This is the fourth article summarizing the draft amendments to DTIC's draft B-BBEE Code of Good Practice. For initial details, please see our previous article titled “Public Comment on B-BBEE Draft Good Practices and Draft Statement – Updated January 29, 2026.”
The draft statement can be accessed via the following hyperlink on the department's website: https://www.thedtic.gov.za/wp-content/uploads/DraftStatement-004-of-2026.pdf
Purpose of this statement
The purpose of this statement is to:
1.1 Provide guidance on the treatment of ownership of the following specialized enterprises for the purpose of Broad-based Black Economic Empowerment (B-BBEE):
1.1.1 Company Limited by Warranty.
1.1.2 Higher education institutions;
1.1.3 Nonprofit organizations;
1.1.4 Other enterprises exclusively owned by public bodies and state agencies. and
1.1.5 Public benefit system or organization.
1.2 Specify the scorecard that applies to the measured entity covered by this statement.
general principles
2.1 All state institutions and public bodies must apply the relevant codes of good practice issued under the amended B-BBEE Act in the following cases:
2.1.1 Determine the eligibility criteria for the issuance of licenses, concessions or other authorizations for economic activities under the law;
2.1.2 Developing and implementing a priority procurement policy.
2.1.3 Determination of eligibility criteria for sale of state-owned enterprises.
2.1.4 Developing standards for entering into partnerships with the private sector. and
2.1.5 Determining the criteria for awarding incentives, subsidies and investment schemes to support B-BBEE.
2.2 Public bodies and other enterprises exclusively owned by state agencies cannot be assessed for black ownership under Code Series 100.
2.3 Higher education institutions are not public institutions under the Public Finance Management Act 1999. Black property rights cannot be assessed based on Code Series 100.
2.4 Limited companies by guarantee and Section 21 companies do not hold shares. They cannot assess black property rights based on code series 100. This does not mean that companies limited by guarantee or Section 21 companies that share ownership in other companies cannot contribute to black ownership of such companies as defined in Statement 100.
2.5 Non-profit and public interest organizations generally do not have beneficial ownership and cannot assess black ownership under Code Series 100. This does not mean that nonprofits and public interest organizations share ownership in other companies. This is because broad ownership schemes such as those set out in Statement 100 cannot contribute to black ownership of such companies.
2.6 If any of the entities listed in paragraphs 1 and 2 require evidence of their B-BBEE compliance, they will use a special generic scorecard. If these entities are also eligible small businesses, use a specialized eligible small business scorecard.
2.7 An entity that is an exempted very small enterprise (EME) under this Statement will be deemed to have a B-BBEE status of 'Level 4' with a B-BBEE recognition level of 100%.
2.8 EME Enhanced B-BBEE Awareness Level:
2.8.1 Notwithstanding paragraph 2.7, EMEs with 75% or more black beneficiaries are eligible to be promoted to “Level 1 Contributor” with a B-BBEE recognition level of 135%. and
2.8.2 Notwithstanding paragraphs 2.7 and 2.8.1, EMEs with at least 51% Black Beneficiaries are eligible for promotion to “Level 2 Contributor” with a B-BBEE recognition level of 125%.
2.9 EMEs are only required to annually obtain an affidavit confirming that:
2.9.1 Annual gross income/allocated budget/total income is less than or equal to R10 million. and
2.9.2 Level of proportion of black beneficiaries.
2.10 Misrepresentation under paragraph 2.9 above constitutes a criminal offense under the amended B-BBEE Act.
2.11 Entities that are Qualified Small Enterprises (QSEs) use a specialized Qualified Small Enterprise Scorecard.
2.12 Notwithstanding paragraph 2.11, QSEs with 75% or more Black beneficiaries are eligible for promotion to “Level 1 Contributor” with a B-BBEE recognition level of 135%.
2.13 Notwithstanding paragraphs 2.11 and 2.12, a QSE with at least 51% Black Unitholders will be eligible for promotion to “Level 2 Contributor” with a B-BBEE recognition level of 125%.
2.14 QSEs with at least 51% black beneficiaries are only required to annually obtain an affidavit confirming that:
2.14.1 Total annual revenue/allocated budget/total revenue is less than or equal to R50 million. and
2.14.2 Level of proportion of black beneficiaries.
2.15 Misrepresentation under paragraph 2.14 above constitutes a criminal offense under the amended B-BBEE Act.
Specialized general purpose scorecard
3.1 The following table represents a special generic scorecard and contains the following:
3.1.1 Scorecard Elements;
3.1.2 Weighting; and
3.1.3 Code Series Reference (Code Series 100-500) that specifies the measurement and calculation mechanisms for each element of the scorecard.
3.2 All other terms of statements 000 to 500 apply mutatis mutandis to the measured entities covered by this statement.
Note that this change is underlined and includes the infamous “Transformation Fund.”
A scorecard dedicated to company and supplier development
There are various minor changes to point allocation that are beyond the scope of this article. However, readers are reminded to read the full draft statement available at the web link above.
transformation fund
Of the three additions, the most notable is the measurement of the “Annual Value of Company and Supplier Development Contributions to Transformation,” which is associated with 20 points and a contribution of “3% of NPAT or 0.3% of annual revenue/allocated budget/total revenue/discretionary spending.”
The following article highlights changes made to Code Series 600: Code of Good Practice for Qualified Small and Medium Enterprises (QSE).
