INTRODUCTION AND IMPLEMENTATION ON THE CODES OF GOOD PRACTICE

2. INTRODUCTION AND IMPLEMENTATION ON THE CODES OF GOOD PRACTICE FOR BROAD – BASED BLACK ECONOMIC EMPOWERMENT

6. ISSUES FOR CONSIDERATION WHEN ALIGNNINGRELEVANT POLICIES PROGRAMMES WITH COGP • Identification of all Policies that seek to address past imbalances and /or promote the economic advancement of black people. • Review provisions of those Policies and determine whether they address economic transformation. • Consult and liaise with the dti in this respect • In the event that any piece of Legislation is silent on transformation, the COGP to be applied when read in conjunction with Section 10; • If the are specific provisions in any piece of Legislation that seek to address transformation, consideration must be given whether the requirements are targeted at Broad Based Black Economic Empowerment; • Review , Amend and Align all affected Policies, Programmes.

9. CHARTERS • Charters Gazetted under Section 12 since the Gazetting of the Codes on the 9th February 2007 • Financial Services Charter • To Apply for Section 9 before the end of the transitional period • Have requested to retain their scorecard until the alignment process has been completed • Construction Charter • Awaiting alignment under Section 9 • Property Charter • Application for gazetting under Section 12 approved by the dti • Gazetting underway

10. CHARTERS • Charters currently being developed for Gazetting under Section 12 & Section 9 • Transport Charter • Agriculture Charter • Forestry Charter • Healthcare Charter • Liquor Charter

11. PPPFA • Amendment / Alignment of the PPPFA • The Working Group has finalised the PPPF Amendment Bill • The “5 Core Principles” of Section 217 of the Constitution have been included in the Amendment Bill: • Transparency • Cost Effectiveness • Competitiveness • Fairness • Equitability

12. PPPFA • The Amendment Bill proposes the following : • The Recognition levels as embedded in the Codes would be a requirement for the evaluation of Tenders, Bids and Contracts • Organs of State would determine the minimum recognition level for consideration of a Bid, Tender or Contract • Targets will be determined by Accounting Officers for Sector Codes Gazetted under Section 9 of the BEE Act and Statement 003 of the Codes of Good Practice for B-BBEE • Evaluation Criteria will be based on price submitted by Bidders • Exempted Micro Enterprises will have to substantiate as per the requirements in the Codes ( Audited Certificate, SARS tax clearance certificate or an Accredited Verification Certificate) stating their status • EME’s will qualify as Level 3 Contributors as detailed in the Codes • Price and Functionality will be evaluated separately as opposed to current requirements • Practice Notes will be issued by NT with regards to : • Black Owned or Black Women Owned businesses

13. PPPFA • WAYFORWARD : Final draft of the PPPF Amendment Bill will be forwarded to all Cabinet Members by the Minister of Finance • A Strategy for alignment with other pieces of Legislation is being formulated

16. MARKETING & COMMUNICATION • Two Pronged strategies identified, namely: • Short - term Marketing & Communication of BEE • Long - term Marketing & Communication of BEE • Short-Term Strategy: • Targeting Government Departments • All National Departments • Provincial & Local Government • KZN, WESTERN CAPE, MPUMALANGA, EASTERN CAPE, NORTHERN CAPE • Aimed at educating and training Procurement Officers, Supply Chain Managers and all parties influencing the implementation of the Codes of Good Practice for Broad-Based Black Economic Empowerment

17. MARKETING & COMMUNICATION • Long-Term Strategy: • Marketing Division has developed a Marketing and Communication Strategy for the entire dti which entails Public Relations, Radio, TV, Print, Exhibitions, Events, Launches, Conferences and Seminars • BEE to be located within the broader dtistrategy • This will ensure that all Marketing and Communication undertaken by the dti includes Broad-Based Black Economic Empowerment

18. EQUITY EQUIVALENTS • The EE Secretariat and Committee has been established • Clear Guidelines have been provided on the dti website • One EE programme has been approved for Hewlett Packard to the value of $ 13,5 million • CONSIDERATIONS: Due to outcomes of the evaluations there is a change in mindset by Multinationals in re-opting to undertake the sale of Equity or Sale of Assets as prescribed in the Codes • BEE Facilitators such as Private Equity Funds, to be considered and endorsed by the dti as per the Codes. • CONCERN : That Parastals not giving due recognition to the principle of Equity Equivalents (e.g. Telkom’s insistence on ownership)

19. IT DATABASE • The Codes indicate that the dti will establish a publicly accessible Central Database containing the information underlying each Accredited Verification Certificate • This Database will also provide a Self – Assessment tool for calculating the BEE Score • CHALLENGE : Service Provider has been identified and appointed - in view of the dti’s indecisiveness we are currently in breach of the contract • WAYFORWARD : Waiting for effecting contract between the dti and the Service Provider

20. FRONTING • Appropriate measures need to be considered in order to address the serious impact of Fronting • Fronting is fundamental to the Codes, and hinders transformation • The Codes should provide gazetted guidance on dealing with Fronting • Fronting is an impediment that hinders real meaningful participation by Black people in the economy

21. FRONTING • CHALLENGE : Recorded Fronting Cases, excluding those reported through the Fraud hotline and to Law Enforcement Agencies • January 2006 – December 2006 = 22 • January 2007 – July 2007 = 15 • WAYFORWARD : Fronting should be aligned with existing Legislation on fraud • Technical Committee to be set up to deal with the process of legislating Fronting as a prosecutable offence • The BEE Act should be amended to include Fronting as a prosecutable offence

22. THANK YOU