BLACK ECONOMIC EMPOWERMENT SUPPLIER QUESTIONNAIRE
Notes:
- The following questions should be completed comprehensively in order for Cisco to conduct a representative BEE evaluation of your company.
- An unwillingness to provide information as requested will result in Cisco allocating a zero score for that area of the questionnaire.
- Cisco reserves the right to request any additional information that would be deemed necessary to verify any answers provided by a company.
- Misrepresentation of company status with respect to answers provided in this submission will result in disqualification from the evaluation process or cancellation of contracts as deemed appropriate.
- The company will deem persons completing this questionnaire as individuals authorised to do so.
- Blacks shall mean Africans, Coloureds, Indians, Black Women and Disabled people, excluding naturalised South Africans.
- Blacks in the context of this questionnaire shall be applicable to South African Citizens only.
- It is imperative that your company declare their annual turnover as this information will enable evaluation of your response according to the size of your company and where applicable some enterprise development opportunities.
- Any form of fronting and any other ways of doing business with Cisco that may be deemed to be illegal by Cisco shall be construed as misrepresentation and Cisco shall have the right to terminate the contract and blacklist the concerned company/bidder for a period to be determined by Cisco alone. Please refer to Annexure A par 16.0.
- Submit any recent verification of your company’s BBBEE including proof of black shareholding.
- Please note: Cisco applies the flow-through principle in BEE evaluations.
- Companies with complex shareholding structures should provide a detailed shareholding structure highlighting the effective shareholding of the Blacks in all the different entities where they have indicated black shareholding in section 1 of this questionnaire.
- Blacks shall mean Africans, Coloureds, Indians, Black Women and Disabled people, excluding naturalised South Africans.
- Blacks in the context of this questionnaire shall be applicable to South African Citizens only.
- Companies with complex shareholding structures should provide a detailed shareholding structure highlighting the effective shareholding of the Blacks in all the different entities where they have indicated black shareholding in section 1 of this questionnaire.
1.0 Black People
Shall mean categories of persons who were disadvantaged by unfair discrimination on the basis of race and gender and were legally denied the right to vote prior to 27 April 1994. “Black people”,“ Black persons” or blacks shall be a generic term which means the following:
- Africans
- Coloureds
- Indians
- Black Women
- Designated Groups
- Including naturalised Black South Africans who became “citizens” before 27 April 1994.
2.0 Black Supplier
Shall mean a legal entity that is 50.1% and above (more than fifty percent) beneficially owned and managed by Black people. Black Supplier shall also mean any natural person or legal entity that is bona fide South African as defined in clause 1.0 above, who are commercially active on an ongoing basis to add commercial value and is certified as such by Cisco’s BEE Department.
3.0 Black Management
Shall mean Black executive directors, managers, members including partners who posses authority to change and influence material decisions in the business. These managers shall be actively involved in the daily operations of the business.
4.0 Black Control
Shall mean Black economic interests and as per clause 3.0 above.
5.0 Black Owned
For purposes of determining whether a business is a Black Owned, the following shall be taken into consideration:-
5.1 Ownership shall mean equity ownership interest together with control over voting rights attaching to that equity interest. This shall exclude any share options not exercised yet and warehoused shares,
5.2 for a public listed company the Black owner(s) shall effectively hold at least 35% (thirty five percent) of the listed shares. This shall be institutionalised black shareholding and not shares traded through Stock Exchange.
5.3 for a private business entity, the Black owner(s) shall effectively hold at least 50.1% (more than fifty percent) of the ordinary shares; and
5.4 where a voting pool arrangement confers control by Black shareholders on the affairs of the company.
5.5 in addition, such ownership shall be real and continuing, and shall go beyond the mere indicia of ownership of the business reflected in the ownership documents (refer to clause 5.2 in this regard); and
5.6 the Black Supplier shall enjoy the customary incidents of ownership and shall share the risks and profits commensurate with the ownership interests, as demonstrated by an examination of the substance, rather than the form of ownership arrangement.
5.7 Economic Interest shall mean a member’s entitlement to receive any payment from the company, which arises by virtue of the member’s holding any equity interest. This shall include a shareholder’s entitlement to dividends of a company limited by shareholding and a beneficiary’s entitlement to share in the distributions of a trading trust.
5.8 Equity Interest shall mean a portion of the equity which the individual members of the company have as claims against the company or against the other members of that company, as the case may be, expressed as a percentage of the total equity in that company.
5.9 Unrestricted as used in relation to Voting Rights or Economic Interest means that such Voting Rights and / or Economic Interest (as the Case may be) are not subject to a Restriction. For the avoidance of doubt, any lawful arrangement whereby a Member agrees, in writing, to a limitation upon their right to alienate any person of the Equity Interest owned by them for a fixed period of time shall not constitute Restriction.
