Authored by: Ugendran Odayar and Amber von Steiger
Like many other changes being experienced by companies as a result of COVID-19, the requirement for an on-site visit as part of the BEE verification process prescribed by the South Africa National Accreditation System (SANAS) has been amended to take into account COVID-19.
Prior to COVID-19, SANAS required BEE verification agents to verify and evaluate companyies based on information confirmed through an on-site visit . Without this on-site assessment, no BEE score could be given.
On 18 March 2020, in order to cater for the effects of COVID-19, SANAS reviewed the verification process and will now allow the following:
- Verification agents may conduct on-site visits remotely via any suitable recorded video communication channel. This change was welcomed to promote social distancing however it has since become impractical due to the lockdown which was announced a few days after the SANAS notice.
- All necessary documents required by the verification agent must still be provided. Where these documents cannot be provided electronically, for example if the content of these documents is highly confidential, they must be viewed by the verification agent via any suitable video communication channel – provided that the video is recorded. If the recording would cause confidentiality concerns, the company can consider uploading the document into a virtual data room.
- Interviews may be conducted via any suitable video/teleconferencing communication channel – provided that the interview must be recorded and saved;
- A director of a company must provide a sworn affidavit confirming the physical location of the company and that all information provided to the verification agent is true and correct. The practical ability to get this affidavit commissioned during the lockdown may however be problematic; and
- The company is required to provide proof of physical address, which is not older than three months.
Practically, if a company’s BEE certificate expires during the lockdown and a verification agent cannot complete their verification to issue a new BEE certificate this may result in the following:
- a breach of contractual obligations where the company has agreed to obtain or maintain a particular BEE level or ownership target;
- a disincentive for clients to procure goods or services from the company as they will not be able to claim BEE points for the spend; or
- the company not being able to respond to RFPs or Bids (in the private or public sector) as they will be unable to provide evidence of their BEE status which is often a gatekeeping criteria to any opportunity.
We therefore suggest that each company does the following:
- checks the date that their existing BEE certificate expires;
- if it is within the next few months (or particularly the next few weeks), engages with their verification agent to ensure that they will be able to conduct the verification and issue the certificate timeously;
- reviews their contractual arrangements to understand their ongoing obligations to maintain a BEE status; and
- to the extent that their clients rely on the BEE status of the company, engages with the clients to explain the reason for the delay and mitigate any unnecessary concerns that may be raised through a lapse in the BEE certificate.
This revised procedure is temporary and will be reviewed by SANAS on a monthly basis. Nevertheless, it is positive to see measures being put in place by SANAS to mitigate the effects of COVID-19 on companies. It is yet to be seen whether SANAS reviews this procedure further to cater for the lockdown.
With acknowledgements to Norton Rose Fulbright…