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Construction Sector Broad-Based Black Economic Empowerment Charter

Category: Policy/Strategy
Binomial Name: Government of the Republic of South Africa
Date: 9 February 2007
Sub Category:Policy/Strategy (South Africa)
Location:Republic of South Africa
Alternative Names:
  • Construction Sector BEE Charter
  • Subject Matter:Collaboration / Partnership | Economic Development | Employment and Training | Housing, Construction and Infrastructure
    URL: http://www.info.gov.za/gazette/notices/2007/29616.pdf
    Summary Information:
    The Construction Sector Charter on Black Economic Empowerment ('the Charter') came into operation on 9 February 2007 after being gazetted in accordance with section 12 of the Broad-Based Black Economic Empowerment Act (2003).

    The signatories to the Charter are: the Government National Department of Public Works, African Builders' Association, The Association of South African Quantity Surveyors, Electrical Contractors' Association South Africa, Master Builders of South Africa, National Association of Black Contractors and Allied Trades, National Federation for the Building Industry, The South African Association of Consulting Engineers, South African Black Technical and Allied Careers Organisation, South African Federation for Civil Engineering Contractors, South African Institute of Architects, Southern African Institute of Steel Construction, South African Women in Construction, Women for Housing, National Union of Mineworkers and the Building Construction & Allied Workers Union.

    The Charter provides a basis for transforming the South African construction sector to incorporate the principles of Black Economic Empowerment ('BEE'). BEE is one of the range of measures being used to counteract the economic effects of apartheid in South Africa.

    Detailed Information:
    Application

    The Charter is to operate from 9 February 2007, applying to the entire construction sector, including 'all enterprises that are involved in the creation, expansion, and/or maintenance of fixed assets related to residential or non-residential buildings, infrastructure, or any other form of construction works in South Africa' (Charter, 4.1). However, the Charter will apply in a qualified manner with regards to small institutions (Charter, 4.12).

    Adoption of the Charter under section 12 of the Broad Based Black Economic Empowerment Act 2003 on 9 February 2007 renders the Charter a statement of intent, which does not create legally binding obligations.

    Purpose

    The aim of the Charter is to address the challenges facing BEE in the construction sector, including vast inequities in control and ownership, declining investment, a depleted skills base and inadequate working conditions, in order to 'actively promote a vibrant, transformed and competitive construction sector that provides adequate services to the domestic economy, reflects the South African nation as a whole, and contributes to the establishment of an equitable society' (Charter, 1.5).

    Provisions in the Charter include strategies and targets which endeavour to further the aims of BEE in the areas of:
  • ownership;
  • control;
  • employment equity;
  • skills development;
  • procurement; and
  • enterprise development.

    Implementation and the Scorecard

    The Charter will be monitored and implemented by a Charter Council ('the Charter Council'). Enterprises in the construction industry will report annually to the Charter Council on its progress and publish an annual BEE report which includes the audited scorecard. Institutions will be given a rating each year in accordance with their scorecard. Importantly, the scorecard will be utilised by the Government and the private sector in the adjudication of contracts awarded to institutions.

    The scorecard includes indicator targets and scores under each BEE element. Targets are set for December 2010 and December 2013 respectively, and include:
  • 30% voting rights for black people, including 10% black women;
  • 30% economic interest for black people, including 10% black women;
  • 40% black people as percentage of the board, including 20% black women;
  • 25/30% black senior management as percentage of total senior management, including 10/16% black women; and
  • 70% total weighted procurement on BEE-accredited companies as a percentage of total procurement.

    The Charter Council will review stipulated targets after the Charter has been in operation for three years. A comprehensive review of the Charter's impact will be undertaken following seven years of the Charter's operation.


  • Related Entries

    Organisation
  • Department of Trade and Industry (South Africa)
  • Department of Public Works (South Africa) - Signatory
  • Master Builders South Africa - Signatory
  • African Builders Association - Signatory
  • The Association of South African Quantity Surveyors - Signatory
  • Electrical Contractors Association South Africa - Signatory
  • National Federation for the Building Industry - Signatory
  • South African Association of Consulting Engineers - Signatory
  • South African Black Technical and Allied Careers Organisation - Signatory
  • The South African Institute of Architects - Signatory
  • Southern African Institute of Steel Construction - Signatory
  • South African Women in Construction - Signatory
  • Building Construction & Allied Workers Union - Signatory
  • National Association of Black Contractors and Allied Trades - Signatory
  • National Union of Mineworkers - Signatory
  • Women for Housing - Signatory
  • The South African Federation of Civil Engineering Contractors - Signatory
  • Legislation
  • Broad-Based Black Economic Empowerment Act, 2003 (South Africa)
  • Policy/Strategy
  • Black Economic Empowerment
  • Broad-Based Black Economic Empowerment Codes of Good Practice
  • Apartheid

  • References

    Resource
    Department of Trade and Industry (South Africa) (9 February 2007) Construction Sector Charter on Black Economic Empowerment

    Glossary

    Black Economic Empowerment Transaction (South Africa)

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