By Mantis Networks

The Dti has, at last, released a statement clarifying the status of Sector Codes.  The wording on the Dti web site: http://www.thedti.gov.za/editmedia.jsp?id=3555  is as follows:-

“Sector Charter Councils have until the 15 November 2015 to submit aligned Sector Codes for approval to Minister of Trade and Industry, Dr Rob Davies.

All existing Sector Codes that have not submitted application for approval to the Minister to be aligned with Broad-Based Black Economic Empowerment Codes of Good Practice will be repealed.

Once sector codes are repealed, entities operating in the affected sectors will use the Amended B-BBEE Codes of Good Practice for measurement.

The background to this action by Minister Davies is that on 15 May 2015, all the existing Sector Codes which were not aligned to the Amended Broad Based Black Economic Empowerment (B-BBEE) Codes of Good Practice were given further extension to complete the alignment process by 30 October 2015. The extension was given through a Notice, Government Gazette Number 38799, which further stated that a consideration shall be made to repealing those sector codes that are not aligned and ready for gazetting by 30 October 2015.”

So the cut off has been extended from 30th October to 15th November and relates not to a sector code being finally Gazetted but to a draft being submitted to the Dti for approval. On that basis, the Property, MAC and Tourism aligned sector codes are all in process since they have been published for comment.  The CA draft aligned code was published in October 2014 and we presume has been submitted to the Dti although there has been no formal Gazette to our knowledge.  We understand from the BEE grapevine that the Financial Sector Code and the Transport sub-sector charters are also well developed and close to Gazette so could be finally submitted for approval by 15th. I also hear that the ICT Charter Council has been formed and has rushed through a draft aligned sector code. We have heard nothing regarding Forestry or Agri-BEE; has anyone got an inside track on either of these two?  

The Construction Charter Council has been deadlocked over black ownership targets for 14 months so unless they can resolve the impasse within the next couple of days, the construction sector will have to use the Dti’s Amended Codes until such time as they can bring an agreed Charter forward to the Minister and complete the legislative process. SAFCEC (South African Forum of Civil Engineering Contractors) has a statement to this effect on their website: http://www.safcec.org.za/news/255703/Application-of-Construction-Codes–Advisory-Note.htm.

As regards the mines and mineral energy, last Friday in Gazette No 39350, the Department of Mineral Resources gave notice that mining companies and the upstream petroleum industry are exempt for 12 months from the provisions of the BEE Act while the Mineral and Petroleum Resources Development Act, the Mining Charter and the Dti's COGP are aligned.

We are unsure of how the legislative repeal procedure works but assuming it takes some time, the DTi could instruct BEE Auditors not to use specific Charter Codes that are under a repeal process. I believe we should plan for this outcome.