status of agribee sector code and impact of the new b bbee ......status of agribee sector code and...

Status of AgriBEE Sector Code and impact of the new B‐BBEE

Amendment Bill on agribusiness

John Purchase

Agbiz Congress 2012

6 June 2012

Broad‐based Black Economic Empowerment Amendment Bill

Key Principles to the Act

Align the Act with other legislation and policy impacting on B-BBEE and with the Codes, viz. PPPF Act, NGP, IPAP, etc.

Elevate the General principles of the Codes, including the concept of the balanced scorecard and definitions

Establish the B-BBEE Commission to create an institutional environment for monitoring and evaluation B-BBEE

Provide for the regulation of the verification industry by IRBA

Deal with non-compliance and circumvention by introducing offences and penalties, especially in terms of fronting

Trumping provision : B-BBEE Act to be the overarching framework for B-BBEE (mitigate conflict in law);

3

ABC comments and proposals:

Currently enterprises have the option (as per Article 3.3 of Code Series 000: Framework for measuring Broad-based Black Economic Empowerment) of measuring compliance using either the generic Codes of Good Practice or the Sector Code. This option is effectively being closed down. The ABC’s call is that the current option be maintained as it creates a level of flexibility that is necessary, while still meeting all the minimum requirements. Also, if read with (3) below, sectors will simply opt out of following the Section 9 Sector Code route and follow the Section 12 Codes of Good Practice route. This will go against the original intention of the Sector Code route which was established for sectors with particular characteristics and peculiarities that the sector would wish to address in its transformation initiatives.

(2) Subject to section 12A, an enterprise in a sector in respect of which the Minister has issued a sector code in terms of section 9 may only be measured for compliance with the requirements of broad based-black economic empowerment in accordance with that code.

(3) Enterprises operating in a sector in respect of which the Minister has

issued a sector code in terms of section 9, must report annually on

their compliance with B-BBEE to the Sector Council.”

ABC comments and proposals:

•This proposed inclusion has significant implications and is not supported. It effectively changes the initial intention and spirit of the B-BBEE Act of one of voluntary participation (Good Practice-based) by the private sector (although basically enforced through preferential procurement, EE, etc.), to one of forced compliance (punitive-based). The principle should remain that a B-BBEE rating is compulsory for organs of state and the businesses directly and indirectly transacting, or licensed, with or by such institutions. The state procurement mechanism (~20% of economic activity) should be used to incentivise B-BBEE

• It raises many questions as to what happens then if an enterprise does not report

annually, what sanction will be instituted, how will this be enforced, to what level

of enterprise will it be compulsory, etc.

• The cost implications of such a determination, especially for micro, small and

medium sized businesses will be prohibitive and not be related to the potential

benefit for these enterprises, especially given the costs of such certification.

• It is not clear what the commission will do with such a number of

audits/certifications. he infrastructure to deal with this inflow of information needs

to be calculated.

• An additional aspect to the Section 9 Sector Codes is the issue of being ‘legally

binding’ on a sector. ‘Legally binding’ needs to be clearly and fully defined in

terms of what is legally binding and on who is it binding. Again, if something is

legally binding, what is the sanction and penalty if an enterprise is not

compliant with the ‘legally binding’ aspects thereof?

• Proposal: Participation and reporting should only be compulsory for

organisations transacting directly and indirectly with businesses wishing to

promote B-BBEE, as well as be compulsory for state institutions. The market

mechanism (preferential procurement) should be entrusted with isolating

businesses that do not participate in B-BBEE.

• Proposal: Clarity on the ‘legally binding’ definition is required.

The Draft AgriBEE Sector Codes

INTRODUCTION

Background

The Mandate of the AgriBEE Charter Council

The Major Stakeholders

The Major Milestones so far

The Scope of the AgriBEE Sector Code as gazetted

The Content of the AgriBEE Sector Code as gazetted• Differences Between the CoGP and the AgriBEE Sector Code• AgriBEE Elements • AgriBEE Beneficiary Base• AgriBEE Scorecard Weightings • AgriBEE Scorecard (for Large Enterprises)• AgriBEE Scorecard (for Qualifying Small Enterprises)

The process towards Section 9 (1).

