agribee tr transformation charter · 2010-12-17 · impossible”: nelson mandela 2299 given these...

AgriBEE TrAgriBEE TrAgriBEE TrAgriBEE Tr

Presentation to the

DATE: 17 September 2010DATE: 17 September 2010

VENUE: Parliament

Transformation Charter Transformation Charter Transformation Charter Transformation Charter

the Public Hearings on AgriBEE

DATE: 17 September 2010DATE: 17 September 2010

VENUE: Parliament – Cape Town

� Introduction

� Scope of Application for the

� AgriBEE Elements

� AgriBEE Beneficiary Base

Presentation OutlinePresentation OutlinePresentation OutlinePresentation Outline

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� Scorecards Variations: AgriBEE

� AgriBEE Scorecard: All Elements

� Enterprises Classification

� Enterprises’ Indicate AgriBEE

Levels

� SANAS Accredited Rating

Calculation

the AgriBEE Charter

Base

Presentation OutlinePresentation OutlinePresentation OutlinePresentation Outline

AgriBEE versus BBBEE

Elements - Weights, Indicators &Targets

Classification versus Compliance to the Scorecard

AgriBEE Status and Procurement Recognition

Rating and Verification Agencies for Scorecard

� Composition of the AgriBEE

� Progress made by the AgriBEE

� Progress report on the Study

� Challenges experienced by

Presentation Outline (cont…)Presentation Outline (cont…)Presentation Outline (cont…)Presentation Outline (cont…)

33

� Challenges experienced by

� Implementation of the AgriBEE

� BBBEE compliance in the

� Concluding Remarks

� Way Forward

AgriBEE Charter Council

AgriBEE Charter Council

Study for EMEs and QSEs Thresholds

by the AgriBEE Charter Council

Presentation Outline (cont…)Presentation Outline (cont…)Presentation Outline (cont…)Presentation Outline (cont…)

by the AgriBEE Charter Council

AgriBEE Equity Fund

the Agricultural Sector

IntroductionIntroductionIntroductionIntroduction

• The AgriBEE Sector Charterstakeholders expressedbroad-based transformation

• It is the product of extendedamongst sector and relatedinitiated by the launch of the

44

initiated by the launch of the

• AgriBEE Charter was developedBBBEE Codes of Good Practice,

- BBBEE Act No. 53 of 2003

- South African Strategic Plan for Agriculture of 2001

- Unique aspects specific to sector i.e. Land

• AgriBEE Charter was gazetted

• AgriBEE Charter was then

• AgriBEE Charter Council was

IntroductionIntroductionIntroductionIntroduction

Charter is a statement of intent whereintheir commitment towards the goals fo

transformation of the agricultural sector.

extended consultations and deliberationsrelated stakeholders over a number of years

the AgriBEE Framework in July 2004.the AgriBEE Framework in July 2004.

developed as guided by the Phase 1 &Practice, taking into effect:

BBBEE Act No. 53 of 2003

South African Strategic Plan for Agriculture of 2001

Unique aspects specific to sector i.e. Land

gazetted on 20 March 2008.

then launched on 4 April 2008.

was inaugurated on 5 Dec 2008.

Scope of Application for the Scope of Application for the AgriBEE Charter AgriBEE Charter


� The primary production of agricultural products;

� The provision of inputs and services to enterprises engaged in

The scope of the AgriBEE Transformation Charter shall include any Enterprises which derives the majority of its turnover from:

55

� The provision of inputs and services to enterprises engaged in the production of agricultural products;

� The beneficiation of agricultural products whether of a primary or semi-beneficiated form; and

� The storage, distribution, and/or trading and allied activities related to non-beneficiated agricultural products.



The primary production of agricultural products;

The provision of inputs and services to enterprises engaged in

The scope of the AgriBEE Transformation Charter shall include any Enterprises which derives the majority of its turnover from:

The provision of inputs and services to enterprises engaged in the production of agricultural products;

The beneficiation of agricultural products whether of a primary beneficiated form; and

The storage, distribution, and/or trading and allied activities beneficiated agricultural products.

