BEE Verification Agency to be able to deliver a verification that provides confidence. It is recognised that the source of revenue for a BEE Verification Agency is the client paying for its service and that this is a potential threat to impartiality.

 

6.1.2Impartiality is manifested  by actual and  perceived  presence  of  objectivity. Objectivity means that conflict of interest does not exist or is resolved so as not to influence adversely the subsequent activities of the BEE Verification Agency.

 

6.1.3Synonyms that are useful in conveying the element of impartiality are: objectivity, independence,  freedom  from  conflicts  of  interest,  freedom  from  bias,  lack of prejudice,  neutrality, fairness,  open-mindedness,  even-handedness,  detachment and balance.

 

6.1.4Threats to impartiality include:

 

6.1.4.1Self-interest threats - threats that arise from a person or enterprise acting in their own interest, for example financial self-interest.
6.1.4.2Self-review threats - threats that arise from a person or enterprise reviewing work done by themselves, for example evaluating the BEE compliance of a measured entity to whom the BEE Verification Agency provided consultancy services;
6.1.4.3Familiarity (or trust) threats - threats that arise from a person or body being too familiar with or trusting towards another person instead of seeking objective evidence on which to base the verification conclusion
6.1.4.4Intimidation threats - threats that arise from a person or enterprise having a perception of being coerced openly or secretively, such as a threat to be replaced or reported to a supervisor.

 

6.2Competence

 

6.2.1Competence is the demonstrated ability to apply knowledge and skills effectively.

 

6.2.2The competence of the personnel supported by the infrastructure of the Agency is necessary for the BEE Verification Agency to deliver a verification that provides confidence.

 

6.3Responsibility

 

6.3.1The measured entity, not the BEE Verification Agency, is responsible  for conforming to the requirements for BEE Verification. The BEE Verification Agency is responsible for carrying out a factual, thorough evaluation of  a  measured entity's B-BBEE status and, based on the result, for determining a BEE score.

 

6.4Openness

 

6.4.1Openness is access to or disclosure of information. A BEE Verification Agency needs to provide public access to, or disclosure of, appropriate and timely information about the evaluation and verification process and about the verification status of any measured entity in order to gain confidence in the integrity and credibility of the BEE verification process.

 

6.4.2The measured entity needs to provide access to or disclosure of appropriate information about the evaluation of its B-BBEE status.

 

6.4.3A BEE Verification Agency needs to provide appropriate access to or disclosure of specific interested  parties'  non-confidential  and  non-proprietary  information about the results of specific evaluations (e.g. evaluations in response to complaints) in order to gain and maintain confidence.

 

6.4.4It is mandatory for all Accredited Verification Agencies to populate the dti BEE IT Portal with information underlying each Verification Certificate.

 

6.5Confidentiality

 

6.5.1In order to gain access to the privileged information that is needed for the BEE Verification Agency to assess adequately the requirements for BEE Verification, a BEE Verification Agency needs to keep any proprietary information about a measured entity confidential. However, a BEE Verification Agency may disclose a measured        entity's actual verification result, without compromising the confidentiality  of the information supporting the verification  outcome.

 

6.6Resolution of complaints

 

6.6.1Parties that rely on the outcome of their verification status as assessed by accredited BEE Verification Agencies expect to have their complaints investigated. If these complaints are found to be valid, they need to have confidence that the complaints shall be appropriately addressed and that a reasonable effort shall be made to resolve the complaints.

 

6.6.2An appropriate balance between the principles of openness and confidentiality, including resolution of complaints, is necessary in order to demonstrate integrity and credibility.

 

6.7The Verification Agency shall establish policies and procedures designed to provide it with reasonable assurance that its personnel comply with  relevant  ethical  and legal requirements.

 

6.8Where it is not possible to reduce the threat to it's independence to an acceptable level the Verification Agency shall decline to accept or continue the B-BBEE Verification  Engagement,

 

6.9When an Accredited Verification Agency or its directors or top management are also members of another professional body, those directors or top management shall comply with that professional body's ethical requirements, in so far as they may affect such a verification engagement. , provided they do not conflict with or diminish the ethical standards applicable in terms of the B-BBEE Act and Codes of Good Practice and SANAS R47 as amended. Such ethical requirements are often contained in a Code of Professional Conduct.

 

5 See SANAS R47-02 paragraph 9.1.3 page 5-6