%PM, %01 %659 %2015 %16:%May

Charters and Sector codes

Purpose of the Codes

Section 9 of the Broad-Based Black Economic Empowerment Act No. 53 of 2003 (BEE Act) legally provides for the issuing of Codes of Good Practice on broad-based black economic empowerment. Besides the dti's Strategy for Broad-Based Black Economic Empowerment and the BEE Act, drivers of transformation charter processes to date, have lacked a standard BEE framework from which to develop charters. Furthermore, some charters were developed even before the BEE Act and the Strategy document were released. Consequently, there exists substantial incomparability amongst charters, with respect to content as well as criteria for measurement. This results in entities in certain sectors with stricter measurement criteria being unfavourably disadvantaged when competing for business with entities in sectors with more lenient measurement criteria.

Status of Charters in Relation to the Codes

Transformation Charters may either be gazetted in terms of section 9 of the BEE Act, or in terms of section 12. Code 000 contained in the Codes of Good Practice includes a Statement on transformation charters as well as guidelines on the gazetting of charters.

A transformation charter gazetted in terms of section 9 of the Act means that the charter has been gazetted as a Code of Good Practice and that it therefore has the same status as the Codes. This effectively means that the charter becomes legally binding on organs of state and public entities.

A transformation charter gazetted in terms of section 12 of the Act expresses an industry's commitment to transformation but is not legally binding on organs of state and public entities.

In cases where transformation charters have not been gazetted as Codes, government will make use of the Codes of Good Practice as a means of BEE measurement

Sector Codes gazetted under Section 9(1):

If the majority of the measured entity's turnover is derived as a result of gazetted sector related activities, then the relevant sector code will apply to such measured entity.

Published in BEE Legislation
%AM, %30 %295 %2015 %08:%Apr

Vuyo Jack - Executive Chairman

Vuyo Jack grew up in Dube, Soweto where he toyed with the idea of becoming a film director, before a family friend in merchant banking changed his mind. He then decided to study accounting which he sees as a critical basis for informed economic decision-making, in the sense that it is the central measure of business performance. He holds a BCom from Wits University and is a chartered accountant. Since co-founding Empowerdex, Vuyo was appointed as a member of the dti's BEE Task Team in 2003 and has advised both government departments as well as various corporates on matters of BEE.

A director of various companies including the Public Investment Corporation, Vuyo was also appointed by the minister of finance as a commissioner on the Davis tax review committee. He was nominated as a Young Global Leader by the 2009 World Economic Forum. 

Published in Founders