Multinationals and the BBBEE codes of good practice:

The codes acknowledge that there may be multinationals that have global practices preventing them from complying with the ownership element of BBBEE through the traditional sale of shares to black South Africans. The codes have made provision for the recognition of contributions in lieu of a direct sale of equity, referred to as equity equivalent contributions. Equity equivalents are subject to multinationals proving they do not enter into any partnership arrangements in other countries globally. The value of these equity equivalent contributions may be measured against 25 percent of the value of the multinational’s South African operations or against 4 percent of the total revenue from its South African operations annually over the period of continued measurement. Equity equivalence will entail a public programme/scheme and/or private programme/scheme designed to fulfil the requirements of BBBEE ownership. Equity equivalence may also entail a programme targeting investment or any other programme that promotes socioeconomic advancement or development within the South African economy. Equity equivalent contributions need to be approved by the Minister of Trade and Industry to qualify for ownership points on the scorecard. Approved equity equivalent programmes and points awarded may not form part of any other BBBEE element in the multinational’s BBBEE scorecard.