Background

The Mandate of the AgriBEE Charter Council

The Major Stakeholders

The Major Milestones so far

The Scope of the AgriBEE Sector Code as gazetted

The Content of the AgriBEE Sector Code as gazetted• Differences Between the CoGP and the AgriBEE Sector Code• AgriBEE Elements • AgriBEE Beneficiary Base• AgriBEE Scorecard Weightings • AgriBEE Scorecard (for Large Enterprises)• AgriBEE Scorecard (for Qualifying Small Enterprises)

The process towards Section 9 (1).

1. The AgriBEE Transformation Charter in terms of Section 12 of the ActIn terms of Section 12 of the Act, “The Minister must publish in the Gazette for the general information and promote a Transformation Charter for a particular sector of the economy, if the Minister is satisfied that the Charter – has been developed by major stakeholders in that sector; and advances the objectives of this Act.”

It is a Statement of Intent.

2. The Draft AgriBEE Sector Code in terms of Section 9 (5) of the Act.

In terms of B-BBEE Act 53 of 2003, section 9 (5), “the Minister must, before issuing, replacing or amending a Code of Good Practice in terms of section 9 ( 1) - publish the Draft Code of Good Practice or amendment in the Gazette for public comments; and grant interested persons a period of at least 60 days to comment on the Draft Code of Good Practice or Amendment, as the case may be.

Thus the gazetting of the Draft AgriBEE Sector Code for 60 days public comment.

1. BACKGROUND INFORMATION

3. The AgriBEE Sector Code in terms of Section 9 (1) of the Act.

Section 9 (1) of the Act states that, “In order to promote the purposes of the Act, the Minister may by notice in the Gazette issue Codes of Good Practice on Black Economic Empowerment that may include:

a) The further interpretation and definition of Broad-Based Black Economic Empowerment and the interpretation and definition of the different categoriesof black empowerment entities;

b) Qualification criteria for preferential purposes for procurement and other economic activities.

c) Indicators to measure Broad-Based Black Economic Empowerment.

d) The Weighting to be attached to Broad-Based Black Economic Empowerment indicators referred to in paragraph (c);

e) Guidelines for stakeholders in the relevant sectors of the economy to draw up transformation charters for their sectors; and

f) Any other matter necessary to achieve the objectives of this Act.

1. BACKGROUND INFORMATION CONT…

2. THE MANDATE OF THE AgriBEE CHARTER COUNCIL

To align the AgriBEE Transformation Charter (Section 12) with the Codes of Good Practice in terms of a section 9 of the BBBEE Act no. 53 of 2003 – i.e. gazette of the AgriBEE Sector Code in terms of Section 9 (1).

To provide guidance with respect to the implementation of the AgriBEESector Code.

To monitor the implementation of the AgriBEE Sector Code in the Agricultural sector as well as to review it.

To compile reports on the status of B-BBEE in the agricultural sector.

2. MANDATE OF THE CHARTER COUNCIL CONT…

To share information with sector stakeholders and approved accredited verification agencies.

To facilitate communication and popularisation of the AgriBEE Sector Code.

To advise the Minister of DAFF with regard to the matters of transformation in the agricultural sector - AgriBEE.

To report to the Minister of Trade and Industry and the BEE Advisory Council on the status of Broad Based Black Economic Empowerment within the Agricultural sector.

