Presentation to the Public Works Portfolio Committee

1. Thabo Masombuka CEO – CSCC Presentation to the Public Works Portfolio Committee

2. WHAT HAS PREVIOUSLY BEEN PRESENTED • INTRODUCTION • The purpose of this PRESENTATION is to provide the latest and progress information on the work of the Construction Charter Council since its inception in 2010 • We are aware that on the basis of previous engagement and presentation, the following was covered : • The Background and processes towards the gazette of the charter • This covered at length the consultation process in the industry • The gazette of BBBEE Codes in 2007 and the framework for charters • The signatories to the charter and the approval in June 2009 • The establishment of the Charter Council in 2010 and registration as a NPO • The outline of the construction code targets and measurement period

3. TO BE COVERED IN THIS PRESENTATION • Broad Outline of CSCC • Members of EXCO • Appointment of the Chief Executive Officer • Finalization of the BASELINE STUDY for purposes of annual reporting • Progress in the appointment of the CHAIRPERSON • Increasing compliance targets (Self Regulation) • Monitoring and evaluation going forward • Public Engagement and Self Funding Model • Challenges facing the Industry

4. BROAD OUTLINE OF THE CSCC The Construction Sector Charter Council (CSCC) is the result of the gazette of the Construction Sector Codes by the Minister of Trade and Industry on the 05th of June 2009. The Minister gazetted the Codes in terms of Section 9 (1) of the Broad Based Black Economic Empowerment Act 53 0f 2003. The Council is made up of representatives of 17 constituency organizations and operates through an Executive Committee and 4 sub-committees, namely : Finance Monitoring and Evaluation Communication and Legal

5. BROAD OUTLINE OF THE CSCC (cont) The Council is responsible for the monitoring and evaluation of the construction codes and ensures that : - There is substantive compliance with the construction codes - There is annual reporting to the DPW, DTI and BBBEE Advisory Council - Measurement of the objectives of the construction code The different sub-committees have been set up to deal directly with the overall responsibilities of the Council, such as the Monitoring and Compliance deal with measurement and annual reporting.

6. EXCO MEMBERS Sam Moleshiwa Nico Maas Felix Fongoqa

7. EXCO MEMBERS (Cont) Phindi Mokoena Lydia Bici – Acting Chair Thabo Masombuka - CEO Not in the pictures are Narius Moloto and Piet Matosa (representing BCAWU and NUM, respectively. The management of the CSCC is currently led by THABO MASOMBUKA, who is the recently appointed CEO

8. THE APPOINTMENT OF THE CEO • In the last presentation made in August 2012, the DDG for Policy and Regulation, who is also Acting Chairperson of the CSCC reported that the process for the appointment of the CEO of CSCC has commenced. • As of the 07 January 2013, the new CEO > Thabo Masombuka was appointed on a fixed term 3 year contract. • The appointment effectively means that, amongst other things: • The CSCC administration will be established and managed by the CEO • The reporting of compliance of the construction codes commence • He will drive the responsibilities of communicating the work of the CSCC • The practice notes for the industry will also be developed

9. FINALIZATION OF THE BASELINE STUDY • One of the priorities agreed upon by the CSCC is the finalization of the baseline report on the status of BBBEE in the construction sector since the gazette of the Sector Code in 2009. • This is important to ensure the following : • That the CSCC has reliable data to verify whether there has been progress data in empowerment in the Construction sector. • To enable the CSCC to engage with the DTI on areas of alignment with the new codes based on factual data in the sector. • To ensure that the annual reports sent to the dti and the BBBEE advisory council are substantive and factual. • To identify barriers to transformation and investigate rectification measures. • To ensure that there is accurate implementation and prioritization of identified trends.

10. PROGRESS IN THE APPOINTMENT OF THE CHAIR • Currently the CSCC is under the guardianship of the DPW - through the DDG: Construction and Property Policy Regulation. • The CSCC Constitution provides that : • The Minister of Public Works shall appoint an independent Chairperson. • He/She does this in consultation with the CSCC. • The Chairperson shall be appointed for 2 years. • In line with this, the Minister has invited the CSCC to nominate three persons. • An appointment is expected to be announced soon. • After the appointment of the Chairperson, the CSCC will be formally launched.

11. INCREASED TARGETS FOR COMPLIANCE (Self regulation) Gazetted in June 2009, the construction sector code became effective, legally binding and applicable in the sector from the date of gazette. In order to ensure continual progress on transformation within the sector, they were legislated with two measurement periods. The implications is that for the second measurement period ,targets on Employment Equity, Management Control and Preferential Procurement have increased significantly . The two periods in question are : This means that from this year, increased targets are now applicable for Companies to enjoy the same scorecard rating as last year.

12. MONITORING & EVALUATION GOING FORWARD • The responsibility for the monitoring and evaluation of the impact of the construction sector code lies with the CSCC through the Monitoring and Evaluation Sub-Committee • Monitoring the progress of the construction sector code will involve the following : • Approving and commissioning research and development. • Approve and provide guidance for sector determination. • Liaising with DTI on interpretation and performance Assessment. • Share regular updates on all aspect of the codes. • Ensuring that Verification Agencies provide information to the CSCC. • Resolving any disputes, or litigations that may arise in the process.

13. PUBLIC ENGAGEMENT & FUNDING MODEL • Currently funded through the DPW Seed Capital, the CSCC has prioritised the development of a self – funding model to ensure that its programmes are commercially viable. • Currently, a model is being deliberated and the following options, or a combination is being considered : • Annual contributions by construction companies in accordance with their revenue size. • The accreditation fee payable by Verification Agencies doing business in the sector. • Percentages of Enterprise development funds in the sector. • The self funding model will make it easier for the CSCC to engage in the following programmes that are necessary for public engagement and awareness, advocacy and communication , road shows and issue best practices.

14. CHALLENGES FACING THE CONSTRUCTION INDUSTRY • The gazette of the construction code has been gazetted with the aim of ensuring inclusivity and increase the transformation in the Construction sector. It is well known that over the past few years, the industry has faced investigations of collusive and price fixing practices by the Competition Commission and recently there have been reports of a parallel investigation by the Hawks. • The CSCC views these in the most serious light and has issued a public statement on 5th February stating that : • We are disappointed that there has been such collusive behaviour. We believe that any collusion and price fixing will have an adverse affect on transformation. • We support the investigations and respect the integrity of the process. • We have called on all our member organizations, whether to co-operate fully with the investigation. • We have urged authorities to expedite these investigations to avoid speculation that questions the integrity of the entire industry.

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