road freight charter: b-bbee scorecard
TRANSCRIPT
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ROAD FREIGHT CHARTER B-BBEE SCORECARD
Presenter: Sibongile Zikalala
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AMENDED B-BBEE CODES
PRESENTATION OUTLINE
1. OBJECTIVES OF THE SECTOR CODES
2. PRINCIPLE CHANGES ON AMENDED B-BBEE CODES
3. PROPOSED ROAD FREIGHT GENERIC CHARTER SCORECARD
4. PROPOSED QUALIFYING SMALL ENTERPRISE SCORECARD
5. IMPLEMENTATION AND MONITORING
6. CONCLUSION – THE IMPACT ON BUSINESS
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OBJECTIVES OF THE ROAD FREIGHT TRANSPORT SECTOR CODES
• To advance the objectives of the B-BBEE Amendment Act No. 56 of
2013;
• To constitute a Framework and Establish the Principles upon which
B-BBEE will be implemented in the Road Freight Transport Sector;
• To create Economic growth through Ownership, Management Control,
Enterprise and Supplier Development in the Road Freight Transport
Sector;
• To ensure the Entry of women, Youth and people living in Rural
areas at all levels of the industry so as to break the stranglehold of the
industry by urban-based males;
• To provide the basis for the Sector’s engagement with other
Stakeholders including Government and Labour.
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PRINCIPLE CHANGES ON THE AMENDED B-BBEE CODES
B-BBEE COMPLIANCE
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AMENDED CODES PRINCIPLE CHANGES
REAL JOB CREATIONSupply chain diversificationGrowth in EME/QSE ExpenditureGrowth in 51% Black Owned Supplier Import ReplacementSupplier Development
SOCIO ECONOMIC DEVELOPMENTIncome generating ActivitiesSupporting future employees
B-BBEE CHANGESEmpowering Supplier StatusAmended ScorecardsAdjusted Recognition TableLevel Discounting
FAIR PEOPLE APPROACHEconomically Active Population (EAP)EE Act alignment and strengthening
OPEN SKILLS DEVELOPMENTIncreased targetIncreased incentive for disabilityTraining non employees is recognisedAbsorption incentives
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AMENDED SCORECARD SUMMARY
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B-BBEE RECOGNITION TABLE
• Automatic drop two levels down
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B-BBEE PRIORITY ELEMENTS
• Ownership
– The sub-minimum requirement for ownership is 40% of Net value (40%
of the 8 points) based on the Time based graduation Factor provided.• Skills Development
– The sub-minimum requirement for Skills Development is 40% of the
Total weighting points for Skills Development.
• Enterprise and Supplier Development
– The sub-minimum requirement for Enterprise and Supplier
Development is 40% for each of the three categories, within the
Enterprise and Supplier Development element, namely Preferential
procurement; Supplier development and Enterprise Development.
– If the scorecard fails to meet any of these sub-minimum targets the acquired level will be discounted one level down.
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“EMPOWERING SUPPLIER STATUS”
• Good citizen South African entity; – Complies with all regulatory requirementsMeet at least 3 of the following criteria;
1) At least 25% of costs of sales excluding labour costs and depreciation
must be procured from local producers or local supplier in SA. Labour costs
for the service industry is capped at 15%.
2) 50% of jobs created are for Black people provided that the number of
Black employees since the immediate prior verified B-BBEE Measurement is
maintained.
3) At least 25% transformation of raw material/beneficiation which
include local manufacturing, production and/or assembly, and/or packaging.
4) At least spend 12 days per annum of productivity deployed in assisting
Black EMEs and QSEs beneficiaries to increase their operation or financial
capacity.
5) At least 85% of labour costs should be paid to South African employees by
the Service Industry entities.