1. Mr. (Rev) O. Mbangula – National African Famers Union SA2. Dr T. de Jager – Agri SA3. Professor J. de la Rey – Transvaal Agricultural Union SA4. Mr. E. Mohlahlo – Landless People Movement5. Dr J. Purchase – Agricultural Business Chamber6. Mr. Len Hansen – South African Agricultural Processors

Association7. Mr. K. Masemola – Food and Allied Workers Union (FAWU)

3. MAJOR STAKEHOLDERS

3. MAJOR STAKEHOLDERS CONT…

8. Mr. N. Phungo – Youth in Agriculture and Rural Development (YARD)

9. Ms N. Sambu – Women in Agriculture and Rural Development (WARD)

10. Mr. J. Maphutha – the DTI

11. Ms Q. Filani – DRDLR

12. Mr. S. Skosana – DWEA

13. Ms M. Mohapi – DAFF

14. Mr. Z. Bulbulia – The Presidency: Office on the Status of Disabled Persons

1. Launch of the AgriBEE Framework – July 2004 : From the reference document the AgriBEEFramework was launched on 26 July 2004 in East London as basis for transformation in the sector.

2. The AgriBEE Indaba: The AgriBEE Steering Committee submitted the Draft Transformation Charter to Minister, Thoko Didiza, on the 28 October 2005 being satisfied that they had consulted widely and that what is in the Charter are the views of the sector.

3. Provincial Road shows: Parallel to the work of the Steering Committee, there were provincial road shows which were facilitated through a service provider company as part of recommendations from the AgriBEE Indaba.

4. Presentation of the Charter to the Portfolio Committee in Parliament: On 28 November 2006 the Minister presented the Charter to the Portfolio Committee on Agriculture and Land Affairs. The Portfolio Committee also commended the work that was done for developing the Section 12 Transformation Charter and gave their support for the gazetting of the Charter in terms of Section 12 of the Act.

4. THE MAJOR MILESTONES SO FAR4. THE MAJOR MILESTONES SO FAR

5. Gazetting of the AgriBEE Transformation Charter- 20 March 2008.

6. Inauguration of the AgriBEE Charter Council - 05 December 2008.

7. Finalization of the Draft AgriBEE Sector Codes by the AgriBEE Charter Council – 11 October 2010.

8. Draft submission for the Minister of Agriculture, Forestry and Fisheries for signing of the application letter for the gazette of the Draft AgriBEE Sector Code 9 (5) – Signing By the DG, Zita Langa, 01 August 2011 and finally signed by the Minister Ms. T Joemat-Pettersson MP, on the 15th of August 2011.

9. 1st, 2nd, 3rd, and 4th Submissions of the Draft AgriBEE Sector Code on the 25th Aug 2011, 20 September 2011, 20 January 2012 and 14 February 2012 respectively.

10. Gazetting of the Draft AgriBEE Sector Code in terms of Section 9(5) of the Act for 60 days public comments .

4. MAJOR MILESTONES SO FAR CONT…4. MAJOR MILESTONES SO FAR CONT…

5. THE SCOPE OF THE AgriBEE Sector Code

• The primary production of agricultural products;

• 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 scope of the AgriBEE Sector Code shall include any enterprise which derives the majority of its turnover from:

5. THE SCOPE OF THE AgriBEE Sector Code Cont...

1. EXEMPTED MICRO ENTERPRISE (EME).

• Turnover: Less than R5m Turnover

• BEE Deemed recognition level: Level 4.

• EME Compliance: EME’s are encouraged to prioritize Skills Development and Socio‐economic Development in the agricultural sector.

• To Improve Status: Qualifies for promotion to a B‐BBEE Status of Level 3 Contributor if it is – more than 50% owned by black people or 50% by black women.

• In order to maximize EME points: EME’s can be measured in terms of the QSE Scorecard – it is allowed as per the Codes of Good Practice.

5. THE SCOPE OF THE AgriBEE Sector Code Cont...

2. QUALIFYING SMALL ENTERPRISE (QSE).

• Turnover: More than R5m but less than R35m.

• Elements: Must, at least, choose 5 elements out of 7 elements as opposed to the Codes

where QSE’s select ANY 4 elements out of 7. The Reason: The agricultural sector is dominated

by QSE’s and not large enterprises.

