Broad-Based Black Economic Empowerment Act, 2003 (Act No. 53 of 2003)Codes of Good Practice on Black Economic EmpowermentIntegrated Transport Sector CodesB-BBEE Sub-Sector Code for Public Sector - Transport6. Appendix B: Enterprise Development Enhanced Recognition Factor MechanismE. Enhanced Recognition Determination |
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
1.1 | Auditors* or an accredited verification agency will measure progress against the plan of development. |
1.2 | Auditors* or an accredited verification agency will review the enterprise development documentation |
1.3 | Auditors* 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
2.1 | When the above 3 steps are achieved, the auditor can deem that the enterprise development has been attained and that the development programme is compliant. |
2.2 | The 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 |