Under the new codes for Broad-Based Black Economic Empowerment (BBBEE), JSE-listed plastic packaging group Astrapak Limited (Astrapak) recently achieved generic certification as a Level 4 BBBEE contributor.
The revised Codes of Good Practice, effective 1 May 2015, are widely acknowledged to be significantly more challenging than their predecessors, and have far-reaching potential to automatically downgrade BBBEE status. With their implementation, many companies are dropping back at least one level in certification, sometimes even more.
Despite Astrapak expectedly moving down from being a level 3 BBBEE contributor, the group is pleased with the improvement in overall scores year-on-year. Its BBBEE status was certified as 100 percent in terms of procurement; black ownership at 54.24 percent and black women ownership at 15.58 percent.
The group was also certified as an “Empowering Supplier”, meaning it is a good citizen of South Africa and fulfils the regulatory compliance of the country. This status is crucial in order to be included in the preferential procurement calculations of customers and clients of a business.
Astrapak CEO Robin Moore describes this certification as a pleasing outcome and a solid score, which forms the foundation for further transformational effort. ‘We are focussed on economically empowering the smaller players and companies in our industry and value chain, so that they can become incorporated into the mainstream economy of the country.’
Tackling the challenge
The more stringent codes have notably changed the way in which BBBEE status is calculated, increasing the number of points required to achieve a particular level, and adjusting the weightings attaching to various elements. The revisions also reduce the number of measurement elements, down from seven to five, by combining enterprise development/preferential procurement and management control/employment equity.
Astrapak’s BBBEE scorecard further revealed the achievement of targets for ownership at 25/25 and socio-economic development at 5/5. Skills development achieved a high score of 16.06/20, reflecting efforts to transfer skills and uplift employees.
‘By developing competence and people who are skilled, our employee profile begins to reflect South African population demographics and addresses inequality,’ concludes Moore. The certification was performed by Renaissance SA Ratings, a SANAS accredited BEE verification agency.
Astrapak announced on 20 April it has made significant progress with its turnaround strategy. Read more here.