3.MEASURED ENTERPRISES: 100% compliance – All Seven

Elements

NO EMPOWERMENTINDICATOR

AGRIBEE INDICATIVE

SCORECARD

VARIANCE GENERIC SCORECARD

1 Ownership (Land and Equity) 20 points 0 20 points

2 Management Control 10 points 0 10 points

3 Employment Equity 10 points - 5 15 points

4 Skills Development 20 points + 5 15 points

5 Preferential Procurement 20 points 0 20 points

6 Enterprise Development 10 points - 5 15 points

7 Rural Development, Poverty Alleviation and SED

10 points + 5 05 points

6. The Content of the AgriBEE Sector Code

Differences between the Codes of Good Practice and the AgriBEE Sector Code

24

AgriBEE Elements

Transforming the

Commercial sub-sectors

Addressing challenges of the commercial & developing sectors

Addressing challenges of

developing sector

Ownership

Management

EmploymentEquity

SkillsDevelopment

PreferentialProcurement

EnterpriseDevelopment

Direct participation in

EconomicActivities

(Shareholders & Management

Team)

Development of Human

Capital(Current &

prospective employees)

Development & Investment in

Affirmable Enterprises

(Suppliers & communities)Socio-economic Development

Weighting

Ownership

Management Control

Employment Equity

Skills Development

Preferential Procurement

Enterprise Development

Socio‐Economic Development

20%

10%

10%

20%

10%

100%

20%

10% The environment

Your supply chain

Your company

AgriBEE Scorecard Weightings (Importance)

ELEMENT Weighting

Indicator Category

Indicator Indicator Weighting Points

TARGET

Exercisable Voting Rights in the Enterprise in the hands of black people

3 25% + 1vote

Voting rights

Exercisable Voting Rights in the enterprise in the hands of black women

2 10%

Economic Interest in the enterprise to which black people are entitled

4 25%

Economic Interest in the Enterprise to which black women are entitled

2 10%

Economic interest

Economic interest in the Enterprise to which black designated groups,deemed participants in distribution schemes or employee schemes; participants in co-operatives, are entitled

1 2.5%

Ownership fulfilment 1 No Restrictions

Realisation points

Net Equity Interest Achieved accordingly:(See CoGP)10% of the Target (Year 1)20% of the Target (Year 2)40% of the Target (Year 3-4) 60% of the Target (Year 5-6) 80% of the Target (Year 7-8) 100% of the Target (Year 9-10)

7 25%

Ownership 20%

Bonus points Involvement in the ownership of the Enterprise of black new entrants; black disabled people, black youth and black Deemed Participants of Broad-Based Ownership Schemes; or black Participants in Co-operatives

3 Bonus per each level

of 5%

AgriBEEAgriBEE Scorecard (Large Enterprises)Scorecard (Large Enterprises)

CoGP Ownership Element

AgriBEEAgriBEE Scorecard (Large Enterprises) Cont..Scorecard (Large Enterprises) Cont..20% Commercial agricultural land transferred or sold to black people (The full

detail of this matter can only be finalized once the legislative framework emanating from the current Land Reform Green Paper has been established. Until such time, the provisions of this Sector Code, read in conjunction with Statement 102, Recognition of Sale of Assets of the Codes of Good Practice, will be valid for measurement purposes.