AgriBEE ElementsAgriBEE ElementsAgriBEE ElementsAgriBEE Elements

Transforming the

Commercial sub-sectors

Ownership

Management

EmploymentEquity

66

Addressing challenges of the commercial & developing sectors

Addressing challenges of

developing sector

Equity

Development

PreferentialProcurement

EnterpriseDevelopment

Poverty alleviation

AgriBEE ElementsAgriBEE ElementsAgriBEE ElementsAgriBEE Elements

Ownership

Management

EmploymentEquity

Direct participation in

EconomicActivities

(Shareholders &

Management

Team)

Development

6

Equity

Skills

Development

PreferentialProcurement

EnterpriseDevelopment

Development of Human

Capital(Current &

prospective

employees)

Development &

Investment in

Affirmable

Enterprises

(Suppliers & communities)Poverty alleviation

The Business Barrier

The Opportunity Barrier

Preferential

Procurement

Ownership

& Management

Equitable Economic Opportunities

Enterprise

Development

AgriBEE Beneficiary BaseAgriBEE Beneficiary BaseAgriBEE Beneficiary BaseAgriBEE Beneficiary Base

77

The Poverty Barrier

The Skills Barrier

Employment

EquityRD, PA & CSI

Skills Development

Emerging black middle class & investors

Black entrepreneurs

AgriBEE Beneficiary BaseAgriBEE Beneficiary BaseAgriBEE Beneficiary BaseAgriBEE Beneficiary Base

Black workers, professionals, graduates,

school-leavers

Black unemployed & rural poor

No Empowerment

Indicator

1 Ownership (Land and Equity)

2 Management Control

Scorecards Variations:Scorecards Variations:AgriBEE versus BBBEEAgriBEE versus BBBEEScorecards Variations:Scorecards Variations:AgriBEE versus BBBEEAgriBEE versus BBBEE

88

3 Employment Equity

4 Skills Development

5 Preferential Procurement

6 Enterprise Development

7 Rural Development, Poverty

Alleviation and CSI

AgriBEEIndicative

Scorecard

Variance BBBEE

Generic

Scorecard

Ownership (Land and Equity) 20 points 0 20 points

10 points 0 10 points

Scorecards Variations:Scorecards Variations:AgriBEE versus BBBEEAgriBEE versus BBBEEScorecards Variations:Scorecards Variations:AgriBEE versus BBBEEAgriBEE versus BBBEE

10 points - 5 15 points

20 points + 5 15 points

Preferential Procurement 20 points 0 20 points

10 points - 5 15 points

Rural Development, Poverty 10 points + 5 05 points

Ownership

Management Control

Employment Equity

AgriBEE ScorecardAgriBEE ScorecardAgriBEE ScorecardAgriBEE Scorecard

99

Employment Equity

Skills Development

Preferential Procurement

Enterprise Development

Socio-Economic Development

Weight

Ownership

Management Control

Employment Equity

20%

10%

10% Your company

AgriBEE ScorecardAgriBEE ScorecardAgriBEE ScorecardAgriBEE Scorecard

Employment Equity

Skills Development

Preferential Procurement

Enterprise Development

Economic Development

10%

20%

10%

100%

20%

10% The environment

Your supply chain

Ownership (20 points)Ownership (20 points)Ownership (20 points)Ownership (20 points)

1010

Ownership (20 points)Ownership (20 points)Ownership (20 points)Ownership (20 points)

Management Control (10 points)Management Control (10 points)Management Control (10 points)Management Control (10 points)

1111

Management Control (10 points)Management Control (10 points)Management Control (10 points)Management Control (10 points)

Employment Equity (10 points)Employment Equity (10 points)Employment Equity (10 points)Employment Equity (10 points)

1212

Employment Equity (10 points)Employment Equity (10 points)Employment Equity (10 points)Employment Equity (10 points)

Skills Development (20 points)Skills Development (20 points)Skills Development (20 points)Skills Development (20 points)

1313

Skills Development (20 points)Skills Development (20 points)Skills Development (20 points)Skills Development (20 points)

