Broad-Based Black Economic Empowerment Act, 2003 (Act No. 53 of 2003)Industry ChartersConstruction Sector CharterCode Series 2000Code Series 2000 : Framework for Measuring Broad-Based Black Economic Empowerment in the Construction SectorStatement 2000 : General Principles |
| 1) | Objective |
| a) | To specify the basic principles upon which Code 2000 has been premised. |
| 2) | Key Principles |
| a) | Code 2000 is based upon Code 000, Statement 000 published in the Government Gazette No 29617. |
| b) | Code 2000 to 2800 identifies the basic principles, definitions and methodologies adopted in the Construction Sector only where these principles, definitions and methodologies differ from the Code 000 to Code 800 as published in the Government Gazette No 29617. |
| c) | The differences stipulated in Code 2000 to 2800 are to be read in conjunction with and where there is any conflict take precedence to the clauses in Code 000 to Code 800 as published in the Government Gazette No 29617. |
| d) | There are no bonus points applicable in Code 2000-2800. |
| 3) | Application of the Codes |
| a) | Any measured entity which conducts any construction-related activities, must determine what percentage of its annual turnover is derived from construction activities; |
| b) | If the majority of the measured entities turnover is derived as a result of construction related activities, then the Charter will apply to such measured entity; |
| c) | If a measured entity does not derive the majority of its turnover from the construction sector, then the Charter will not apply to such measured entity and the measured entity will be governed by any other sector code which may be applicable, failing which the generic DTI Codes will apply; |
| d) | In the event that a measured entity derives an equal percentage of its turnover from construction related activities as well as other industry-related activities, then such measured entity will have the choice as to which sector code will apply. |
| 4) | Eligibility as an Exempted Micro Enterprise and Qualifying Small Enterprise |
| a) | Code 2000 complies with the principles and methodology in Code 000 unless specifically stated in table below. |
Scorecard Types: |
Exempted Micro Enterprise |
Qualifying Small Enterprise |
Generic Construction |
Discipline |
Parameters are based on annual turnover of the Measured Entity |
||
Contractor |
0 - 5 million Rand |
Larger than 5 million and equal to or less than 35 million Rand |
Larger than R35 million Rand |
BEP |
0 - 1.5 million Rand |
Larger than 1.5 million and equal to or less than R11.5 million Rand |
Larger than R11.5 million |
| b) | An Exempted Micro Enterprise (EME) will qualify for recognition as indicated in the DTI Codes, Statement 000, page 9. |
| c) | A Qualifying Small Enterprise must select any four of the seven Elements of B-BBEE for the purpose of measurement under the Qualifying Small Enterprise Scorecard contained in Code 2800. |
| d) | In the Generic Construction Scorecard all elements will be applicable for measurement. |
5) The Generic Construction Scorecard Element Weightings
Element |
Weighting |
Code Series Reference |
|
Contractors |
Built Environment Professionals |
||
Ownership |
25 |
25 |
2100 |
Management Control |
10 |
10 |
2200 |
Employment Equity |
10 |
10 |
2300 |
Skills Development |
15 |
20 |
2400 |
Preferential Procurement |
20 |
20 |
2500 |
Enterprise Development |
15 |
10 |
2600 |
Socio-Economic Development Initiatives |
5 |
5 |
2700 |
| 6) | Duration of the Codes |
| a) | The Minister will review Code 2000 to 2800 following the end of the seventh year following the commencement date of this statement; despite the aforementioned, annual reviews commissioned by the Construction Charter Council (hereafter referred to as the Charter Council) will take place to monitor the implementation of B-BBEE throughout the sector. |
| 7) | Construction Sector commitments related to Code 2000 to 2800 is captured in the Construction Sector Charter published in Government Gazette No. 29616, paragraph 5.1 to 5.7. Where any of the principles contained in the Construction Sector Charter deviate from Code 2000-2800 this Code must be applied. |
| 8) | The Scoring of Unincorporated Joint Ventures |
| a) | In respect of an unincorporated joint venture, being a joint venture between two or more measured entities, which is not constituted in the form of an incorporated juristic person, a consolidated verification certificate must be submitted. A consolidated verification certificate will consolidate compliance data in respect of all the elements in the construction scorecard of the parties entering into an unincorporated joint venture on a single verification certificate as if those measured entities were a single measured entity. |
| b) | The consolidation of compliance data shall be based on a weighting in accordance with the shareholder agreement relevant to the specific joint venture. Hence should two companies enter into an unincorporated joint venture their respective scores in terms of the construction charter will be weighed according to their level of shareholding in the joint venture and added together for a combined score out of 100. |
| c) | Should a company qualify in terms of the Qualifying Small Enterprise Scorecard its BEE compliance level (a figure out of 100) must be used to calculate the consolidated score. |
| d) | An EME with a Black shareholding of 50% or less will qualify for a score of 70 and an EME of a Black share holding of more than 50% will qualify for a score of 80. |
| 9) | In its entirety Code 2000-2800 pertains to South African operations. |
| 10) | The Transitional Phase is applicable to Code 2000 for the first year after the commencement of Statement 2000 on the same calculation principle articulated in paragraph 11 (Code 000, P12), though the calculation will be: A = B x 1.65. |
| 11) | Any sector specific programmes applicable to Code 2600, 2700, 2806 and 2807 will be published by the Charter Council. |
| 12) | Code 2000-2800 distinguishes in certain instances between Built Environment Professionals (BEP) and Contractors in respect of targets, weightings and methodology. The application of these differences is not interchangeable between these disciplines. |