20 30%Land Ownership

Bonus points

Contribution to achieving in excess of 30% land transfer.Note: Given the need to transfer land in support of national objectives, the nature of farming and the need to support Black People in establishing viable commercial farming Enterprises on the land that they receive, Measured Enterprises are encouraged to sell land in accordance with the principles and criteria attached to Qualifying Transactions as outlined below. However, these criteria and principles will only apply for a period of 5 years following the sale of land, where after the Measured Enterprise will enjoy continued recognition for ownership contributions. This refers exclusively to title deed land transfer. Further Black participation through ownership in the Agri-Industry by increasing the level of entitlement of Black People to participate in the Economic lnterest and Exercisable Voting Rights in existing and new Enterprises. This includes the sale of equity in a Measured Enterprise, sale of assets through Qualifying Transactions and/or through share equity schemes and other forms of joint ventures with farm labourers and other Black entrepreneurs(Commercial agricultural land transferred or sold to black people (The full detail of this matter can only be finalized once the legislative framework emanating from the current Land Reform Green Paper has been established. In the interim those paragraph 5.1.3 of this Code shall apply. The provisions of this Sector Code, read in conjunction with Statement 102, Recognition of Sale of Assets of the Codes of Good Practice, will be valid for measurement purposes.

5 30%(Bonus point per each percentage of land transferred above 30% of total land)

AgriBEEAgriBEE Scorecard (Large Enterprises) Cont...Scorecard (Large Enterprises) Cont...

Percentage of exercisable Voting Rights held by Members of the Board who are black people to the total of all Voting Rights exercised by all members of the Board

3 50%

Executive Members of the board who are black people

1 50%

Board Participation

Executive Members of the board who are black women

1 25%

Percentage that Senior Top Management who are black people constitute of the total number of Senior Top Management

2 40%

Percentage that Senior Top Management who are black women constitute of the total number of Senior Top Management

1 20%

Percentage that Other Top Management who are black people constitute of the total number of Other Top Management

1 40%

Top ManagementParticipation

Percentage that Other Top Management who are black women constitute of the total number of Other Top Management

1 20%

Management Control 10%

Bonus Points Percentage that black people who are Independent Non-executive Board Members constitute of the total number of Independent Non-executive Board Members

1 40%

CoGP Management Control Element

AgriBEEAgriBEE Scorecard (Large Enterprises) Cont..Scorecard (Large Enterprises) Cont..Black people with disabilities employed in by the Measured Enterprise as a percentage of all full-time employees

2 3%

Black people employed by the Measured Enterprise at Senior Management level as a percentage of employees at Senior Management level

2 60%

Black women employed by the Measured Enterprise at Senior Management level as a percentage of employees at Senior Management level

2 30%

Black people employed by the Measured Enterprise at Professionally Qualified, Experienced Specialist and Mid-management level as a percentage of employees at Professionally Qualified, ExperiencedSpecialist and Mid-management level

2 75%

Black women employed by the Measured Enterprise at Professionally Qualified, Experienced Specialist and Mid-management level as a percentage of employees at Professionally Qualified, ExperiencedSpecialist and Mid-management level

1 40%

Black people employed by the Meausured Enterprise at Skilled Technical and Academically Qualified Workers, Junior Management,Supervisors, Foremen and Superintendents as a percentage of employees at Skilled Technical and Academically Qualified Workers, Junior Management, Supervisors, Foremen and Superintendents level

1 80%

Employment Equity

10%

Bonus point for meeting or exceeding the EAP target in each category above

3

CoGP Employment Equity Element

AgriBEEAgriBEE Scorecard (Large Enterprises) Cont..Scorecard (Large Enterprises) Cont..

Skills development spend on black employees as a percentage of Leviable Amount. (85% of spend focused on core skills as identified by the enterprise and critical skills as identified by the relevant SETA).

7 2%

Skills development spend on black women as a percentage of Leviable Amount (85% of spend focused on core skills as identified by the enterprise and critical skills as identified by the relevant SETA).

2 0.93%

Skills Development Spend

Spend on black employees with disabilities as a percentage of Leviable Amount

1 0.2%

Number of black employees participating in training programmes that lead to recognised qualifications as percentage of total employees.

3 5%

Number of black women participating in training programmes that lead to recognised qualifications as percentage of total employees

2 2.5%

Number of people who are members of Black Designated Groups participating in training programmes that lead to recognised qualifications as percentage of total employees .