5.10 Voting rights (in relation to a member) is the level of control exercised by that member over the affairs of the enterprise. The voting right of a member is expressed as a percentage of the votes of which that member is entitled, over the total number of votes to which all members of the enterprise are entitled at a meeting of the members. Analogous terms and concepts include, but are not limited to:
- the percentage of votes held by a shareholder of a company or a co-operative,
- society at a meeting of the shareholders
- the percentage of votes held by a member of a close corporation at a meeting of the members
- the percentage of votes held by a partner at a partnership meeting.
6.0 Flow Through Principle
Shall refer to the principle applied when determining the entitlement of black people, black women, and black designated groups to exercise voting rights in or to share in economic interest of the company, regard is solely to economic interest and voting rights to which black people, black women and black designated groups who are natural persons are entitled. If the rights of ownership of black people pass through a juristic person, then the rights of ownership of black people in that juristic person are measurable or determined. This principle applies across every tier of ownership in a multi-tiered chain of ownership until that chain ends with a black person holding rights of ownership.
7.0 Black SMME Supplier (To be referred as Qualifying Small Enterprises, QSE)
Black SMME shall be defined as a Black Supplier with an annual turnover not exceeding R35 million (thirty five million rands).
8.0 Large Black Supplier
Shall mean, in addition to 7.0 above, has an annual turnover in excess of R35 million (thirty five million rands).
9.0 Black Influenced
Shall be the company that is 15-25% (fifteen to twenty five percent) owned and managed by Black people.
10.0 Black Empowered Company
Shall be the company that is 25.1% to 50% (more than twenty five to fifty percent) owned and managed by Black People.
11.0 Engendered Supplier
Shall mean a legal entity with at least 30%(thirty percent) Black women representation within the Black equity ownership and management portion.
12.0 Disabled Supplier
Shall mean persons within a company with a permanent physical impairment, or sensory function which may result in restricted or inter alia, limits their ability to engage in an economic activity in the manner, or within the range, considered normal for a human being.
13.0 Traditional Supplier
Shall mean a Supplier that provides Cisco with Products that are core to Cisco business, but does not meet any of the criteria related to black suppliers, black empowered or black influenced companies including SMME’s that do not comply with clause 7.0.
14.0 Participation in Cisco tenders
In order for companies/bidders to participate in Cisco tenders a minimum of 25.1% (more than twenty five percent) black shareholding will be a standard requirement with preference given to black women ownership.
15.0 Joint Ventures and Consortia
Cisco shall apply the following strategic interventions to support the involvement of Black Suppliers whenever possible:
Encourage the establishment of value-adding joint ventures / subcontracting / partnerships both directly and indirectly and between Traditional Suppliers and Black Suppliers giving the latter access to the latest technologies and knowledge through matchmaking.
The following guidelines shall apply in establishing value adding Joint Ventures (“JV”) / Consortium between Traditional Suppliers and Black suppliers in order to assist with the transfer of skills and capacity building:
- the JV/Consortium shall be a legally registered entity, complying with all statutory requirements.
- the JV/Consortium shall be a bidding party in any contractual proposal with Cisco.
- the principal shareholder’s detail will be used in the evaluation of the JV/Consortium response.
- the JV/Consortium shall present a signed contractual agreement to prove the relationship between parties.
- each party to the JV/Consortium shall provide proof of how proceeds will be realised.
- the parties shall enjoy the customary incidents of ownership and shall share the risk and profits.
- the purpose and the objective of the JV/Consortium shall be clearly stated and the value (i.e. contribution), each party will be adding to the JV/Consortium.
16.0 Fronting and Misrepresentation
Fronting shall mean any practices and/or initiatives aimed at contravening or against the spirit of any law, provision, rule, procedure, process, system, practice, directive, order or any other condition that promote transformation as seen within the Cisco’s policies.
16.1 Fronting practices shall include, but not limited to the following:
1. Window-dressing: which includes cases in which black people are appointed or introduced to a company on the basis of tokenism and may be:- Discouraged or inhibited from substantially participating in the core activities of the company; and
- Discouraged or inhibited from substantially participating in the stated and/or levels of their participation;
2. The black people identified by an enterprise as its shareholders, executives or management are unaware or uncertain of their role within an enterprise;
3. The black people identified by an enterprise as its shareholders, executives or management have roles of responsibility that differ significantly from those of their non-black peers;
4. The black people who serve in executives or management positions in an enterprise are paid significantly lower than the market norm, unless all executives or management of an enterprise are paid at a similar level;
5. There is no significant indication of active participation by black people identified as top management at strategic decision making level;
6. An enterprise only conducts peripheral functions and does not perform the core functions reasonably expected of other, similar, enterprises;
7. An enterprise relies on a third-party to conduct most core functions normally conducted by enterprises similar to it;
- An enterprise cannot operate independently without a third-party, because of contractual obligations or the lack of technical or operational competence;
- The enterprise displays evidence of circumvention or attempted circumvention;
- An enterprise buys goods or services at a significantly different rate than the market from a related person or shareholder;
- An enterprise obtains loans, not linked to the good faith share purchases or enterprise development initiatives, from related person at an excessive rate; and
- An enterprise shares all premises and infrastructure with a related person, or a third party operating in the same industry where the cost of such premises and infrastructure is disproportionate to market related costs.