road freight charter b-bbee scorecard presenter: sibongile zikalala
TRANSCRIPT
AMENDED B-BBEE CODES
PRESENTATION OUTLINE
1. OBJECTIVES OF THE SECTOR CODES
2. PRINCIPLE CHANGES ON AMENDED B-BBEE CODES
3. PROPOSED ROAD FREIGHT GENERIC CHARTER SCORECARD
4. PROPOSED QUALIFYING SMALL ENTERPRISE SCORECARD
5. IMPLEMENTATION AND MONITORING
6. CONCLUSION – THE IMPACT ON BUSINESS
OBJECTIVES OF THE ROAD FREIGHT TRANSPORT SECTOR CODES
• To advance the objectives of the B-BBEE Amendment Act No. 56 of
2013;
• To constitute a Framework and Establish the Principles upon which
B-BBEE will be implemented in the Road Freight Transport Sector;
• To create Economic growth through Ownership, Management Control,
Enterprise and Supplier Development in the Road Freight Transport
Sector;
• To ensure the Entry of women, Youth and people living in Rural
areas at all levels of the industry so as to break the stranglehold of the
industry by urban-based males;
• To provide the basis for the Sector’s engagement with other
Stakeholders including Government and Labour.
AMENDED CODES PRINCIPLE CHANGES
REAL JOB CREATIONSupply chain diversificationGrowth in EME/QSE ExpenditureGrowth in 51% Black Owned Supplier Import ReplacementSupplier Development
SOCIO ECONOMIC DEVELOPMENTIncome generating ActivitiesSupporting future employees
B-BBEE CHANGESEmpowering Supplier StatusAmended ScorecardsAdjusted Recognition TableLevel Discounting
FAIR PEOPLE APPROACHEconomically Active Population (EAP)EE Act alignment and strengthening
OPEN SKILLS DEVELOPMENTIncreased targetIncreased incentive for disabilityTraining non employees is recognisedAbsorption incentives
B-BBEE PRIORITY ELEMENTS
• Ownership
– The sub-minimum requirement for ownership is 40% of Net value (40%
of the 8 points) based on the Time based graduation Factor provided.• Skills Development
– The sub-minimum requirement for Skills Development is 40% of the
Total weighting points for Skills Development.
• Enterprise and Supplier Development
– The sub-minimum requirement for Enterprise and Supplier
Development is 40% for each of the three categories, within the
Enterprise and Supplier Development element, namely Preferential
procurement; Supplier development and Enterprise Development.
– If the scorecard fails to meet any of these sub-minimum targets the acquired level will be discounted one level down.
“EMPOWERING SUPPLIER STATUS”
• Good citizen South African entity; – Complies with all regulatory requirementsMeet at least 3 of the following criteria;
1) At least 25% of costs of sales excluding labour costs and depreciation
must be procured from local producers or local supplier in SA. Labour costs
for the service industry is capped at 15%.
2) 50% of jobs created are for Black people provided that the number of
Black employees since the immediate prior verified B-BBEE Measurement is
maintained.
3) At least 25% transformation of raw material/beneficiation which
include local manufacturing, production and/or assembly, and/or packaging.
4) At least spend 12 days per annum of productivity deployed in assisting
Black EMEs and QSEs beneficiaries to increase their operation or financial
capacity.
5) At least 85% of labour costs should be paid to South African employees by
the Service Industry entities.
