Draft BEE regulations will impact on licences and concessions

“A friend mentioned that getting a licence is going to be more difficult in future because of new changes to BEE regulations which will affect all applications for licences and concessions. Is this true?”

This is true. Draft BEE regulations were published for comment in the Government Gazette on 17 February 2016 which deal with a number of BEE issues such as the establishment and operation of a BEE Commission and the BEE reporting requirements of organs of state and public entities. But importantly, included in these draft regulations are provisions relating to the criteria for issuing licences, concessions and other authorisations.

The draft regulations require that in order to determine the qualifying criteria for a licence, concession or other authorisation, a public entity or organ of state must use the BEE recognition levels 1 to 8 as set out in the BEE Codes of Good Practice when considering the issuing of a licence, concession or authorisation and must afford greater consideration to companies who are at least 51% black owned or black women owned whilst ensuring that the information is verified by a B-BBEE verification professional.

The effect of these requirements is that a BEE certificate as well as a company’s percentage of black  ownership could become significantly more important in future when applying for any licence, concession or other authorisation. This will include applications for liquor licences, water licences, import and export licences and mining licences to name but a few. The wording of the draft regulations are so wide that their reach will potentially impact on most businesses.

It is important to also note that the effects of the new BEE Codes of Good Practice which are now in effect will mean that most entities will not be able to achieve the same BEE levels as previously achieved under the old BEE Codes and this will also affect licence applications to organs of state and public entities. Our advice is to act pre-emptively and work with a BEE specialist to ensure that the planning for your business takes account of this eventuality to ensure that you achieve the highest possible BEE level and ensure that you qualify for that important licence, concession orauthorisation should these draft regulations eventually be promulgated.

April 11, 2016

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