The Latest on the Accreditation of Verification Agencies

Posted by Lisa Tait
Monday, 9 March 2009  |  0 comments
Lisa Tait is a strategist at Transcend Corporate Advisors
Read all of Lisa Tait's Posts

Most of us working in the field of BEE, either as consultants or as transformation champions in our respective companies, have been waiting for some time for news about the accreditation of verification agencies, thereby making those agencies compliant with the Broad-based BEE Codes of Good Practice. The agency tasked with managing the accreditations is SANAS, a branch of the DTI. Well, it has taken almost 2 years, but we now, finally, have our first batch of verification agencies accredited by SANAS.

The consequence of accreditation for clients and companies operating in South Africa is the following:

Only verification certificates from verification agencies which are accredited will be accepted by other verification agencies as being B-BBEE compliant for the purposes of determining a preferential procurement score.

What this essentially means is that if you do not have a verification certificate for your company from an agency which is accredited, then you client cannot count procurement from as being broad-based BEE complaint when your client get verified.

This is a rule of ABVA (The association of BEE Verification Agencies), as well as being a part of the SANAS accreditation standard. It is a direct contravention of the actual Codes of Good Practice, which state that verification is, “encouraged”, thereby inferring that self assessments are acceptable. However, without engaging in this debate, or the constitutionality of the ABVA and SANAS rules on this issue, suffice to say that this is the rule that is being applied by verification agencies currently.

However, there are a few exceptions to the rule. In the main, ABVA has decided that there will be a phasing out period for the use of certificates from non-accredited verification agencies. The ABVA directive says as follows:

The commencement of the period from which certain certificates will no longer be able to be used is 1 July 2009.

As from 1 July 2009, only verification certificates from agencies which have either been accredited or undergone a pre assessment by SANAS (and have received a letter stating that they have “passed” the pre assessment phase as of 30 June 2009, may be accepted in the marketplace.

This first batch comprises 11 agencies, and includes many of the large, well known agencies, such as Honeycomb, NERA and Empowerdex. We have been given to understand that SANAS intends to accredit a further similar size batch of agencies in the near future. The small number of agencies accredited may seem surprising to many, and the question may be asked what will happen to those which have not yet, or will not ever be accredited in the future? It is important to ensure that you and your company understand clearly what this regulatory environment entails and what the consequences are. Make sure that you engage an accredited verification agency, or an agency which has been issued with a pre assessment letter, to perform your next B-BBEE audit. The consequences of not doing so may cost you a significant amount of wasted time and money, not to mention the lost business opportunities while you get organised.

Should you require any additional advice on this matter, please contact Lisa Tait at Transcend. Transcend Corporate Advisors is a consultancy operating on the BEE and sustainability environment. Transcend is not a verification agency. The SANAS and ABVA rules prevent companies from offering both strategy and audit services. Transcend as a strategy company, offers verification strategy services, and engages with many verification agencies on behalf of clients to ensure that an optimum score is derived. We also offer verification preparation services, wherein we assist our client to prepare adequately for a pending verification with a view to ensuring that the best score is derived within the ambit of the Code.

A list of the latest accredited verification agencies can be found on the ABVA website. 

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