South Africa has approved codes to monitor whether companies vying for state contracts are complying with guidelines to redress apartheid imbalances by empowering blacks, an official said on Thursday.

The codes set out scorecards against which companies will be measured in areas such as black ownership and skills development if they wanted to qualify for government contracts, government spokesperson Themba Maseko said.

The codes were approved at the cabinet's fortnightly meeting on Wednesday and will come into effect early next year, he said.

Procurement to further BEE

Department of Trade and Industry deputy director-general Lionel October said: "We need to make more effective use of government tools such as procurement and licensing to further black economic empowerment."   "We will be looking at aligning and strengthening legislation in future," to this end, he added.  To avoid stifling small businesses, enterprises with an annual turnover of less than R5-million will be exempted from the codes.

Slightly bigger businesses with a turnover of up to R35-million will however be required to adhere to four out of the seven elements on the scorecard. Multi-national companies doing business in South Africa will be exempted from black ownership criteria if they offered alternative empowerment opportunities such as training.

Full details of the codes are to be unveiled next week.

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