The email below was sent out by a verification agency because SANAS found a certificate to be non-conformant.
SANAS (or the person that represented them – I wanted to write moron, but I thought that would be rude, even though I don't know who the moron was), decided to look into the codes and offer an interpretation. When they found that their interpretation differed to the VAs the issued a non-conformance.
If you want to know whether SANAS can do this then read here. They can't, that's not their job. I covered it in that post.
Just an important point to take note of, in preparing for your Clients 2025 Financial year, with regards to Enterprise & Supplier Development contributions.
The Definition of SD/ED contributions state – “ with the objective of contributing towards the development, sustainability and financial and operational independence of the Beneficiary”.
Attention is given to the Beneficiaries Independence.
Where the ME and the Beneficiary “share” the same shareholders and/or directors, the ME must show the Beneficiary’s, financial and operational independence.
- Is the Beneficiary an independent operating business or just an extension of the Measured Entity;
The initiative must show the development and empowerment of a new, independent business and not “taking money out of the one pocket and putting it in the other”.
This note is pure interpretation.
EXCEPT IT'S THE CORRECT INTERPRETATION
I can't retract my moron moniker. I still think that SANAS is almost always the problem. This blog is the voice of me and my crusade against arbitrary power. I know that most of the players in the industry feel the same way. But there's no real desire to cut them down to size, other than that very important SERR Synergy case.
Why is it correct then?
After ranting over this interpretation I decided to check the verification manual. My problem is that I can't argue with legislation if it's clear. I suppose you could argue that it only applies to enterprise development because the verification manual was published way before bolshie bob's economy destroying BEE codes.
4.10 The Verification Agency shall ensure that Enterprise Development contributions were with the specific objective of contributing to the development, sustainability and financial and operational independence of those beneficiaries (to expand – going concern, liquidity and control of directors on ED beneficiary)
My advice is make sure your beneficiaries don't have the same directors as your company. You can have a minority shareholding (49%), which I think is a good idea.
Remember people, BEE is a game. There isn't a single corporate in South Africa, big or small that will tell you in private that they believe in the process anymore. If it's a game then we must play by the clear rules – everything else is open to interpretation.