3 1%

Recognised Training

Programmes

Number of Black employees participating in ABET Training. 2 1%

Skills Development

20%

Bonus pointsPercentage of employees at ABET level 3 2 70%

CoGP Skills Development Element


BEE procurement spend from Suppliers based on the BEE procurement recognition system contained in section 5.5 of the Sector Code

12 70%

BEE procurement spend from Qualifying Small Enterprises in accordance with the BEE procurement recognition system contained in section 5.5 of the Code

2 15%

BEE procurement spend from Exempted Micro Enterprises in accordance with the BEE procurement recognition system contained in section 5.5 of the Code

1 5%

BEE procurement spent from suppliers that are 50% black owned as a percentage of Total Measured Procurement Spend.

3 12%

Preferential Procurement

20% Preferential Procurement

Spend

BEE procurement spent from suppliers that are 30% black women owned as a percentage of Total Measured Procurement Spend.

2 8%

CoGP Preferential Procurement Element



Spend

Cumulative contributions made by the Measured Entity to enterprise Development as a percentage of cumulative net profit after tax measured from the commencement / Inception Date to the date of measurement

10 3% of NPAT

Enterprise development contributions that directly increase employment levels in preceding year

2 One point for every 5%

proven increase in permanent

employment on previous

year’s permanent

employment


10%

Bonus Points

Lease of 20% of land or capital assets on a long term basis to black persons which meets the criteria of a qualifying transaction as outlined in paragraph 5.1.1.2

2 Lease longer than 10 years

CoGP Enterprise Development Element

AgriBEEAgriBEE Scorecard (Large Enterprises) Cont...Scorecard (Large Enterprises) Cont...

1,0% of NPAT

SED Spend and/or Land

available to farm

workers1

Cumulative Rand value of SED contributions as a percentage of net profit after tax over five years measured from the commencement date of this Code or the Inception Date over 10 years of the Code period and/or Land made available to farm workers measured from the commencement date of this Code or the Inception Date over 10 years of the Code period

10Socio-economic

Development

10%

10% Land

Bonus Point

SED contributions benefiting black people in rural communities or geographic areas identified in government’s integrated sustainable development programme and urban renewal programme

1

CoGP Socio‐Economic Development Element

AgriBEEAgriBEE Scorecard For Scorecard For The Qualifying Small EnterprisesThe Qualifying Small Enterprises (QSE).(QSE).

AgriBEEAgriBEE Scorecard For QSEScorecard For QSE

Element AgriBEE QSE ScorecardWeighting

Generic QSE ScorecardWeighting

Ownership 20 points 25 points

Management control 20 points 25 points

Employment equity 20 points 25 points

Skills Development 20 points 25 points

Preferential procurement 20 points 25 points

Enterprise development 20 points 25 points

Socio-Economic Development

20 points 25 points

ELEMENT WEIGHTING CATEGORY INDICATOR INDICATOR WEIGHTING

POINTS

TARGET

Voting rights Exercisable Voting Rights in the Enterprise in the hands of black people

5 25%+ 1 vote

Economic interest

Economic interest in the Enterprise to which black people are entitled

7 25%

Ownership fulfillment 1 YesRealisation points

Net equity interest10% of the Target (Year 1)20% of the Target (Year 2)40% of the Target (Year 3,4)60% of the Target (Year 5,6)80% of the Target (Year 7,8)100% of the Target (Year 9,10)

7 25%

OWNERSHIP 20%

Bonus points Involvement in the ownership of the Enterprise of:- Black Disabled People- Black Youth- Black Women and/or- Broad-based Ownership Schemes

3 10%

20% Commercial agricultural land transferred or sold to black people(The full detail of this matter can only be finalized once the legislative framework emanating from rthe current Land Refgorm Green Paper has been established. In the interim paragraph 5.1.3 of this Code shall apply. The provisions of thisSector Code, read in conjunction with Statement 102, Recognition of Sale of Assets of the Codes of Good Practice, will be valid for measurement purposes.