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ROAD FREIGHT SUB-SECTOR SCORECARD PROPOSAL
B-BBEE COMPLIANCE
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EQUITY OWNERSHIP
Indicators Charter Points
Charter Targets
Generic Points
Generic Targets
Voting Rights
In the hands of Black people 4 25% + 1 vote
4 25% + 1 vote
In the hands of Black Women 2 10% 2 10%
Economic Interest
In the hands of Black people 4 25% 4 25%
In the hands of Black Women 2 10% 2 10%
Black Economic interest in •Black designated groups•Participation in ESOP•Participation in BBOS•Participation in Co-operatives
3 3% 3 3%
Black new Entrants 4 15% 2 2%
Realisation points
Net Value/Net Economic Interest 8 10 year target
Graduation formula
8 10 year target
graduation formula
TOTAL POINTS 27 25
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MANAGEMENT CONTROL
Indicators Charter Points
Charter Targets
Generic Points
Generic Targets
Board Participation
% Voting rights of Black people 2 50% 2 50%
% Voting rights of Black Women 1 25% 1 25%
% Black Executive Directors 2 50% 2 50%
% Black Women Executive Directors 1 25% 1 25%
Other Executive Management
% Black Executive Management 2 60% 2 60%
% Black Women Executive Management 1 30% 1 30%
Senior Management - EAP Applicable
% Black employees for all SM 2 60% 2 60%
% Black woman employees for all SM 1 30% 1 30%
SUB-TOTAL POINTS 12 12
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MANAGEMENT CONTROL CONT.
Indicators Charter Points
Charter Targets
Generic Points
Generic Targets
Middle Management – EAP Applicable
% Black employees for all MM 2 75% 2 75%
% Black woman employees for all MM 1 38% 1 38%
Junior Management – EAP Applicable
% Black employees for all SM 2 88% 1 88%
% Black woman employees for all SM 1 44% 1 44%
Youth Employees – EAP Applicable
Youth in technical/professional positions 2 15% N/A
Operational staff – EAP Applicable
Black women % in Semi & unskilled levels 2 15% N/A
Employees with disability
% Black employees for all office staff 2 2% 2 2%
% Black woman employees for all office staff
1 1% N/A
TOTAL POINTS 25 19
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SKILLS DEVELOPMENT
Indicators Charter Points
Charter Targets
Generic Points
Generic Targets
Skills Development Expenditure on programme specified in the Learning Programmes Matrix
Skills Development Expenditure on Black people as a % of the Leviable amount
8 6% 8 6%
Skills Development Expenditure on Black disabled employees as a % of the Leviable Amount
5 0.50% 4 0.30
Learnerships, Apprenticeships and Internships
Number of Black people participating on learnerships, apprenticeships, and internships and training specified in the learning programme matrix as a % of total employees
4 2.5% 4 2.5%
Number of Black unemployed participating on learnerships, apprenticeships, and internships and training specified in the learning programme matrix as a % of total employees
4 2.5% 4 2.5%
Bonus Points
Number of black people absorbed by the measured entity at the end of Learnership programme
5 100% 5 100%
TOTAL POINTS 21 20
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ENTERPRISE AND SUPPLIER DEVELOPMENT
Indicators Charter Points
Charter Targets
Generic Points
Generic Targets
Preferential Procurement as a percentage of the Total Measured procurement spend
Procurement spend from all Empowering suppliers based on their Procurement Recognition Level.
5 80% 5 80%
Procurement spend from all Empowering suppliers that are Qualifying Small Enterprises.
3 15% 3 15%
Procurement spend from all that are Exempted Micro Enterprises
4 15% 4 15%
Procurement spend from all Empowering suppliers that are 51% black owned.
9 40% 9 40%
Procurement spend from all Empowering suppliers that are 30% black woman owned.
4 12% 4 12%
Bonus Points
Procurement spend from designated group Suppliers that are 51% black owned.
2 2% 2 2%
SUB- TOTAL POINTS 25 25
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ENTERPRISE AND SUPPLIER DEVELOPMENT
Indicators Charter Points
Charter Targets
Generic Points
Generic Targets
Supplier Development
Annual value of all Supplier Development Contributions made by the measured entity as a percentage of the target
10 2% of NPAT 10 2% of NPAT
Enterprise Development
Annual value of Enterprise Development Contributions and Sector Specific programmes made by the Measured entity as a percentage of the target
5 1% of NPAT 5 1% of NPAT
Bonus Points
For the graduation of one or more Enterprise Development beneficiaries to the Supplier Development Level
1 1
For creating one or more jobs directly as a result of Supplier Development and Enterprise Development initiatives
1 1
TOTAL POINTS 40 40
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SOCIO-ECONOMIC DEVELOPMENT
Indicators Charter points
Charter targets
Generic points
Generic targets
Socio economic development initiatives – % of NPAT
Annual value of Socio Economic Development contributions made by the Measured entity.
