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Black industrialism, youth employment and
education funding key in proposed new BEE BEE
amendments
April 2018

“I understand that Government has proposed important amendments to
the current BEE Codes of Good Practice that will have a big impact on large
businesses in particular. My company qualifies as a generic enterprise, and
I was wondering what I need to prepare for should these amendments be
adopted.”

The Department of Trade and Industry published two draft statements on 29
March 2018 which contain a number of notable amendments to the current BEE
Codes of Good Practice and provide for a 60-day period to provide comments
on the proposed amendments (“Code Amendments”).
If the Code Amendments pass, it will afford generic companies (companies with
a turnover of more than R50 million) with the ability to also obtain automatic BEE
recognition as is currently the case with EME and QSE companies. This means
that a generic company with 51% or more black ownership will achieve an
automatic level 2 BEE status and a 100% black owned company will achieve an
automatic level 1 BEE status. This is a big advantage for such companies as they
will only need to verify their ownership to obtain these recognition levels and
won’t need to meet the other elements of the generic BEE scorecard. One can
presume that the inevitable and planned result of these Code Amendments
will be a general increase in the impetus of large companies to increase their
ownership to more than 51% black shareholding to leverage the benefits of
such automatic recognition, setting the scene for more black industrialists to
emerge. A consequence of automatic recognition for large companies may
however hold a reduced emphasis in the long run on other elements of the
BEE scorecard such as skills development, employment equity, preferential
procurement and enterprise and supplier development.
A brand-new element introduced by the Code Amendments relates to Youth
Employment Service or YES for short. This new element, if approved, will create
a framework for the education and employment of black youth between the
ages of 18 and 35, with companies that are successful in implementing YES
initiatives allowed to improve its BEE status by as much as two levels. This would
mean that a company that would otherwise achieve a level 4 rating could
potentially move up to a level 2 rating if it meets the requirements of the YES
element. The YES requirements can be summarised as follows:
• Must obtain the sub-minimum points for the three priority elements of your
BEE scorecard.
• Must meet the minimum required number of learners for the programme.
• The learners must be black youth.

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