Preferential Procurement (20 points)Preferential Procurement (20 points)Preferential Procurement (20 points)Preferential Procurement (20 points)

1414

Preferential Procurement (20 points)Preferential Procurement (20 points)Preferential Procurement (20 points)Preferential Procurement (20 points)

Enterprise Development (10 points)Enterprise Development (10 points)Enterprise Development (10 points)Enterprise Development (10 points)

1515

Enterprise Development (10 points)Enterprise Development (10 points)Enterprise Development (10 points)Enterprise Development (10 points)

Rural DevelopmenRural DevelopmenCorporate Social Investment (10 points)Corporate Social Investment (10 points)

Rural DevelopmenRural DevelopmenCorporate Social Investment (10 points)Corporate Social Investment (10 points)

1616

ent, Poverty Alleviation and ent, Poverty Alleviation and Corporate Social Investment (10 points)Corporate Social Investment (10 points)

ent, Poverty Alleviation and ent, Poverty Alleviation and Corporate Social Investment (10 points)Corporate Social Investment (10 points)

� Exempted Micro Enterprisesof less than R5 millioncomplying with theempowered. They automaticallyLevel or status, and areblack-owned.

Enterprises Enterprises Compliance to the AgriBEE ScorecardCompliance to the AgriBEE Scorecard

Enterprises Enterprises Compliance to the AgriBEE ScorecardCompliance to the AgriBEE Scorecard

1717

� Qualifying Small Enterprisesof more than R 5 million,CHOOSE any four out ofand each element is weighted

� Large enterprises have anmillion, and they have toof the Scorecard.

Enterprises (EMEs) have an annual turnovermillion. They are FULLY EXEMPTED from

Codes, and are considered fullyautomatically have a Level 4 Contribution

considered at Level 3 if they are also

Enterprises Enterprises Classification vs. Classification vs. Compliance to the AgriBEE ScorecardCompliance to the AgriBEE Scorecard

Enterprises Enterprises Classification vs. Classification vs. Compliance to the AgriBEE ScorecardCompliance to the AgriBEE Scorecard

Enterprises (QSEs) have an annual turnovermillion, but less than R 35 million. They can

of the seven elements of the scorecard,weighted equally at 25%.

an annual turnover of more than R 35to comply with ALL seven components

Enterprises’ Indicate AgriBEE Status Enterprises’ Indicate AgriBEE Status and Procurement Recognition Levelsand Procurement Recognition LevelsEnterprises’ Indicate AgriBEE Status Enterprises’ Indicate AgriBEE Status and Procurement Recognition Levelsand Procurement Recognition Levels

1818

Enterprises’ Indicate AgriBEE Status Enterprises’ Indicate AgriBEE Status and Procurement Recognition Levelsand Procurement Recognition LevelsEnterprises’ Indicate AgriBEE Status Enterprises’ Indicate AgriBEE Status and Procurement Recognition Levelsand Procurement Recognition Levels

AgriBEE Contribution LevelsAgriBEE Contribution LevelsAgriBEE Contribution LevelsAgriBEE Contribution Levels

Contribution Levels % Points on Scorecard

Level 1 greater than 100 points

Level 2 from 85 to 99 points


1919






Non Compliant from 0 to 39 points

AgriBEE Contribution LevelsAgriBEE Contribution LevelsAgriBEE Contribution LevelsAgriBEE Contribution Levels

% Points on Scorecard Procurement Recognition (R1.00 spent =)

greater than 100 points R1.35

from 85 to 99 points R1.25



from 55 to 64 points 80 c





SANAS accredited Rating/Verification SANAS accredited Rating/Verification Agencies for Scorecard calculationAgencies for Scorecard calculation


2020



Composition of the AgriBEE Charter CouncilComposition of the AgriBEE Charter CouncilComposition of the AgriBEE Charter CouncilComposition of the AgriBEE Charter Council

� Government,

� Agribusinesses,

� Agricultural Processors,

� Farmers Organisations,

2121

� Labour Unions

� Civil Society Organisations,

� Farmers Unions.

