The Broad-Based Black Economic Empowerment (B-BBEE) Act of 2003 and its amendment in 2013 provide the legislative foundation for South Africa's empowerment framework. The Department of Trade, Industry and Competition (dtic, formerly dti) is the custodian of the framework and publishes the Codes of Good Practice under Section 9 of the Act. These Codes define the measurement criteria for B-BBEE compliance across all categories of business and are binding on all organs of state and state-owned entities when procuring goods and services.
The dti Generic Codes of Good Practice, last significantly amended in 2013 through Government Gazette 36928, apply to all entities that do not fall under a qualifying sector code. Sector codes are sector-specific adaptations of the Generic Codes published by relevant industry bodies and approved by the dti — examples include the ICT Sector Code, the Construction Sector Code, the Financial Sector Code, and the Property Sector Code. Where a valid sector code exists for your sector, it takes precedence over the Generic Codes. If you operate in a sector with a sector code, you must be verified and measured against that code, not the Generic Codes.
The Generic Codes establish three categories of measured entities. Exempted Micro Enterprises (EMEs) are entities with an annual turnover below R10 million. EMEs with 51% or more black ownership are automatically Level 1; EMEs with less than 51% black ownership are automatically Level 2. EMEs do not undergo a full scorecard assessment — they need only an EME affidavit confirmed by a commissioner of oaths, or a certificate from any CIPC-registered accounting officer. This is a critical compliance advantage for small businesses.
Qualifying Small Enterprises (QSEs) are entities with an annual turnover between R10 million and R50 million. QSEs use a simplified four-element scorecard (selecting the best four of the five elements), with each element weighted at 25 points. Generic Large Enterprises have an annual turnover above R50 million and must be assessed against the full five-element scorecard with no element selection. The five elements of the Generic Codes scorecard for Large Enterprises are: Ownership (25 points), Management Control (19 points), Skills Development (20 points), Enterprise and Supplier Development (40 points), and Socio-Economic Development (5 points), totalling 109 points.
The BBBEE status levels run from Level 1 (highest, requiring a score of 100+ points) through Level 8 (lowest, requiring 40–49 points). Non-compliant contributors score below 40 points or have insufficient black ownership for EME or QSE qualification. Each level corresponds to a recognition percentage for procurement purposes: Level 1 and 2 contributors are recognised at 135% and 125% respectively — meaning that a Level 1 supplier is treated as if they were providing 135% of the goods/services value for procurement recognition. Levels 3 and 4 carry 110% and 100% recognition, while Levels 5 through 8 carry 80%, 60%, 50%, and 10% respectively.
SANAS (South African National Accreditation System) is the body responsible for accrediting verification agencies. Only a SANAS-accredited B-BBEE verification agency may issue a B-BBEE verification certificate that is recognised for government procurement purposes. EME and QSE affidavits do not require SANAS verification but must meet the format prescribed in the Codes. Procurement officials are entitled — and required — to reject B-BBEE certificates issued by non-SANAS-accredited agencies. The SANAS website (sanas.co.za) maintains a public register of all accredited verification agencies.