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On the 15th of June, the department of Trade and Industry (DTI) issued another gazette on the amendment of the revised Codes of Good Practice (RCoGP). This is the second time in three months that the DTI has given the public an opportunity to comment on proposed changes to the RCoGP. In March we saw the gazetting of the Youth Employment Services (Y.E.S.) initiative as well as proposals to the amendments of the Skills Development scorecard.

Download the gazetted amendments here

This latest gazette is primarily in two parts:

  1. The first focuses on changes to Schedule 1 of the Codes, which is mainly definitions. Some of the key definitions that have been clarified or changed are as follows:

a. Absorption – No longer includes the recognition of further educational advancement, but is now strictly learners who after completion are offered long term contracts;

b. Long-term contract – Has been basically defined as a permanent employment contract;

c. Designated Group Supplier definition – clarified as 51% ownership by Black Designated Groups;

d. Definition of qualifying Enterprise and Supplier Development beneficiaries – when reading all changes, these beneficiaries are 51% Black or 51% Black Women-Owned EMEs, QSEs or Generic Entities (utilising the flow-through principle);

2. The second part of the proposed changes focusses on the amendments to codes series 400– Enterprise and Supplier Development:

a. The ESD scorecard will be amended mainly by:

i. Condensing the EME and QSE indicator into one indicator with a target of 25%, worth 5 points. What I find interesting with this is that the wording seems to indicate an option between the two and not both. Interestingly, the DTI is also proposing that spend with at least 51% Black Owned or 51% Black Women-Owned generic entities be also recognised under this indicator;

ii. Spend with 51% Black Owned entities target has gone up to 50% from 40%, with 11 points allocations;

iii. Clarity on the indicative profit calculation for Enterprise and Supplier Development targets;

iv. Spend with 51% Black Owned or 51% Black Women-Owned suppliers will attract a further recognition multiplier of 2, while first time supplier recognition falls off;

v. Clarity on the difference between Enterprise Development and Supplier Development;

vi. Introduction of 51% Black Owned generics as beneficiaries for Enterprise and Supplier Development contributions; and

vii. Amendment to the ESD matrix – guarantees provided to ESD beneficiaries will now attract 50% recognition, up from 3%.

This article was written by Mkhaphi Nkosi. Should you require more information on contracting services as well as our other service offerings, please do not hesitate to contact us.

© Copyright 2018. Transcend Corporate Advisors. All Rights Reserved.

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