Composition of the AgriBEE Charter CouncilComposition of the AgriBEE Charter CouncilComposition of the AgriBEE Charter CouncilComposition of the AgriBEE Charter Council

Organisations, and

Progress made by the Progress made by the AgriBEE Charter CouncilAgriBEE Charter Council


� Council drafted a detaileddiscuss and agree on the

� Council agreed to migrateAgricultural Sector

2222

� Council established 3 Working

�Working Group 1: responsible

Charter with the final DTI

Scorecard and their points’

Scorecards.


Activities of the Council


of a cost-effective monitoring

implementation.



detailed workplan and already met 6 times tothe workplan activities.

migrate the section 12 into 9 Sector Codes for

Working Groups as follows:

responsible for the alignment of the Sect.12

DTI Codes, check the 7 elements of the Generic

points’ allocation with the indicative AgriBEE

responsible for drawing up a Budget for the

Council.

responsible for the investigation and development

monitoring & reporting system on AgriBEE

Progress (cont…)Progress (cont…)Progress (cont…)Progress (cont…)

� Council agreed to commissionExempted Micro EnterprisesEnterprises (QSEs).

� Council made a commitmentCouncil Meeting and agreed

2323

� Council completed the alignmentDevelopment of AgriBEE IT

� Council investigated optionsfollows:

- STRUCTURE: Council Executing

Government (currently

Established Office with appointed

- FUNDING: 50-50 or 60-40

- Not yet finalized the decision

Progress (cont…)Progress (cont…)Progress (cont…)Progress (cont…)

commission a study to review thresholds foEnterprises (EMEs) and Qualifying Smal

commitment to complete a Draft Sector Code by nexagreed to gazette it parallel to the study.

alignment of AgriBEE Scorecard and theIT Portal is in progress.

options for structure and funding after Section

Executing Authority remaining under wing o

Secretariat to Council) or Independently

appointed CEO and staff.

(Government-Private Sector).

decision on the structure and funding.

Progress report on the Study for Progress report on the Study for EME and QSE ThresholdsEME and QSE Thresholds


� Following the Departmentalwas advertised two timeshowever all Bidders did not

� BID Evaluation Committeeundertake the study given

2424

undertake the study givenrecommended a proposalstudy for Council’s consideration

� Council supported the proposalstudy and tasked the Secretariatmodalities.

� NAMC appointment is still



Departmental Supply Chain processes, a tendertimes to appoint a suitable service provider,

not meet the requirements.

Committee evaluated various options togiven unsuccessful tender option andgiven unsuccessful tender option and

proposal to engage the NAMC to undertake theconsideration.

proposal to appoint NAMC to do suchSecretariat to facilitate the appointment

still in progress.

Challenges experienced by Challenges experienced by AgriBEE Charter Council AgriBEE Charter Council


� Reporting on sector’s transformation is a difficult task under current Section 12 Charter status

� Unable to give statistics on Scorecard Targets & Indicators other than the basis information in the DTI’s BEE Portal

2525

� Statistics/ information on AgriBEE not available and not coordinated



Reporting on sector’s transformation is a difficult task under current Section 12 Charter status

Unable to give statistics on Scorecard Targets & Indicators other than the basis information in the DTI’s BEE Portal

Statistics/ information on AgriBEE not available and not

Implementation ofImplementation ofImplementation ofImplementation of

• Fund Objective: To providethe entry and participationvalue chain.

• DAFF entered into an MOA

• About R195 million was transferred

• About R85 million was spendfinance 13 equity projects

2626

finance 13 equity projectsdatabase .

• About R110 million hasmismanagement of the fund

• In order to unfreeze the fund,a new MOA on the AgriBEEAgriBEE Fund Operationalby both parties.

