Qualifying as an EME in the Amended Construction Sector Codes

On the 01st of December 2017, the amended Construction Sector Codes were published via Government Gazette No 41287.

The gazette may be downloaded here

For this article, we will focus on the qualifying criteria for an EME in the amended codes with reference to obtaining an enhanced status (an improved outcome) Note that other articles detailing info for the Construction Sector Code have been published on our website and should be consulted too.

For the purposes of measurement in terms of the Revised Construction Sector Codes, an enterprise will qualify as an exempted Micro Enterprise (EME) under the following circumstances:

For Contractors – Any enterprise with a total annual revenue of R10 million or less
For BEP’s – Any enterprise with a total annual revenue of R 6 million or less.

An Exempted Micro-Enterprise with the black ownership levels shown below calculated applying the flow through principle is deemed to have the following B-BBEE Status:

  • If less than 30% Black Owned then “Level Five Contributor” having a B-BBEE recognition level of 80%;
  • If at least 30% Black Owned but less than 51% Black Owned then “Level Four Contributor” having a B-BBEE recognition level of 100%;
  • If at least 51% Black Owned but less than 100% Black Owned, then “Level Two Contributor” having a B-BBEE recognition level of 125%;
  • If 100% Black Owned then “Level One Contributor” having a B-BBEE recognition level of 135%;

Enhanced B-BBEE Status Level for an Exempted Micro-Enterprise:

In addition to the above, an EME that is less than 100% black owned, is allowed to maximise their points and move to a higher B-BBEE recognition level through one of the following three means:

  • Obtain measurement in terms of the QSE Scorecard as a whole and apply the B-BBEE Status Level and B-BBEE Recognition Level so determined; or
  • Obtain measurement in terms of the Skills Development expenditure category in paragraph 1.1 of Statement CSC603 of the QSE Scorecard, and/or only if full points (excluding the bonus points) are achieved for this category the B-BBEE Status Level and corresponding B-BBEE Recognition Level of the EME will be enhanced by one level, or
  • Obtain measurement in terms of the Supplier Development Expenditure category of the QSE Scorecard (paragraph 2.1 of Statement CSC604) only, and only if full points are achieved for this category the B-BBEE Status Level and corresponding B-BBEE Recognition Level of the EME will be enhanced by one level.

This article is provided for information only and does not constitute the provision of professional advice of any kind.

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