MAPULE MAHLULO: Most white SA companies don't know they're B-BBEE compliant


The recent announcement by the Minister of Tourism, Mmamoloko Kubayi-Ngubane, that disbursement of the R200-million COVID-19 Relief Fund will be done using the constitutionally-sound broad-based black economic empowerment (B-BBEE) legislation, sent many white-owned guesthouses, lodges and other tourism establishments into an unsurprising tailspin.

Conservative organisations like Solidarity and AfriForum went as far as taking Kubayi-Ngubane’s decision on review in the High Court in Pretoria, and she rightly won the case. Solidarity and AfriForum have since taken the matter to the Constitutional Court.

This legal wrangling is unnecessary - an overwhelming majority of these white-owned companies already carry B-BBEE status or exemption and they just don't know it. Those who don't know either haven't read the legislation or haven't sought the expert services of B-BBEE consultants.

It is worth noting that large tourism establishments did not utter a word on the matter because they have taken the time to study the regulations and in the spirit of social justice and undoing the injustices of the past, have taken steps to be B-BBEE compliant.

For example, Tsogo Sun has B-BBEE level 1 status, and so do the companies under its umbrella. There is one exception though, Emnotweni Sun, which is B-BBEE level 2 status; and to its credit, has the largest black female shareholding in the group of companies. It missed level 1 through unfortunate but easily avoidable miscalculations.

Emperor’s Palace is B-BBEE level 2 compliant, although their certificate expired just over a month ago on 11 April 2020, during the lockdown. But I am sure this will be rectified, if it hasn't already done so. Sun City is also a level 1 compliant hotel. Like I said, all the big tourism companies are rightfully B-BBEE certified.

So, where does all the unnecessary noise by smaller businesses come from? It is created by white-owned companies that are ironically exempted by virtue of being micro-enterprises, as per the B-BBEE Act. They are already carry B-BBEE status without knowing it. Here's how.

All companies in South Africa hold B-BBEE status if their turnover is less than R10-million a year. In the tourism sector, however, that threshold is R5-million per annum. That’s right - regardless of the racial or gender makeup of the company's ownership, there is a level of B-BBEE compliance based simply on how much money goes through the business. This is according to the B-BBEE Act.

All that an owner needs to do is complete a standard affidavit, declaring that their turnover is less than R10-million per annum, have it certified by a commissioner of oaths, and voilà! They are now B-BBEE compliant, thus granting them access through presentation of the affidavit access to the COVID-19 Tourism Relief Fund.

I don’t know why the lawyers and the department did not file this detail in their court papers. I also don’t know why AfriForum seemingly evades this information. But all that should have been said was that all white tourism companies in South Africa carry B-BBEE status as long as their annual turnover is less than R5 million.

Mapule Mahlulo is a director at Bayanda Business Academy and is the author of 'B-BBEE for Beginners'