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Letter From Our CEO - October 2020

Just over two months’ time everyone will be taking their annual festive season break. What a tough year 2020 has been for everyone! COVID, retrenchments, companies resizing, TERS UIF, Amendments to the EE Act, remote verifications coupled with the state of the world have not been easy on business owners and employees alike. Again, I would like to express our sincere condolences to any loved ones that you may have lost over the last seven months.

Our biggest challenge these days revolves around the SANAS R47-03 verifications on BEE. Historically Consultants worked with B-BBEE Rating Agencies. Consultants acted representatives for clients during the B-BBEE Verification Process. SANAS had no control over B-BBEE Consultants. This has been identified by SANAS as a potential risk of conflict of interest for SANAS. Verifications are now no longer what they used to be. They are now fully fledged audits. We believe that consultants will still work closely with Verification agencies to ensure the best result for their clients.

We have seen a huge increase in the request from verification companies for more and more information as dictated by SANAS. File sizes for audit have increased more than 5-fold. This leads to a lot of frustration for companies and we find ourselves in the middle of the bun fight having to play good cop bad cop between companies and verification companies. The bottom line is that if you do not submit the additional info, and stick to your time lines, no matter how bitter the pill, verification companies are simply not permitted to issue the points as per the R47-03. It will not help to fight or argue with your verification company they have specific management policies and procedures to follow as governed by SANAS. The success of a BEE audit now lies in the substantive proof and correct calculations prior to the audit taking place and in meeting your deadlines as per the verification plan.

It now seems like SANAS is now more limited in accepting “substance over form stance” when interpreting the provisions of the Codes, any reasonable interpretation consistent with the objectives of the B-BBEE Act and the B-BBEE Strategy must take precedence" TO A LARGE EXTENT is no longer just a reasonable interpretation! If a verification agency cannot verify the entity on paper/ or with substantive proof, then points may not be allocated. This we believe contrasts with the Paragraphs 2.1 and 2.2 of the Codes. Verification companies are being put, (what we believe), under unreasonable pressure by SANAS to ensure that every tick box is met. (Read here for more information on the R47-03)

BEE Verifications are tough – there is a huge amount of work that goes into a verification as per the R47-03. Ignorance of the law is no excuse; the Measured Entity will remain liable for correct information supplied. Consulting companies may still get involved with your onsite if you appoint them and give them your power of attorney to represent you in the verification process as your representative consultant.

You need to ensure all requests are in writing regarding special circumstances, certificate issue date or views, do not assume anything. It is a daunting task even for the most experienced BEE practitioner – if we can help please feel free to ask.

Stay safe and take care


Hilton Johnson

CEO – Compliance Hub

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