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

Codes of Good Practice on Black Economic Empowerment

Integrated Transport Sector Codes

B-BBEE Sub-Sector Code for Public Sector - Transport

6. Appendix B: Enterprise Development Enhanced Recognition Factor Mechanism

E. Enhanced Recognition Determination
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This is to be broken up into two components:

1.Determination of enterprise development compliance; and
2.Measurement of development and computing this measure of progress and determining the enhanced recognition factor.

 

1.        Development  Compliance

 

1.1Auditors* or an accredited verification agency will measure progress against the plan of development.

 

1.2Auditors* or an accredited verification agency will review the enterprise development documentation

 

1.3Auditors* or an accredited verification agency will interview the DO owner and selected staff to gauge benefits provided and actual development attained by the DO.

 

1.4*These can be auditors with an accounting/financial background but are not limited to this category of people.

 

2.        Measurement

 

2.1When the above 3 steps are achieved, the auditor can deem that the enterprise development has been attained and that the development programme is compliant.

 

2.2The equation/formula used to convert this achievement into an enhanced recognition is as follows:

 

3.        Prerequisites

 

A CE should have a minimum of 2 BEs' that being developed at a time, in order to qualify to receive the enhanced recognition for ED within the scorecard.

 

I.The phase-in period for the CE to develop its development programme and identify its BEs is 12 months from the date of signature of the Transport Sector Charter.

 

II.BEs should be factored in over 24 months from date of signature to be catering for a minimum of 30% of a CEs discretionary spend increasing to 60% at the end of year 5 from the date of signature of the Transport Sector Charter.

 

a)        Scoring

i)The scores derived from the MM for each enterprise in the
ii)programme are added together and an average is computed.
iii)If the average is growth rate is less than real GDP growth for the period in question then the CEs will receive a penalty point (i.e. a reduced score with zero as a minimum).
iv)If the average growth rate is equal to real GDP growth, the CE will be neither penalized nor rewarded.
v)If the average growth rate exceeds real GDP growth the CE will be rewarded on a sliding scale up to a maximum of multiplier of 1.5.

 

TABLE 1: MULTIPLICATION OF FACTORS

 

Average Growth Rate of BE

Multiplication Factor

25% less than real GDP growth annualised

0.75

20% less than real GDP growth annualised

0.80

15% less than real GDP growth annualised

0.85

10% less than real GDP growth annualised

0.90

5% less than real GDP growth annualised

0.95

Equal to real GDP growth annualised

1.0

5% greater than real GDP growth annualised

1.025

10% greater than real GDP growth annualised

1.05

15% greater than real GDP growth annualised

1.075

20% greater than real GDP growth annualised

1.10

25% greater than real GDP growth annualised

1.125