Charters vs Codes of Good Practice

The B-BBEE Act and the Codes of Good Practice made allowances for various industries to create their own charter – where the industry is different to other industries.

The financial services sector were one of the first industries to look at creating their own charter. Other industries such as tourism, construction and agriculture amongst others are also creating their own charters.

The mining and petroleum industries have a charter – but this has been made part of the mining act and the petroleum products acts, so it is not a true B-BBEE charter.

The codes of good practice are very clear as to what constitutes a charter including:

  • The minister of trade and industry must approve it.
  • Definitions in the charters must follow that of the codes.

The financial services and construction charters were gazetted on 9th February 2007, but still have to go through further legal processes before they can be regarded as a sector code and passed into law. They will also need to be aligned to the codes of good practice before this can happen.

The current situation is any company that wishes to implement B-BBEE should use the current gazetted generic codes of good practice. In practice many companies are using their own versions of transformation, or following an older version of the codes. In particular the mining industry must follow the mining act, but should also follow the codes of good practice.

While each company in an industry may eventually choose to follow a sector code, they do not have the right to force their supplier to follow the same code. The supplier should follow the codes of good practice, or alternatively the charter of their particular industry when finalised. It makes no sense for a mining company to insist that its supplier, who may be a construction house or stationery supplier, also follow the mining charter of the mining act.

Recourse:

There is no real recourse should a company choose to judge its supplier on a code different to one that they should use. The only alternative is to engage the customer and try to explain to the customer where he is going wrong!

Johannesburg
21st May 2007-05-21
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