SIYAYA JULY NEWSLETTER_02JULY

Codes of
Good Practice

NEWSLETTER JULY 2019

What do the latest Amendments mean to your Business?

Author: Stuart Parkin, National Business Development Manager

There are two major risk areas in the latest gazetted amendments to the Codes of Good
Practice, the absorption points in skills development and 51% black-owned QSE’s. The
latest Gazetted Amendments covered four areas of the Amended CoGP, these being the
definitions, the general framework, the Skills Development element and the Enterprise
and Supplier development elements. The implementation of these amendments is
however still unclear, the DTI would probably want all certificates issued from 1 December
2019 onwards to include these amendments however they will probably need to settle for
all financial periods ended after 1 December 2019.

The changes to the General Framework now prevents an entity from using the Modified
Flow through principle (MFP) to elevate themselves to a Level 1 or level 2 B-BBEE
contributor status. For those of you who don’t know what the Modified Flow-through
principle is well, in an ownership chain any entity that is 51% black-owned would be seen
as 100% black-owned. So, SPV (Pty) Ltd in the diagram below would be 100% black
owned using the MFP. This change will have a knock on effect on procurement since there
are a number of QSE’s that will now need to be verified.

49% Equity BLACK PERSON
51% Equity
Existing 100% White SPV (Pty) Ltd
Shareholders
51% Equity
MEASURED ENTITY
EXAMPLE (Pty) Ltd
49% Equity

The changes to the skills development element alter how you split your spend since the
newly added expenditure on black students at Higher Education Institutions. Since there
are TVET colleges registered with the Department of Higher education it is still possible
to accrue the Section 12 H(a) allowance. The change to the absorption definition is touchy
as it is no longer possible to simply provide learners with additional learning
opportunities. It is now necessary to provide the Learners with employment until their
mandatory date of retirement. The good news is that the percentage of internal &
uncertified training has increased from 15% to 25%.

In the Preferential Procurement element there is, a risk that those 51% black owned QSE’s
no longer get their Level 2 or any level at all, on a whole this element has two additional
points for expenditure on 51% Black owned entities. In the event that a Supplier or
Enterprise Development (MFP may not be used) candidate becomes a Generic entity, it is
now possible to claim the benefit for 5 years from the first initiative.

Overall, the majority of the changes will be positive for transformation in South Africa. For
more detail please see the pages that follow.

Amendments to Schedule 1

The most significant change is the following change made to absorption of learners.
“Absorption” means a measure of the Measured Entity’s ability to successfully secure a
long-term contract of employment for the Employee, Learner, Intern or Apprentice.
“Long-term contract of employment means a legal agreement between an individual and
an entity that this individual would work for until his or her mandatory date of retirement;”

Code Series 000 Statement 000 – General Framework

The following are significant changes to Statement 000, the general framework for
B-BBEE:
• The definition of Exempted Micro Enterprises (EME) now requires that Black

Ownership be measured on the Flow Through Basis (paragraph 4)
• The definition of Qualifying Small Enterprises or QSE, also requires that Black

Ownership be measured on the Flow Through Basis (paragraph 5)
• The scoring of unincorporated Joint Ventures is now included in the Generic

codes and not taken out of the Construction Sector codes (paragraph 7)
• The table in paragraph 9 summarises the Generic Scorecard

Code Series 300 Statement 300 – Skills Development

The Skills Development Scorecard has been changed as follows:

Other important changes are:
• The same spend cannot be claimed for Skills Development and Bursaries.
• The limitation of 15% of total skills development spend on categories F and G

training has been increased to 25%.
• You can claim salaries and wages, or stipends paid to staff on Category B, C

and D training and stipends paid under a bursary scheme.

Code Series 400 Statement 400 – Enterprise & Supplier Development

The Enterprise & Supplier Development Scorecard has been changed as follows:

Other important changes are:
• The multiplier of 1.2 times for procurement from First Time Suppliers has been

replaced by a multiplier of 1.2 times on Procurement from companies which
are at least 51% Black Owned or Black Women Owned using the Flow
Through principle.

Code Series 400 Statement 400 – Enterprise & Supplier Development

Other important changes are:

• Supplier and Development beneficiaries must be at least 51% Black Owned or
51% Black Women owned EME, QSE or Generic companies using the Flow
Through principle. For Generics to be recognised, they must have been
recognised as an EME or a QSE first, and such recognition is limited to 5 years
from first recognition.

• A Supplier Development beneficiary must form part of the company’s supply
chain.

• Companies can recognise procurement from at least 51% Black Owned or
51% Black Women owned Generic companies using the Flow Through
principle as EME or QSE. In order to be recognised, the Generics must have
been recognised as an EME or a QSE first, and such recognition is limited to 5
years from first recognition.

• The recognition percentage for Guarantees provided on behalf of a
beneficiary has been increased from 3% to 50%.

Siyaya’s learning interventions seek to narrow the performance gap by
encouraging an environment of interactive education which provides
learners the platform to achieve their full potential.

TRAINING & ASSESSMENT

OUR FULL QUALIFICATIONS SHORT COURSES & SKILLS PROGRAMMES

Our institution offers a wide spectrum of qualifications and Our registered Skills Programmes are Unit Standard
programmes that are continuously reviewed to ensure aligned and formally assessed enabling learners to gain
curriculum relevancy and delivery of a world class recognition towards Full Qualifications. Short courses are
not accredited, but still offer Interactive education
NQF NQF NQF which provides learners the platform to achieve their full
potential and narrowing the performance gap.
1LEVEL 2LEVEL 3LEVEL

GETC: Adult Basic NC: Business NC: Business COMPUTERS GENERIC BUSINESS
Education and Training Administration Services Administration
SMME NC: Production NC: Production MS Office Programmes - Computer Skills Finance
GETC: Wholesale and Technology Technology Basic Intermediate & Basic Intermediate &
Retail Adult Education NC: Specialist Hygiene NC: Hygiene and Advanced Levels Advanced Employment Equity
and Training and Cleaning Cleaning Supervision Performance
GETC: Hygiene NC: Wholesale and NC: Management Email & Internet Secretarial & Management
and Cleaning Retail Distribution Administration Supervision
NC: Wholesale and NC: Bookkeeping
GETC: Business Retail Operations Keyboard Skills & Customer Service &
Practice NC: New Venture Word Processing Professional Conduct
GETC: Manufacturing, Creation
Engineering and Related LIFE Operate in a Team
Activities
Self Development
Diversity Training Disciplinary Hearings

NQF NQF NQF Time Management SPECIALISED
LEVEL Personal Finance
4LEVEL 6LEVEL TETA Programmes Hygiene &
5 Cleaning

FETC: Bookkeeping Dip: Public Sector Dip: Office Values & Ethics W&R Programmes MERSETA Programmes
Accounting Administration
FETC: Production ND:Technical ND: Financial CONTACT US TO FIND OUT MORE ABOUT OUR
Technology Financial Accounting Accounting SHORT COURSES AND SKILLS PROGRAMS.
NC: Public Sector HC: Office CAREFUL WSP PLANNING CAN LEAD TO
Accounting Administration AND FULL QUALIFICATIONS FOR YOUR STAFF!
NC: Small Business Cert: Office MORE
Financial Management Administration

NC: New Venture FULL QUALIFICATION KEY: KZN ONLY
Creation
NC: Generic General Education and Training Certificate - -
Management National Certificate Accreditation No:
Further Education and Training Certificate
Higher Certificate Accreditation No: 17-QA/AC Accreditation No: Accreditation No:
National Diploma 9695 C/0836/13 17-QA/AC TETA 15-554
Diploma C/0836/13