Amended Sector Codes
Amended B-BBEE Sector Codes and What they Mean for your Industry
The Department of Trade and Industry Minister, Rob Davies recently announced amendments to the Financial, Agricultural and Construction Sector Codes. LFP Training’s Head of Operations, Jaco Posthumus elaborates on these amendments and how they may affect your business. Now, more than ever, re-looking your company’s approach to skills development in-line with B-BBEE policies is critical in bridging the gap in education and reducing inequality.
For those operating in the financial sector, here’s what to expect:
“The aim of the amended codes in a nutshell is for empowerment financing to ensure that black-owned entities are adequately supported. Here, black agriculture funding is necessary to assist with the land reform process and transformational infrastructure financing (which was previously neglected in townships and rural areas) comes to the fore” says Jaco. “It’s important to note that this is a key upliftment and transformation mouthpiece for South Africa with a required spend of no less than R122 Billion by the sector under Empowerment Financing to investment”.
Access to financial services will be affected, these include: inclusive banking, access to affordable and understandable long term insurance risk cover, and access to affordable and understandable short term insurance risk cover. Jaco continues saying: “The measurement of this element will be based on whether there is penetration of products, development of appropriate products, densification of service points, electronic access, and geographic access amongst the LSM 1-5 beneficiaries”.
Construction sector changes:
With the last codes for this sector gazette in 2009, the amended codes implemented in 2017 looks to introduce priority elements to the construction codes. “While companies may find these are now harder to reach based on the new codes, we feel that these should be embraced. Companies will be required to meet the at least the sub-minimum on the three priority elements” says Jaco.
Jaco elaborates saying that in the past, the industry has come under the spotlight and these codes look to once again promote fairness, best practice and compliance. “The recent amended codes are rigid and require companies to meet the priority elements – this is probably the most critical amendment. In failing to do so, companies will be forced to make some changes within their organisations – from both a skills development and a ownership/ management point of view”.
“The second most critical amendment to your business is of course that the codes are much stricter to reach the desired level and here, a company cannot for example be a level 3 without having the correct ownership structures in place,” Jaco continues.
The code furthermore promotes small business enterprises and the growth thereof.
What businesses operating in the agricultural sector can come to expect
“Agriculture is the bedrock of our economy and a very important contributor to its development. This is evident by the latest 2017 third quarter Statistics on Gross Domestic Product which shows that agriculture production has risen by 44.2% and was the main driver of the 2% GDP growth of the third quarter” Jaco explains.
Concerns have been expressed in the past calling for more flexibility relating to AgriBEE Sector Codes. Today, the amended codes look to strengthen a drive towards job creation and equal opportunities for black suppliers, black commercial farmers and black industrialists.
“The sector code makes provision for current owners of land to transfer at least 30% of productive agricultural land under the ownership element. This is however not static and will be reviewed on an ongoing basis” Jaco concludes.