10 1.5% of NPAT 5 1% of NPAT
• List of projects for Enhanced Recognition points:
• Carbon Offset projects - Accredited green programmes (Trees for
Africa)
• Wellness programmes – Bargaining Council Wellness and Community
Clinics
• Research & Development projects - Fatigue management by DoT or
MEC
• Road Safety projects – Captain Safety, National Prayer day by DoT
• NSEWA Road Safety Learning Network – Enhancing driver skills and
health
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ROAD FREIGHT GENERIC SCORECARD SUMMARY
• OWNERSHIP– No changes compared to the Generic Scorecard
• MANAGEMENT CONTROL– Additional points for Junior Management, – Additional sub-elements for Youth Employees and Operational female
employees,– The exclusion of Drivers in the calculation for Disabled employees,
• SKILLS DEVELOPMENT– 1% Skills Development Levy is included for the Transport Charter Industry
only.– List of Mandatory training has been submitted with reasons for inclusion.
• ENTERPRISE AND SUPPLIER DEVELOPMENT– List of Procurement exclusions from 51% Black owned companies submitted
to the Department of Transport for consideration at 100% on: Fuel, Oil, Maintenance Spares, Banks, Tyres, Insurance, Vehicles and Trailers.
• SOCIO-ECONOMIC DEVELOPMEMT– List of Enhanced recognition projects has been submitted for approval.
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DRAFT ROAD FREIGHT QSE SCORECARD
B-BBEE COMPLIANCE
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Micro Enterprises Exemption and Classification
• Exempted Micro Enterprises (EME) – R0 to R10m– 75% black beneficiaries qualifies for Level one Contributor, B-BBEE Recognition Level of 135%– 51% black beneficiaries qualifies for Level two contributor, B-BBEE Recognition Level of 125%
• Qualifying Small Enterprises (QSE) – R10m to R50m– 75% black beneficiaries qualifies for Level one Contributor, B-BBEE Recognition Level of 135%– 51% black beneficiaries qualifies for Level two contributor, B-BBEE Recognition Level of 125%
• Both 51% black owned QSEs and EMEs to obtain a Sworn Affidavit annually confirming their Total Revenue/Allocated Budget/Gross receipts of R50 million or less, and the Level of black percentage of beneficiaries.
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QSE SCORECARD SUMMARY
ELEMENTS 2007 2013
BEE Scorecard Points Bonus Points Bonus
Ownership 25 3 25 0
Management Control 25 4 15 0
Skills Development 25 0 25 5
Enterprise and Supplier Development
25 0 30 3
Socio-economic Development
25 0 5 0
TOTAL 100 7 100 8
• 40% minimum threshold is applicable on three critical elements
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EQUITY OWNERSHIP
Indicators Charter Points
Charter Targets
QSE Points
QSE Targets
Voting Rights
In the hands of Black people 5 25% + 1 vote
5 25% + 1 vote
In the hands of Black Women 2 10% 2 10%
Economic Interest
In the hands of Black people 5 25% 5 25%
In the hands of Black Women 2 10% 2 10%
Black new Entrants or black designated groups
3 2% 3 2%
Realisation points
Net Value/Net Economic Interest 8 10 year target
Graduation formula
8 10 year target
graduation formula
TOTAL POINTS 25 25
• No change
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MANAGEMENT CONTROL
Indicators Charter Points
Charter Targets
QSE Points
QSE Targets
Executive Management
% Black Executive Management 5 50% 5 50%
% Black Female Executive Management 2 25% 2 25%
Senior, Middle and Junior Management
% Black representation at Senior, Middle and Junior Management.
6 60% 6 60%
% Black female representative at Senior, Middle and Junior Management.