EQUITY OWNERSHIP
Indicators Charter Points
Charter Targets
Generic Points
Generic Targets
Voting Rights
In the hands of Black people 4 25% + 1 vote
4 25% + 1 vote
In the hands of Black Women 2 10% 2 10%
Economic Interest
In the hands of Black people 4 25% 4 25%
In the hands of Black Women 2 10% 2 10%
Black Economic interest in •Black designated groups•Participation in ESOP•Participation in BBOS•Participation in Co-operatives
3 3% 3 3%
Black new Entrants 4 15% 2 2%
Realisation points
Net Value/Net Economic Interest 8 10 year target
Graduation formula
8 10 year target
graduation formula
TOTAL POINTS 27 25
MANAGEMENT CONTROL
Indicators Charter Points
Charter Targets
Generic Points
Generic Targets
Board Participation
% Voting rights of Black people 2 50% 2 50%
% Voting rights of Black Women 1 25% 1 25%
% Black Executive Directors 2 50% 2 50%
% Black Women Executive Directors 1 25% 1 25%
Other Executive Management
% Black Executive Management 2 60% 2 60%
% Black Women Executive Management 1 30% 1 30%
Senior Management - EAP Applicable
% Black employees for all SM 2 60% 2 60%
% Black woman employees for all SM 1 30% 1 30%
SUB-TOTAL POINTS 12 12
MANAGEMENT CONTROL CONT.
Indicators Charter Points
Charter Targets
Generic Points
Generic Targets
Middle Management – EAP Applicable
% Black employees for all MM 2 75% 2 75%
% Black woman employees for all MM 1 38% 1 38%
Junior Management – EAP Applicable
% Black employees for all SM 2 88% 1 88%
% Black woman employees for all SM 1 44% 1 44%
Youth Employees – EAP Applicable
Youth in technical/professional positions 2 15% N/A
Operational staff – EAP Applicable
Black women % in Semi & unskilled levels 2 15% N/A
Employees with disability
% Black employees for all office staff 2 2% 2 2%
% Black woman employees for all office staff
1 1% N/A
TOTAL POINTS 25 19
SKILLS DEVELOPMENT
Indicators Charter Points
Charter Targets
Generic Points
Generic Targets
Skills Development Expenditure on programme specified in the Learning Programmes Matrix
Skills Development Expenditure on Black people as a % of the Leviable amount
8 6% 8 6%
Skills Development Expenditure on Black disabled employees as a % of the Leviable Amount
5 0.50% 4 0.30
Learnerships, Apprenticeships and Internships
Number of Black people participating on learnerships, apprenticeships, and internships and training specified in the learning programme matrix as a % of total employees
4 2.5% 4 2.5%
Number of Black unemployed participating on learnerships, apprenticeships, and internships and training specified in the learning programme matrix as a % of total employees
4 2.5% 4 2.5%
Bonus Points
Number of black people absorbed by the measured entity at the end of Learnership programme
5 100% 5 100%
TOTAL POINTS 21 20
ENTERPRISE AND SUPPLIER DEVELOPMENT
Indicators Charter Points
Charter Targets
Generic Points
Generic Targets
Preferential Procurement as a percentage of the Total Measured procurement spend
Procurement spend from all Empowering suppliers based on their Procurement Recognition Level.
5 80% 5 80%
Procurement spend from all Empowering suppliers that are Qualifying Small Enterprises.
3 15% 3 15%
Procurement spend from all that are Exempted Micro Enterprises
4 15% 4 15%
Procurement spend from all Empowering suppliers that are 51% black owned.
9 40% 9 40%
Procurement spend from all Empowering suppliers that are 30% black woman owned.
4 12% 4 12%
Bonus Points
Procurement spend from designated group Suppliers that are 51% black owned.
2 2% 2 2%
SUB- TOTAL POINTS 25 25
ENTERPRISE AND SUPPLIER DEVELOPMENT
Indicators Charter Points
Charter Targets
Generic Points
Generic Targets
Supplier Development
Annual value of all Supplier Development Contributions made by the measured entity as a percentage of the target
10 2% of NPAT 10 2% of NPAT
Enterprise Development
Annual value of Enterprise Development Contributions and Sector Specific programmes made by the Measured entity as a percentage of the target
5 1% of NPAT 5 1% of NPAT
Bonus Points
For the graduation of one or more Enterprise Development beneficiaries to the Supplier Development Level
1 1
For creating one or more jobs directly as a result of Supplier Development and Enterprise Development initiatives
1 1
TOTAL POINTS 40 40
SOCIO-ECONOMIC DEVELOPMENT
Indicators Charter points
Charter targets
Generic points
Generic targets
Socio economic development initiatives – % of NPAT
Annual value of Socio Economic Development contributions made by the Measured entity.
