Empowering Supplier

The Codes define an Empowering Supplier as follows:

An Empowering Supplier within a context of B-BBEE is a B-BBEE compliant entity, which is a good citizen South African entity, comply with all regulatory requirements of the country and should meet at least three if it is a large enterprise or one if it is a QSE of the following criteria:

1. At least 25% of cost of sales excluding labor cost and depreciation must be procured from local producers or local supplier in SA, for service industry labor cost are included but capped to 15%
2. Job creation – 50% of jobs created are for Black People provided that the number of Black employees since the immediate prior verified B-BBEE Measurement is maintained.
3. At least 25% transformation of raw material/beneficiation which include local manufacturing, production and/or assembly, and/or packaging.
4. Skills transfer – at least spend 12 days per annum of productivity deployed in assisting Black EME’s and QSE’s beneficiaries to increase their operation or financial capacity”

5. Labour Costs - At least 85% of labour costs should be paid to South African employees by service industry entities (only applicable to entities in the services industry) (new).

• Exempted Micro Enterprises and Start-ups are automatically recognized as Empowering Suppliers.
• QSEs must meet at least one of the five criteria to be classified as Empowering Suppliers.
• Generic Enterprises must meet at least three of the five criteria to be classified as Empowering Suppliers.

Whether the supplier is classified as an Empowering will determine if any points can be claimed in relation to expenditure with such client.

If the supplier IS an Empowering Supplier then recognition is attributable in relation to the expenditure with such supplier.

If the supplier is NOT an Empowering Supplier then no recognition is attributable in relation to the expenditure with such supplier, irrespective of their BEE credentials. (ie it’s as if they are Non-Compliant suppliers)

In terms of Notice 707 of 2016 gazetted on 28 October 2016: ALL companies will now automatically be deemed to be Empowering Suppliers until further notice.