The B-BBEE Commission recently put out a notice listing organisations that currently have invalid B-BBEE certificates in circulation. This was done as part of their mandate in section 13F (1) (a) to oversee, supervise and promote adherence to the B-BBEE Act in the interest of the public. Organisations identified were advised to withdraw the said B-BBEE certificates and given an undertaking to not use them.
To address this issue, the article below outlines the non-negotiable elements that must appear on a B-BBEE certificate and red flag areas. Remember invalid B-BBEE certificates will have a negative impact on the Imperial Sasfin Preferential Procurement Scorecard.
Beware “It’s a fake!”
It is logical to surmise that an organisation presenting a fake B-BBEE certificate as part of their credentials operates with no conscience. When an organisation is spending the time, money and resources on transforming, accepting a fake B-BBEE certificate, either consciously or subconsciously, both creates an illusion of transformation and defeats the objective of an organisation’s investment in transforming.
Although many organisations go to lengths to verify the legitimacy of B-BBEE certificates presented, others accept them at face value. Often this is a result of a lack of resources, budget or a holistic understanding of the impact that accepting a fake B-BBEE certificate has on an organisation’s scorecard.
A trained eye will easily identify a fake B-BBEE certificate. Hereunder are non-negotiable elements that must appear on a valid B-BBEE certificate, as well as red flags to look out for and tips to ensuring you receive a valid B-BBEE certificate.
Non-negotiable elements of a B-BBEE Certificate
- SANAS accreditation to be accompanied by the SANAS accreditation logo
- The allocated SANAS accreditation number issued to the verification agency
- B-BBEE certificate number
- Level of compliance
- Date of issue and expiry
- Scorecard type
- Measurement criteria either on a Generic or Sector Code
- Points attainted per element with specific reference to “Black” and “Black” Women Ownership
- Application of the discounting principle
- Empowering supplier status
- Procurement recognition
- Verification agency information:
- Name and/or the logo
- Company registration number
- Name and signature of the person responsible for final sign-off
- Measured entity information:
- Full registered name
- Full trading name
- Company registration number
- Company VAT Number, if applicable
- Full physical address of the company
Hereunder is a non-exhaustive list of typical traits found in fake B-BBEE certificates.
- Spelling mistakes
- The variation of font differences, which include the consistency of the use of the upper and lower case
- A certificate that is not issued by a SANAS accredited verification agency. This applies to Large Enterprises and Qualifying Small Enterprises (QSEs) that have more than 51% “Black” Ownership
- Incorrect SANAS logo
- SANAS accreditation number does not match the one allocated to the verification agency
- Measured on the incorrect scorecard
- Ownership criteria that does not match the B-BBEE status level
- Preferential Procurement recognition that is not aligning to recognition levels
- When a VAT number on a B-BBEE certificate differs to the one appearing on an invoice presented for payment
- If a site visit is not conducted during the verification process
- When a B-BBEE solution through a B-BBEE consultant dictates the use of services of a specific verification agency
For peace of mind, organisations can always contact the verification agency that issued the B-BBEE certificate directly and provide the certificate number to verify the validity of the B-BBEE certificate. In most cases, the supplier application process double checks the information provided on the B-BBEE certificate.
It must be noted that a B-BBEE certificate issued by a verification agency to an Exempt Micro Enterprise (EME) or a QSE that has more than 51% “Black” Ownership is an invalid certificate. These organisations only have to provide a valid affidavit.
Organisations issued with a B-BBEE certificate must take the following into account:
- An EME and QSE with more than 51% “Black” Ownership only needs to provide an affidavit
- Never accept a B-BBEE certificate issued by a third-party
- Never pay cash for a B-BBEE certificate -always ensure there is a paper trail to the issuer