2 30% 2 30%
Youth Employees
Youth in technical/professional positions
2 10% N/A
SUB-TOTAL POINTS 17 12
• The EAP Calculation is not applicable for the QSE scorecard
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SKILLS DEVELOPMENT
Indicators Charter Points
Charter Targets
QSE Points
QSE Targets
Skills Development Expenditure
Skills Development Expenditure on Learning programmes specified in the Learning Programmes Matrix for Black people as a % of the Leviable amount
20 3% 15 3%
Skills Development Expenditure on Learning programmes specified in the Learning Programmes Matrix for Black females as a % of the Leviable Amount
5 1% 7 1
Skills Development Expenditure on Learning programmes specified in the Learning Programmes Matrix for Black people with disabilities as a % of the Leviable Amount
N/A3 0.15
Bonus Points
Number of black people absorbed by the measured entity at the end of Learnership programme
N/A5 100%
TOTAL POINTS 25 25
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ENTERPRISE AND SUPPLIER DEVELOPMENT
Indicators Charter Points
Charter Targets
QSE Points
QSETargets
Preferential Procurement as a percentage of the Total Measured procurement spend
Procurement spend from all Empowering suppliers based on their B-BBEE Procurement Recognition Levels.
15 60% 15 60%
Procurement spend from all Empowering suppliers that are at least 51% black owned based on their B-BBEE Procurement Recognition Levels.
5 40% 5 15%
Bonus Points
B-BBEE Procurement spend from Designated Group Suppliers that are at least 51% black owned based on the B-BBEE Procurement Recognition Levels
N/A 1 1%
SUB- TOTAL POINTS 20 20
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ENTERPRISE AND SUPPLIER DEVELOPMENT
Indicators Charter Points
Charter Targets
QSE Points
QSETargets
Supplier Development
Annual value of all Supplier Development Contributions made by the measured entity as a percentage of the target.
5 1% of NPAT 5 1% of NPAT
Enterprise Development
Annual value of Enterprise Development Contributions and Sector Specific programmes made by the Measured entity as a percentage of the target
5 1% of NPAT 5 1% of NPAT
Bonus Points
For the graduation of one or more Enterprise Development beneficiaries to the Supplier Development Level
N/A 1
For creating one or more jobs directly as a result of Supplier Development and Enterprise Development initiatives
N/A 1
SUB- TOTAL POINTS 30 30
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SOCIO-ECONOMIC DEVELOPMENT
Indicators Charter points
Charter targets
Generic points
Generic targets
Socio economic development initiatives – % of NPAT
Annual value of Socio Economic Development contributions made by the Measured entity.
5 1% of NPAT 5 1% of NPAT
TOTAL POINTS 5 5
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IMPLEMENTATION AND MONITORING
• Transport Sector B-BBEE Charter Council
– An independent body with a mandate to oversee the implementation of the Charter.
– Conduct reviews and take decisions in consultation with Stakeholders per sub-sector around the targets that will be applied from the effective date
– Undertake a comprehensive mid-term review in 2,5 years and make decisions regarding the implementation of the Charter.
– Appoint an Executive to receive, consider and approve annual audits from each measured entities within the sub-sector charter.
– Prepare an annual review which outlines progress and evaluates new areas of intervention.
– Submit the annual review to the BEE Advisory Council for publication.
The association does not believe that the industry should fund the Council but entities are allowed to voluntary contribute.
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IN CONCLUSION
• The DTI issued a statement in May 2015 indicating the following;
– The Transitional period for the alignment of the Sector Codes is extended to the end of October 2015.
– All valid B-BBEE Certificates issued under the Old Codes of Good Practice gazette No 29617, as well as the relevant Sector Codes should remain valid, be accepted and treated as “Empowering Suppliers”.
– The statement on Black participants in Broad-Based Ownership Schemes and Employee Share Ownership Programmes has been withdrawn by the DTI until further notice.
– Introduced a 5th criteria for the Empowering Supplier Status
• The Proposed Draft Scorecard will be presented to the Minister for approval before submitting to the DoT for the gazetting process.
• We urge companies to make use of the extended period to prepare for compliance with the new codes.
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The End