NATALIE Clow-Wilson’s last article in Real Business, Pressure builds from procurement ratings, highlighted a very important point when it comes to the assessment of the BEE status of suppliers. The article observed that many companies have devised their own procurement questionnaires.

She argues that these questionnaires tend to lack any form of standardisation and they create a large administration overhead. These arguments are both extremely valid, but it should also be noted that they serve very little point as well.

At best a questionnaire will establish whether the supplier is black-owned, although there is no mechanism that can guarantee that fronting is not taking place. At worst, they alienate current and prospective suppliers and as a result negate the goodwill BEE is supposed to generate.

Clow-Wilson offers an independent rating as a solution to this problem. If every company is in possession of an objective BEE rating certificate, they will no longer need to fill in these forms and customers will be able easily to assess their suppliers’ BEE status. Her article offers a practical, long-term solution, but doesn’t offer immediate relief to both suppliers and customers.

The current reality facing all companies is that there are no official rating agencies, even there are plenty of agencies offering this service. There is an official body known as the Association of BEE Verification Agencies (www.abva.co.za) that aims to facilitate the accreditation of qualifying BEE verification agencies.

The regulations for accreditation (which can be found on the Abva website) are very clear about the fact that all rating agencies must be accredited by the South African National Accreditation System (Sanas).

Companies must be aware of agencies that purport to be accredited. It would seem that there are a fair amount of them out there and very few appear to have any association with Abva.

This still does not solve the problem of accreditation. There are two possible solutions.

Self-rating. There are commercial tools available that will assist companies with their BEE rating. All seem to be computer based, either PC-operated or online. If you are considering making use of a self-rating tool, you should ensure that they are completely up to date, in other words, do they make use of the codes of good practice at the very least.

They should also take into account the fact that there are different types of enterprises in this country, notably exempt micro enterprises (EMEs) and qualifying small enterprises (QSEs).

In this interim period, a self-rated assessment will carry as much weight as any other certificate. Self-rating has an added educational advantage. It will assist companies in becoming familiar with BEE requirements and how they impact on the business.

If you find yourself in a position where your customer insists on an independent rating certificate, it would be a good idea to look for the following:

Association with Abva. The accreditation process is both complex and expensive. The founding members have demonstrated their commitment to being officially rated, one can expect that the methodologies and processes they will use will be of the highest and most objective quality.

Reputation – there are a handful of rating agencies who have an impressive list of clients.

The rating agency must produce an independent BEE rating of their company. The codes are very clear that only superior contributors to BEE (65 points and up) will be considered for accreditation. If their score is lower than 65 points, ask them for a plan as to how they are going to become superior contributors in the very near future. If they fail this most basic test the chances are they won’t be accredited.

Has the rating agency provided you with any other BEE-related services (matchmaking, BEE consultation etc). Section 7.5.6 of statement 020 says that a verification must “ensure that none of its personnel involved in preparing a verification certificate for any client has provided any other services to that client for a period of at least 24 months preceding the date upon which such certificate is issued.” A rating certificate provided by a company that has offered those services will be deemed invalid.

Negotiate with the rating agency to return for a second rating once the codes have been finalised and they have been accredited as part of the fee.

The accreditation regulations state that all verifications provided by agencies before they are accredited must be updated within six months of the first agencies being accredited. A further requirement is that rating agencies have a 90-day grace period after the first rating agency has been accredited, to become accredited.

We can expect a fair amount of fly-by-night operators in these early days of broad-based black economic empowerment. Your susceptibility to these companies will be reduced if you educate your company and your staff on the latest BEE developments.

Janisch is CEO of Caird Consulting, which focuses on BEE transformation.