10 1.5% of NPAT 5 1% of NPAT
• List of projects for Enhanced Recognition points:
• Carbon Offset projects - Accredited green programmes (Trees for
Africa)
• Wellness programmes – Bargaining Council Wellness and Community
Clinics
• Research & Development projects - Fatigue management by DoT or
MEC
• Road Safety projects – Captain Safety, National Prayer day by DoT
• NSEWA Road Safety Learning Network – Enhancing driver skills and
health
ROAD FREIGHT GENERIC SCORECARD SUMMARY
• OWNERSHIP– No changes compared to the Generic Scorecard
• MANAGEMENT CONTROL– Additional points for Junior Management, – Additional sub-elements for Youth Employees and Operational female
employees,– The exclusion of Drivers in the calculation for Disabled employees,
• SKILLS DEVELOPMENT– 1% Skills Development Levy is included for the Transport Charter Industry
only.– List of Mandatory training has been submitted with reasons for inclusion.
• ENTERPRISE AND SUPPLIER DEVELOPMENT– List of Procurement exclusions from 51% Black owned companies submitted
to the Department of Transport for consideration at 100% on: Fuel, Oil, Maintenance Spares, Banks, Tyres, Insurance, Vehicles and Trailers.
• SOCIO-ECONOMIC DEVELOPMEMT– List of Enhanced recognition projects has been submitted for approval.
Micro Enterprises Exemption and Classification
• Exempted Micro Enterprises (EME) – R0 to R10m– 75% black beneficiaries qualifies for Level one Contributor, B-BBEE Recognition Level of 135%– 51% black beneficiaries qualifies for Level two contributor, B-BBEE Recognition Level of 125%
• Qualifying Small Enterprises (QSE) – R10m to R50m– 75% black beneficiaries qualifies for Level one Contributor, B-BBEE Recognition Level of 135%– 51% black beneficiaries qualifies for Level two contributor, B-BBEE Recognition Level of 125%
• Both 51% black owned QSEs and EMEs to obtain a Sworn Affidavit annually confirming their Total Revenue/Allocated Budget/Gross receipts of R50 million or less, and the Level of black percentage of beneficiaries.
QSE SCORECARD SUMMARY
ELEMENTS 2007 2013
BEE Scorecard Points Bonus Points Bonus
Ownership 25 3 25 0
Management Control 25 4 15 0
Skills Development 25 0 25 5
Enterprise and Supplier Development
25 0 30 3
Socio-economic Development
25 0 5 0
TOTAL 100 7 100 8
• 40% minimum threshold is applicable on three critical elements
EQUITY OWNERSHIP
Indicators Charter Points
Charter Targets
QSE Points
QSE Targets
Voting Rights
In the hands of Black people 5 25% + 1 vote
5 25% + 1 vote
In the hands of Black Women 2 10% 2 10%
Economic Interest
In the hands of Black people 5 25% 5 25%
In the hands of Black Women 2 10% 2 10%
Black new Entrants or black designated groups
3 2% 3 2%
Realisation points
Net Value/Net Economic Interest 8 10 year target
Graduation formula
8 10 year target
graduation formula
TOTAL POINTS 25 25
• No change
MANAGEMENT CONTROL
Indicators Charter Points
Charter Targets
QSE Points
QSE Targets
Executive Management
% Black Executive Management 5 50% 5 50%
% Black Female Executive Management 2 25% 2 25%
Senior, Middle and Junior Management
% Black representation at Senior, Middle and Junior Management.
6 60% 6 60%
% Black female representative at Senior, Middle and Junior Management.