20 30%LAND OWNERSHIP

Bonus points Contibution to achieving in excess of 30% land transfer. Bonus point per each percentage of land transferred above 30% of totalland

5 30%

AgriBEEAgriBEE Scorecard For QSE ContScorecard For QSE Cont……

CoGP QSE Ownership Element


Owner-Manager Participati

on

Black representation at Owner-manager level 20 50.1%MANAGEMENT CONTROL

20%

Bonus Points

Black women representation at Owner-manager level 2 10%

Black representation at Manager-Controller level 6 60%

Black women representation at Manager-Controller level 6 30%

Black employees as percentage of total employees 4 70%

Black women as percentage of total employees 4 35%

EMPLOYMENT EQUITY

20%

Bonus point for meeting or exceeding the EAP targets in each category above

2

Employee enrolment / involvement in Recognised Training Programmes

5 30%

Skills development spend on black employees in addition to Skills Development Levy (except where the enterprise is exempted from payment of the skills development levy) as a percentage of the leviable amount (or as a percentage of total annual payroll, for entities exempted from the skills development levy).(85% of spend focused on core skills as identified by the enterprise and critical skills as identified by the relevant SETA).

15 2%

SKILLS DEVELOPMENT

20%

Bonus points

Percentage of employees at ABET level 3 2 70%

CoGP Management Control, Employment Equity & Skills Development Elements

PREFERENTIAL PROCUREMENT

20% BEE procurement spend from suppliers in accordance with the BEE procurement recognition system contained in section 5.5 of the Sector Code.

20 50%

Cumulative contribution to enterprise development as a percentage of cumulative net profit after tax measured from the Commencement / Inception Date to the date of measurement

20 3% of NPAT

ENTERPRISE DEVELOPMENT

20%

Bonus points

Lease of 20% land or capital assets on a long term basis to black persons which meets the criteria of a qualifying transaction as outlined in paragraph 5.1.1.2.

3 Lease longer

than 10 years

SOCIO-ECONOMIC

DEVELOPMENT (SED)

20% SED Spend and/or Land available to farm workers1

Cumulative Rand value of socio economic development contributions as a percentage of net profit after tax over five years and/or Land made available to farm workers measured from the commencement date of this Code or the Inception Date over 10 years of the Code period

20 1% of NPAT


CoGP QSE Preferential Procurement, Enterprise Development & Socio‐Economic Development

7. THE PROCESS TOWARDS SECTION 9(1) – Enforceable.

1. Current: Gazetting of the Draft AgriBEE Sector Code – Section 9 (5) of the BBBEE Act 53 of 2003 – It’s a DRAFT not LAW.

2. National Roll-out for the popularization of the Draft AgriBEE Sector Code – All Provinces.

3. Consideration and Incorporation of public comments and inputs –The Dti and the AgriBEE Charter Council.

4. Gazetting in terms of Section 9(1) of the BBBEE Act 53 of 2003 – i.e. The AgriBEE Sector Code.

5. Implementation of the AgriBEE Sector Code by ALL 3 Spheres of Government (Agricultural Sector), all Large Enterprises, Qualifying Small Enterprises, and Exempted Micro Enterprises.

6. Monitoring compliance through the AgriBEE IT Portal.7. Reporting to the Minister of DAFF and the Dti / Advisory Council.

Conclusion• AgriBEE moves from ‘Intent to Transform’ to ‘Regulated

Transformation’.

• Sector Code as close as possible to generic CoGP.

• Reasons: (i) Level playing field (ii) Predictability (iii) Smooth transition.

• Agribusinesses, including banks, will in effect now have to ‘force’clients (farmers) to provide scorecards.

• All business with government (procurement, licenses, permits, etc.) will require a scorecard.

• Uncertainty about forced reporting in B‐BBEE Amendment Bill and sanction on non‐compliance.

status of agribee sector code and impact of the new b bbee ......status of agribee sector code and...

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