Broad-Based Black Economic Empowerment Act, 2003 (Act No. 53 of 2003)

Codes of Good Practice on Broad-Based Black Economic Empowerment

Property Sector Charter

15. Economic Development
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(15.1)There is a lack of investment and property development in underresourced areas, perpetuating service inequalities and exacerbating the limited tradability of properties in these areas.

 

(15.2)The parties to the charter acknowledge their role in directing investment into under-resourced areas. Consequently, property enterprises will participate in property development and transformational infrastructure projects that support development, and empowerment of micro and small enterprises and contribute towards equitable access to economic resources in under-resourced areas.

 

(15.3)An enterprise that engages in property development commits to spend 10% of its total new property development in under-resourced areas (Transformational Infrastructure as referred to in the Financial Sector Charter (FSC)) over a five-year period in under-resourced areas. Regarding timing (cumulative vs. annual refer to the principle as defined in the Codes of Good Practice.

 

(15.4)There has been limited support by the sector of entrepreneurial development and both public and private sector disposal strategies have in general inadequately incorporated B-BBEE objectives

 

(15.5)The sector commits to utilise property disposals to increase property ownership amongst black people and to contribute towards the growth of sustainable enterprises. In pursuit of this commitment, when an enterprise engages in the above activity in the sector, it commits to target 35% of disposals to Level One (1) to Level Three (3) B-BBEE enterprises which are black owned over a five year period from the effective date of this charter. The enterprises should be independent from the Measured Entity and the disposed assets must result in the creation of sustainable businesses or business opportunities in the hands of black people as well as the transfer of specialised skills or productive capacity to black people. A sale of fixed property as contemplated in paragraph 15.5 may not be simultaneously counted towards the ownership score, regardless of the fact that an actual business unit may have been sold.

 

PROPERTY CODE: ECONOMIC DEVELOPMENT SCORECARD

 

CRITERIA

WEIGHTING POINTS

COMPLIANCE TARGET

Disposal of assets to B-BBEE enterprise (Level 1-3) as a % of total asset disposal (private) which are black owned

8

35%

Development Investment in under-resourced areas as a % of total annual investment

7

10%

 

(15.6)As part of the process, the parties will design appropriate risk mitigating measures and risk sharing arrangements with Government and its development finance institutions and the Financial Sector Charter Council.

 

(15.7)National, provincial and local government will identify property for development purposes in line with integrated development plans and combine zoning rights with development requirements.

 

(15.8)Noting that not all property sector enterprises participate in investment, the charter council will, within one year, formulate mechanisms to measure the participation and contribution of all property sector enterprises in development.