Black economic empowerment


Key empowerment charters

29 October 2004 The development of industry-specific black economic empowerment (BEE) charters in South Africa is an on-going process. However, charters have alread been developed for several sectors key sectors, including mining, the petroleum and martime sectors, tourism and financial services. An empowerment framework for the country's agricultural industry has also been launched, charters on BEE in the transport, construction and wine industries - as well as the tourism BEE scorecard - are due for completion by the end of 2004, and work has started on charters for the health and cosmetics sectors. Each charter is tailored to suit a particular industry, the charters generally stipulate a target of 25% black ownership over the next 10 years. "When we achieve that goal by 2014, we will have substantial levels of empowerment in the economy of about 25 to 30 percent", Department of Trade and Industry director-general Lionel October said recently. "That is the critical mass one needs to create a non-racial and de-racialised economy which can grow on a sustainable basis." Mining charter The vision behind the country's mining charter is to achieve a globally competitive mining industry that can benefit all South Africans. It is an important development in a sector historically dominated by white capital and profiting off the cheap labour provided by a disempowered black majority. The stated goal of the charter is to "create an industry that will proudly reflect the promise of a non-racial South Africa". One of its key objectives is to achieve 26% ownership of mining companies by previously disadvantaged people within the next 10 years. The charter provides a framework to help mining companies comply with the Mineral & Petroleum Resources Development Act, which obliges mining companies to promote black economic empowerment when applying for new mineral rights or converting current rights. A key component of the charter is the mining scorecard, which provides a framework for measuring the BEE process in the sector. The scorecard has three core elements: direct empowerment through ownership and control of enterprises and assets; human resource development and employment equity; and indirect empowerment through preferential procurement and enterprise development. Financial sector charter The financial charter has been developed by the sector as a whole, representing banks, insurers, black business, fund managers and brokerage firms. The charter is a voluntary commitment agreed on unanimously by 10 industry associations. Signatories to the charter believe it will be a key driver of sustainable growth, redressing social and economic inequities in the country and broadening the skills and asset base of the whole economy. The charter provides for significant increases in black ownership, management and skills development over the next 10 years. It emphasises the need for procuring services from black businesses in the sector and fostering new and developing BEE firms through joint ventures, skills transferral and infrastructural support. The charter constitutes a policy framework for the future development of the industry, and is expected to underpin sound business practices and maintain the strength and stability of the financial sector as a whole. In September 2004, Finance Minister Trevor Manuel announced the establishment of a 21-member council to review and monitor the implementation of the goals set out in the charter. ICT Charter A working group formed by companies in SA's information and communications technology (ICT) sector has released its final draft of an empowerment charter for the industry - and says the charter will come into force in late 2005. The charter takes into account extensive input from the country's ICT community, and includes the much-anticipated targets for BEE in the sector. Agriculture BEE framework Agriculture Minister Thoko Didiza launched an empowerment framework for South Africa's agricultural industry in July 2004. The AgriBEE framework document addresses issues unique to agriculture, including land reform, seeking to deracialise land ownership and control in SA and to develop initiatives to help black South Africans to own, establish, or participate in agricultural enterprises. The framework proposes various targets, including 30% black ownership of agricultural land by 2014, as well as making a further 20% of agricultural land available to black people through leaseholds. "We also propose that an amount of land be made available for use by farm workers in order to address issues of poverty alleviation as well as creating opportunities for small, medium and micro enterprise development within this sector", the minister said. A steering committee will be set up to consult and share information about the framework, and to present a final report to the government by November 2004. Transport, construction, wine, tourism, health, cosmetics The Department of Trade and Industry says that charters on black economic empowerment in South Africa's transport, construction, and wine industries are due for completion by the end of 2004, while work has started on charters for other industries, including the health and cosmetics sectors. "We hope to have one overall charter for the health industry, which encompasses the pharmaceutical sector, care providers and retail", DTI director-general Lionel October said, adding that BEE in the health sector would seek to ensure expanded access to quality health care for both the public and private sectors. In May, Environmental Affairs and Tourism Minister Marthinus van Schalkwyk said his department would finalise its BEE scorecard for SA's tourism industry by the end of 2004. SouthAfrica.info reporter

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