2 30% 2 30%
Youth Employees
Youth in technical/professional positions
2 10% N/A
SUB-TOTAL POINTS 17 12
• The EAP Calculation is not applicable for the QSE scorecard
SKILLS DEVELOPMENT
Indicators Charter Points
Charter Targets
QSE Points
QSE Targets
Skills Development Expenditure
Skills Development Expenditure on Learning programmes specified in the Learning Programmes Matrix for Black people as a % of the Leviable amount
20 3% 15 3%
Skills Development Expenditure on Learning programmes specified in the Learning Programmes Matrix for Black females as a % of the Leviable Amount
5 1% 7 1
Skills Development Expenditure on Learning programmes specified in the Learning Programmes Matrix for Black people with disabilities as a % of the Leviable Amount
N/A3 0.15
Bonus Points
Number of black people absorbed by the measured entity at the end of Learnership programme
N/A5 100%
TOTAL POINTS 25 25
ENTERPRISE AND SUPPLIER DEVELOPMENT
Indicators Charter Points
Charter Targets
QSE Points
QSETargets
Preferential Procurement as a percentage of the Total Measured procurement spend
Procurement spend from all Empowering suppliers based on their B-BBEE Procurement Recognition Levels.
15 60% 15 60%
Procurement spend from all Empowering suppliers that are at least 51% black owned based on their B-BBEE Procurement Recognition Levels.
5 40% 5 15%
Bonus Points
B-BBEE Procurement spend from Designated Group Suppliers that are at least 51% black owned based on the B-BBEE Procurement Recognition Levels
N/A 1 1%
SUB- TOTAL POINTS 20 20
ENTERPRISE AND SUPPLIER DEVELOPMENT
Indicators Charter Points
Charter Targets
QSE Points
QSETargets
Supplier Development
Annual value of all Supplier Development Contributions made by the measured entity as a percentage of the target.
5 1% of NPAT 5 1% of NPAT
Enterprise Development
Annual value of Enterprise Development Contributions and Sector Specific programmes made by the Measured entity as a percentage of the target
5 1% of NPAT 5 1% of NPAT
Bonus Points
For the graduation of one or more Enterprise Development beneficiaries to the Supplier Development Level
N/A 1
For creating one or more jobs directly as a result of Supplier Development and Enterprise Development initiatives
N/A 1
SUB- TOTAL POINTS 30 30
SOCIO-ECONOMIC DEVELOPMENT
Indicators Charter points
Charter targets
Generic points
Generic targets
Socio economic development initiatives – % of NPAT
Annual value of Socio Economic Development contributions made by the Measured entity.
5 1% of NPAT 5 1% of NPAT
TOTAL POINTS 5 5
IMPLEMENTATION AND MONITORING
• Transport Sector B-BBEE Charter Council
– An independent body with a mandate to oversee the implementation of the Charter.
– Conduct reviews and take decisions in consultation with Stakeholders per sub-sector around the targets that will be applied from the effective date
– Undertake a comprehensive mid-term review in 2,5 years and make decisions regarding the implementation of the Charter.
– Appoint an Executive to receive, consider and approve annual audits from each measured entities within the sub-sector charter.
– Prepare an annual review which outlines progress and evaluates new areas of intervention.
– Submit the annual review to the BEE Advisory Council for publication.
The association does not believe that the industry should fund the Council but entities are allowed to voluntary contribute.
IN CONCLUSION
• The DTI issued a statement in May 2015 indicating the following;
– The Transitional period for the alignment of the Sector Codes is extended to the end of October 2015.
– All valid B-BBEE Certificates issued under the Old Codes of Good Practice gazette No 29617, as well as the relevant Sector Codes should remain valid, be accepted and treated as “Empowering Suppliers”.
– The statement on Black participants in Broad-Based Ownership Schemes and Employee Share Ownership Programmes has been withdrawn by the DTI until further notice.
– Introduced a 5th criteria for the Empowering Supplier Status
• The Proposed Draft Scorecard will be presented to the Minister for approval before submitting to the DoT for the gazetting process.
• We urge companies to make use of the extended period to prepare for compliance with the new codes.