The Department of Trade and Industry (DTI) gazetted a Code of Good Practice (COGP) for the Defence Sector on 09 November 2018. The DTI’s COGP provides extensive detail of the requirements in Gazette Number 42021.
The priority elements with a 40% sub-minimum requirement are:
I. Ownership
II. Skills Development
III. Enterprise and Supplier Development
Non-compliance with these priority elements will result in the Discounting Principle being applied to Large Enterprises and QSEs; i.e. the loss of one BEE level.
Exempted Micro Enterprises are presumed to have a BEE Level 4 status with 100% recognition value if the annual turnover is less than R5 million per annum by use of an affidavit.
Note: 100% Black-owned EMEs will have a recognition status of 135% equivalent to a Level 1 BEE status and 51% Black-owned EMEs will have a recognition status of 125% equivalent to a Level 2 BEE status.
Qualifying small enterprises (QSEs) have a revenue between R5 million and R50 million per annum and a verified via a sworn affidavit or a CIPC issued certificate.
A Start-Up Enterprise is measured as an EME in the first year following its formation or incorporation.
Other elements of the scorecard:
IV. Management Control
V. Localisation
VI. Socio-Economic Development
Further detail will be provided in future articles.
BEERSA Article – 19 November 2018 – DTI and the Defense Sector Code (pdf)
