A large number of verification agencies exist in South Africa to assist business owners with obtaining their Broad-Based Black Economic Empowerment (BBBEE) certificates every year. These agencies play an essential role in the effective implementation and functioning of BBBEE policy; most medium and large-sized businesses cannot acquire BBBEE certificates on their own. While the smallest enterprises – Exempt Micro Enterprises (EMEs) may be able to, even they often rely on verification agencies for advice and support. The scorecard is complicated and can be confusing. But how do you know that you can trust a verification agency?
To avoid unscrupulous people taking advantage of the opportunities provided by BBBEE and posing as verification agents, South African legislation mandates that all BBBEE verification agencies be formally accredited. Up until the end of September this year, they could be accredited by one of two national bodies: the South African National Accreditation System (SANAS) or (through individual members) the Independent Regulatory Board for Auditors (IRBA). Both were acceptable; the choice tended to be based on the type of staff working for the agency. For example, long-standing auditors were likely to be accredited by the IRBA. However, the IRBA is no longer an accrediting body.
The IRBA was appointed in 2012 as an Approved Regulatory Body to approve registered auditors who met the requirements to offer BBBEE verification services. However, the body issued a communique in March to inform agents of its intention to formally withdraw from the accreditation role on September 30th, with a transitional period of three months. IRBA agents that received requests from BBBEE verification agencies up until the end of September have until the end of the year to issue them. IRBA-accredited verification agencies wishing to continue issuing BBBEE certificates will have to apply to SANAS for accreditation.
SANAS was formed by the Department of Trade and Industry in 2007, to develop accreditation standards for verification agencies. The first agencies were officially accredited in early 2009. The ongoing importance of SANAS cannot be understated. Their accreditation provides the clients of verification agencies with the assurance that their BBBEE certificates will be valid, and their scorecard ratings (from Level one to eight) accurate.
A BBBEE certificate, while not compulsory, offers multiple benefits to businesses. These include the ability to tender for government projects, access to the lucrative chain of preferential procurement, and a competitive edge over non-certified companies in the field. It also has positive effects on the image of the business, which can be leveraged in marketing strategies – it looks good if you are making the effort to transform society. As a result, BBBEE certificates are in high demand – and some organisations purporting to be verification agencies are issuing ones that are fake or invalid for their own financial gain.
BBBEE rankings are meaningless unless they can be verified, and certificates that are not valid can have serious consequences for businesses. As a result, the accreditation of verification agencies should be carefully checked before engaging with them. Clients can look for the SANAS logo on the website of the agency, and have every right to ask to see the accreditation certificate.
Cenfed is a BBBEE verification agency that enjoys IRBA accreditation of its auditors and is in the process of being accredited by SANAS. Clients can rest assured that their BBBEE certificate will be 100% accurate and valid, and all advice provided is based on experience and expertise. To find out more about how we can help your business, get in touch.