- Date Posted: April 15, 2015
- Author: Deon Oberholzer
The Roles and Responsibilities of B-BBEE Verification Agencies
B-BBEE verification agencies must be SANAS accredited. In order to become SANAS accredited, the agencies must apply in writing and provide the required evidence of meeting the requirements set out by SANAS.
SANAS does not issue B-BBEE certificates; the verification agencies do so. SANAS accredits the verification agencies which have applied to and have met the accreditation requirements.
Once accredited, the verification agencies may carry out specific duties that are not considered consultancy services or a conflict of interest. Such duties include the arrangement of training or training facilitation, where such relates to the B-BBEE requirements and where the training is limited to information that is available in the public domain. The agencies may publish upon request on the basis of their reputation and their specific interpretations of the verification requirements.
The verification agencies may furthermore partake in activities before verification that determine the entity’s readiness for verification, as long as such participation doesn’t lead to any recommendations in contravention with SANAS allowable duties and actions. Such agencies may also do verification visits to identify areas that can be improved upon, without providing the entities with consulting services.
Verification agencies have the tasks of assessing, verifying and validating BEE information, which includes disclosed and undisclosed information related to the measured entity’s BEE compliance. The verification must be done on the principles of the B-BBEE Codes of Good Practice which if done before 1 May 2015, will be based on the existing Codes and after 30 April 2015, based on the Amended BEE Codes. The agencies must also evaluate the transactions and compliance as related to BEE, in order to assess the effective enhancement of Black Economic Empowerment that includes the awarding of a relevant BEE score, based on the assessment of the transactions or compliance as presented by the measured entities.
Verification agencies must conduct verifications impartially and objectively. This means that there may not be any conflict of interest and the decisions must be independent and free from prejudice. The agencies must be able to show that their verifications have been done objectively without improper or undue influence of interests and parties.
Impartiality can be affected by self-interest where an enterprise or person acts on behalf of financial self-interest or self-reviewing is done. This is where the agency provides consultancy services to the client before verification and then verifies the client. Where the agency did provide consultancy services, it is essential to ensure that the client isn’t measured by the same agency.
Verification agencies must demonstrate their skills and knowledge regarding BEE and must have the required resources and infrastructure to ensure objective and fair verification services. Verification agencies must be immune to pressure from the measured entity for a specific EE compliance level. The measured entity is responsible for its own compliance and documentation and cannot expect the agencies to do the preparation for them or act in their interest, where such interest is in conflict with the principles and requirements of BEE.
The agencies are furthermore required to ensure openness, which entails the provision of public access to information about the verification process and status measurements. In addition, the BEE verification agencies must keep proprietary information of measured entities confidential, although they may disclose the measured results without breaching confidentiality requirements. Where measured parties have complaints about the outcome of the measurements, they must have the right, if their complaints are valid, to have such investigated.
* Deon Oberholzer is Group CEO of Gestalt, a leading BEE Consultancy. Gestalt offers unique legitimate solutions for maximum BEE compliance, using cost effective solutions while ensuring maximum business benefit to their clients.