B-BBEE Sector Codes are now legally binding

Published: 14 May 2009

Three Sector Charters have been gazetted as Sector Codes, in terms of Section 9(1) of the Broad-Based Black Empowerment (B-BBEE) Act.

The gazetting of the Tourism, Construction, and Forestry Sector Charters into Sector Codes follows months of consultation and alignment of the Charters with the objectives of the B-BBEE Act and Codes of Good Practice. These Sector Codes are amended versions of the Draft Sector Charters, gazetted in terms of Section 9(5) of the B-BBEE Act.

The legal implications of the gazetting of these Charters are that they are binding on all business interactions and all enterprises operating within the Sectors, meaning that businesses operating in these industries will now have to comply with the Sector Codes and not the Generic Codes of Good Practice.

Departmental Spokesperson, Lillian Mofokeng, says that compliance with the Sector Codes is obligatory for all stakeholders operating within the Tourism, Construction, and Forestry industries. “The Codes provide guidance for the development and gazetting of sector-specific charters, provided that these Sector Charters not only advance the objectives of the B-BBEE Act, but also address sector-specific peculiarities or exemptions that would otherwise not have been adequately dealt with by the Codes,” said Mofokeng.

She added that where deviations and exemptions are sought, such matters would need to be supported by justifications and empirical evidence about the industry.

The highlight of the Tourism Sector Code is that it has a reduced threshold of R2.5 million, as compared to a threshold of R 5 million set out in the Generic Codes. This decrease seeks to ensure that a significant number of enterprises doing business in the tourism industry are not excluded from compliance with the Sector Code.

More importantly, the Tourism Sector Code has set a target of 30% ownership to be achieved by tourism-related enterprises over the next 10 years.

The Construction Sector Code presents the industry with the ideal opportunity for the advancement of transformation and Black Economic Empowerment in the procurement of construction programmes and services. The Code also seeks to regulate a target of 30% black ownership in the industry over the next 10 years.

Similarly, the Forest industry has set itself a target of 30% for the transfer of ownership into the hands of black people. This is over and above the target for broad empowerment initiatives that will be initiated in terms of the Forest Sector Code.

With effect from Monday, 18 May 2009, copies of the Sector Codes will be made available via the dti website, as well as from the offices of the Government Printers.

For more information, contact Sidwell Medupe on telephone: (012) 394 1650 / 073 522 6801 or via e-mail: MSMedupe@thedti.gov.za

Issued by:Communication and Marketing Unit, the dti
Chief Director: Lillian Mofokeng
Mobile: + 27 (0)82 888 8362
E-mail: lmofokeng@thedti.gov.za

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