BEE is short for Black Economic Empowerment
Widespread panic was caused when new BEE laws were proposed recently. The new codes were amended so that smaller businesses would have an easier time of becoming BEE compliant and BEE consulting firms believe this is the wrong way to go. In the short term, this seems like a route that is likely to get more businesses involved in the movement. BEE is short for Black Economic Empowerment which is a means of financially righting the wrongs caused by the injustices of the past. In South Africa small to medium sized businesses are those that are defined as having fewer than 50 employees and less than 10 million in turnover. For these companies, all that is required to become BEE is to provide an affidavit.
The problem lies, says leading BEE consulting companies, in the long term fraudulent activities and that there will be those who will take advantage of these changes. Becoming BEE compliant has many economic benefits for a business. The concern with the new law is that small businesses will not have to prove that they are doing anything to contribute to black economic empowerment other than a letter stating that they are. BEE is all about giving people who have not had equal opportunities in the past a lead in getting new business opportunities. The new law will defeat this purpose if there are many fraudulent cases that come to light. These concerns were serious enough that the new law is being considered to be taken into a new direction.
Initially, it was described as being a self-verification for small businesses to become BEE accredited. The premise being that they would have an easier time of it and would not need to bring in a BEE consulting firm or a verification company. Apart from the initial drawbacks of the law, you would have small businesses who will have no functionality of BEE because they will not have to deal with BEE consulting firms. Simply getting the accreditation certificate is not enough. Yes, this will help with supplier development which is a major advantage of getting BEE for businesses but what about the other aspects, is the concern of BEE consulting firms.
BEE is not just simply about profits and being able to get more sales and tenders just because your business has this status. There is an obligation to contribute to the betterment of the country and in the process get the business a higher BEE rating. There is no doubt that a BEE consulting company is able to help leaps and bounds in this space. Another issue brought to light on businesses issuing BEE certificates to themselves is the loss of jobs at the Department of Trade and Industry. This would see as many as 1000 people losing their jobs as BEE verification companies became obsolete for smaller companies. This will also drastically impact the BEE consulting industry who are a source of wealth to all companies who wish to deal with them and gain their invaluable advice.