• Once the MoA is signed, thethe applications will be consideredrevised operational manual

of the AgriBEE Equity Fund of the AgriBEE Equity Fund of the AgriBEE Equity Fund of the AgriBEE Equity Fund

provide funding for equity deals that promoteparticipation of black people in the entire agricultural

MOA with Land Bank, as the Fund Manager.

transferred to the Bank: 2006/07 – 2009/10.

spend between 2006/07 and 2007/08 toprojects and 6 AgriBEE opportunity studies &projects and 6 AgriBEE opportunity studies &

been frozen due to the allegations offund by the Land Bank.

fund, DAFF and Land Bank have developedAgriBEE Equity Fund and also revised the

Operational Manual, which are on route for signature

the AgriBEE Fund will be operational andconsidered by the Land Bank in line with the

manual

Agricultural SecAgricultural SecRegistered EntitiRegistered EntitiAgricultural SecAgricultural Sec

Registered EntitiRegistered Entiti

• According to the DTI IT Portal as at 30 June 2010, there are 612 entities registered in the Agricultural Sector as follows:

�299 are Exempted Micro Enterprises (EME’s)

�231 are Qualifying Small Enterprises (QSE’s)

�82 are Large Enterprises (Generics)

2727

�82 are Large Enterprises (Generics)

�278 were not yet rated.

• Ownership status of the Registered Agricultural Entities:

�Average black ownership is 23%

�Average black women ownership is 10%

ector BBBEE Compliance: ector BBBEE Compliance: tities and Ownership Statustities and Ownership Statusector BBBEE Compliance: ector BBBEE Compliance: tities and Ownership Statustities and Ownership Status

According to the DTI IT Portal as at 30 June 2010, there are 612 entities registered in the Agricultural Sector as follows:

299 are Exempted Micro Enterprises (EME’s)

231 are Qualifying Small Enterprises (QSE’s)

82 are Large Enterprises (Generics)82 are Large Enterprises (Generics)

Ownership status of the Registered Agricultural Entities:

Average black ownership is 23%

Average black women ownership is 10%

Agricultural SecAgricultural SecStatus of the RegisStatus of the Regis

Agricultural SecAgricultural SecStatus of the RegisStatus of the Regis

Contribution Levels Number of Agricultural

Level 1

Level 2

Level 3

2828

Level 4

Level 5

Level 6

Level 7

Level 8

Non Compliant

ector BBBEE Compliance: ector BBBEE Compliance: gistered Agricultural Entitiesgistered Agricultural Entitiesector BBBEE Compliance: ector BBBEE Compliance: gistered Agricultural Entitiesgistered Agricultural Entities

Number of Agricultural Entities

% Points on Scorecard

31 greater than 100 points

20 from 85 to 99 points








Concluding RemarksConcluding RemarksConcluding RemarksConcluding Remarks

� “We must be the changeborn in India, but made

� “Socio-economic transformationimpossible”: Nelson Mandela

2929

� Given these remarks,currently on the transformationCodes (Section 9)

� This transformation roadmaptherefore require morestakeholders in the Agriculturalcan do more.

Concluding RemarksConcluding RemarksConcluding RemarksConcluding Remarks

change we wish to see in the world. I wasin South Africa”: Mahatma Gandhi

transformation is difficult but notMandela

remarks, AgriBEE Charter (Section 12) istransformation roadmap to AgriBEE Sector

roadmap has lot of turbulences andmore than 100% commitment from all the

Agricultural Sector: Working together we

Way ForwardWay ForwardWay ForwardWay Forward

� Council will facilitate thefrom December 2010.

� Council will facilitate thethe key agricultural stakeholders

3030

� Council will facilitate reportingwho falls under scope of

Way ForwardWay ForwardWay ForwardWay Forward

the gazette of AGRIBEE Sector Codes

the signing off of the Section 9 Code bystakeholders before the end of March 2010.

reporting by all agricultural stakeholdersthe AgriBEE Charter.

History confirms that people don’t believe the MESSAGE

3131

believe the MESSAGE

believe the MESSENGER.

I THANK YOU

History confirms that people don’t believe the MESSAGE until they believe the MESSAGE until they

believe the MESSENGER.

I THANK YOU

agribee tr transformation charter · 2010-12-17 · impossible”: nelson mandela 2299 given these...

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