Implications of the Construction Code on small enterprise development?

1. Implications of the Construction Code on small enterprise development? Pierre Blaauw South African Federation of Civil Engineering Contractors

2. BROAD BASED TRANSFORMATION SEVEN PILLARS CULTURE OF TRANSFORMATION CULTURE OF COMPLIANCE

3. Construction Charter

4. Legislative Impetus • Section 12 of the B-BBEE Act (53 of 2003): • The Minister must publish in the Gazette for general information and promote a transformation charter for a particular sector of the economy, if the Minister is satisfied that the charter: • Has been developed by the major stakeholders in that sector; and • Advances the objectives of this Act

5. Construction Charter

6. DTI Codes on Sector charters • Code 000, Statement 003 • The gazetting of a Transformation Charter under section 12 of the Act is evidence of the commitment to promote B-BBEE in the applicable sector and is not binding on organs of state of public entities. • Code 000 to 700 … remain applicable to enterprises in the sector, despite the gazetting of a sector charter under section 12. • A Sector Code enjoys equal status with that of any other Code.

7. Legislative Impetus • Section 9 of the B-BBEE Act (53 of 2003): • In order to promote the purpose of the Act, the Minister may by notice in the Gazette issue codes of good practice on black economic empowerment. • Every organ of State an public entity must take into account and, as far as is reasonably possible, apply any relevant code of good practice issued in terms of the Act in developing and implementing a preferential procurement policy.

8. Construction Charter

9. Dynamics COMPANY SECTOR DTI – CODES SECTOR SPECIFIC SIZE BEE CONTRIBUTOR LEVEL 1-9 RATIO 1.35 to 0 BEE COMPLIANCE

10. PVT CLIENT GOVERNMENT 90/10 80/20 BEP CONTRACTOR ALL SUPPLIERS OF GOODS AND SERVICES GOODS SERVICES CONTRACTOR BEE PROCUREMENT TOTAL PROCUREMENT BEE PROC = AMOUNT * RATIO

11. SCORECARD IMPLICATIONS MAXIMIZE SCORE TO OFFER BEST POSSIBLE VALUE PROPOSITION

13. OWNERSHIP • Voting Rights • Black Women • Economic Interest • Black Women • Realisation Points

15. CONTROL • SENIOR TOP MANAGEMENT • ADJUSTED RECOGNITION FOR GENDER

17. EMPLOYMENT EQUITY • Black representation within all levels of management (using adjusted recognition for gender). • Black representation within all employment (using adjusted recognition for gender).

19. SKILLS DEVELOPMENT • SKILLS SPENDING And • DEMOGRAPHIC REQUIREMENT (70%) using adjusted recognition for gender.

21. PREFERENTIAL PROCUREMENT • BEE PROCUREMENT SPEND ON ALL SUPPLIERS AS PERCENTAGE OF TOTAL PROCUREMENT SPEND

23. ENTERPRISE DEVELOPMENT • AVERAGE VALUE OF ED CONTRIBUTIONS AS PERCENTAGE OF NPAT/LEVIABLE AMOUNT

25. SOCIO ECONOMIC CONTRIBUTIONS • AVERAGE ANNUAL VALUE OF ALL SED CONTRIBUTIONS MADE BY ENTITY AS PERCENTAGE OF NPAT/LEVIABLE AMOUNT

26. 4 OF 7

27. WHAT IS IMPORTANT? • QSE OR EME • SCORE OUT OF 100/ BEE CONTRIBUTION • BLACK OWNERSHIP/ BLACK WOMEN • VALUE ADDED SUPPLIER • ED BENEFICIARY

28. PROCUREMENT • A RECIPIENT OF ED CONTRIBUTIONS FROM THE MEASURED ENTITY – SPEND CAN BE MULTIPLIED BY 1.2 • VALUE ADDED SUPPLIER: NPBT + LABOUR COST > 25% OF TOTAL REVENUE MULTIPLY SPEND BY 1.25

29. ENTERPRISE DEVELOPMENT

30. ENTERPRISE DEVELOPMENT (5/5) PARENT COMPANY ED MATRIX E D R Agreement Shareholding Limited to 20% Legal/Employ /50% BO/30% BWO Needs Analysis Development Program Schedule of Activities Allocate Resources Appoint Champion E D P Qualify for ED Matrix ED BENEFICIARY

31. ENTERPRISE DEVELOPMENT (10/5) PARENT COMPANY Cat A: EME, QSE that are 50% BO or 30% BWO Monetary & Non Monetary Contributions BENEFOT FACTOR MATRIX Grant Contribution (100) Discounts (100) Interest Free Loans (100) Services Rendered (80) Cat B: Any entity that is 50% BO, 30% BWO or 25% BO with BEE status 1-6. TOTAL CONTRIBUTIONS AFTER BFM * 1.25 if CAT A/ *1 if CAT B

32. THANK YOU Even if you are on the right track, you’ll get run over if you just sit there. Will Rogers (1879 – 1935)