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

Amended Codes of Good Practice (2013)

Amended Code Series 500: Measurement of the Socio-Economic Development Elements of Broad-Based Black Economic Empowerment

Statement 500: The General Principles for Measuring the Socio-Economic Development Element

3. Key Measurement Principles

 

3.1 General principles:

 

3.1.1 Measured Entities receive recognition for any Socio-Economic Development Contributions that are quantifiable as a monetary value using a Standard Valuation Method.

 

3.1.2 Socio-Economic Development Contributions of any Measured Entity are recognisable annually;

 

3.1.2.1 No portion of the value of any Socio-Economic Development contribution that is payable to the beneficiary after the date of measurement can form part of any calculation under this statement

 

3.2 Socio- Economic Development Contributions:

 

3.2.1 Socio-Economic Development Contributions consist of monetary or non-monetary contributions actually initiated and implemented in favour of beneficiaries by a Measured Entity with the specific objective of facilitating income generating activities for targeted beneficiaries.

 

3.2.2 The full value of Socio-Economic Development Contributions made to beneficiaries is recognisable if at least 75% of the value directly benefits black people.

 

3.2.3 If less than 75% of the full value of Socia-Economic Development Contributions directly benefits black people, the value of the contribution made multiplied by the percentage that benefits black people, is recognisable.

 

3.2.4 The following is a non-exhaustive list of Socia-Economic Development Contributions:

 

3.2.4.1. grant Contributions to beneficiaries of Socia-Economic Development Contributions;

 

3.2.4.2. guarantees given or security provided for beneficiaries;

 

3.2.4.3. direct costs incurred by a Measured Entity in assisting beneficiaries;

 

3.2.4.4. overhead costs of a Measured Entity directly attributable to Socio-Economic Development Contributions;

 

3.2.4.5. developmental capital advanced to beneficiary communities;

 

3.2.4.6. preferential terms granted by a Measured Entity for its supply of goods or services to beneficiary communities;

 

3.2.4.7. payments made by the Measured Entity to third parties to perform socia-economic development on the Measured Entity's behalf;

 

3.2.4.8. subject to paragraph 3.2.5 provision of training or mentoring to beneficiary communities which will assist them to increase their financial capacity; and

 

3.2.4.9. subject to paragraph 3.2.6 the maintenance by the Measured Entity of a socio-economic development unit which focuses only on support of beneficiaries and beneficiary communities.

 

3.2.5 providing training or mentoring to beneficiary communities by a Measured Entity. (Such contributions are measurable by quantifying the cost of time (excluding travel or commuting time) spent by staff or management of the Measured Entity in carrying out such initiatives. A clear justification must support any claim for time costs incurred, commensurate with the seniority and expertise of the trainer or mentor).

 

3.2.6 Maintaining a socio-economic development unit by the Measured Entity. (Only that portion of salaries and wages attributable to time spent by the staff in, and the other expenses related to, promoting and implementing socio-economic development constitute contributions.)

 

3.2.7 Payments made by the Measure Entity to third parties to perform socioeconomic development on the Measurement Entity's behalf.