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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

The son of Taiwanese entrepreneurs, Chia-Chao moved to SA in 1985. He has been instrumental in the evolution of Empowerdex from a ratings verification agency into a fully-fledged research and advisory firm. He started the influential Most Empowered Companies Survey in 2002, then in partnership with the Financial Mail and now with Business Report.

Chia-Chao formed part of the Empowerdex consortium which analysed the progress of BEE within the ICT industry, on behalf of the Department of Communications. In 2004, he was appointed by the Department of Environmental Affairs and Tourism to support the Tourism Charter's Steering Committee in the development of the Tourism BEE Charter. Chia-Chao holds a MCom in corporate finance from Wits University. He is a Chartered Accountant and holds the Chartered Financial Analyst designation.

Published in Founders
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BEE Legislation

With the Broad-Based Black Economic Empowerment as the framework, various other pieces of legislation shape the implementation and measurement of Broad-Based Black Economic Empowerment. These include the amended Codes of Good Practice, Charters and Sector Codes, Qualifying Small Enterprises, Generics, the Codes Process and the dti’s framework for Broad-Based BEE. Please find below a list of currently gazetted codes and new draft sector codes. 

Verification Manual: 1-15, 16-27, 28-32, 33-38, 39-5455-80

Published in Site Content
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