TRANSFORMATION TRENDS IN THE CONSTRUCTION SECTOR 30 July 2014 Thabo Masombuka Chief Executive Officer (CE0) CSCC BBBEE AS AN INSTRUMENT FOR ECONOMIC EMPOWERMENT BBBEE DEFINED “An integrated and coherent socio-economic process….which aims to redress past imbalances by transferring and conferring ownership, management and control of South Africa’s financial and economic resources to the majority of its citizens and ensure broader participation of black people in the economy in order to achieve sustainable development and prosperity” – BBBEE Strategy document THE GAZETTING OF THE CONSTRUCTION SECTOR CODE (CSC) The BBBEE STRATEGY promotes PARTNERSHIP & INDUSTRY ACTIVISM to foster economic transformation objectives. Hence the Construction Sector Code was gazetted in June 2009 to achieve the following strategic objectives : • The inclusion of BLACK PEOPLE in general and BLACK WOMEN in the OWNERSHIP and MANAGEMENT of construction companies and businesses. • The acceleration of TECHNICAL SKILLS and CAPACITY OF BLACK YOUTH and PEOPLE WITH DISABILITY. • To provide JOBS and EMPLOYMENT OPPORTUNITIES. • Building the ENTREPENEURIAL CAPACITY and SUSTAINABILITY of BLACK enterprises in the construction sector. THE ROLE OF THE CSCC • The CSCC is the EXECUTIVE AUTHORITY : • Entrusted with OVERSEEING and MONITORING the IMPLEMENTATION of the Construction Sector Codes (CSC) of Good Practice by the Industry. • Through industry programmes, responsible for the FACILITATION of the achievements of sector empowerment TARGETS. • ALIGNMENT of Construction Charter with existing legislation • Provide necessary GUIDANCE & BEST PRACTICE NOTES on the interpretation of the principles of the Construction Sector Code. • LIAISON with and reporting to the regulatory stakeholders on the annual measurement of the construction sector code - BBBEE Advisory, DPW and the DTI . • Creation of RELIABLE and ACCURATE industry specific empowerment data BASELINE METHODOLOGY The CSCC actively pursued the submission of industry BBBEE verified scorecards within the construction sector, including Contractors and BEPs. Over 1770 (about 14% of the sample) of the 13500 commercially active companies were scoped. This actively included the interpretation of 3530 BBBEE certificates Commissioned the services of independent service providers to : OVERVIEW: INDUSTRY TRANSFORMATION: ALL SECTORS Number of Scorecards that achieve relevant Level Contributor Status 500 438 409 450 Number of Scorecards 400 350 300 256 239 250 169 146 150 124 95 100 50 182 179 200 71 29 68 64 43 38 18 51 59 43 15 51 29 11 6 17 23 11 5 16 15 5 8 6 17 0 Level 1 Level 2 Level 3 Level 4 2009 Level 5 2010 2011 2012 Level 6 Level 7 Level 8 Non-compliant 2013 Upward Trend: 64% in 2009 to 85% in 2013 Level 4 and above OVERVIEW: INDUSTRY TRANSFORMATION: EMES Detail Summary of level status: EME Entities-Total Number of Scorecards 350 319 300 234 250 200 150 100 50 112 95 75 43 30 23 53 74 0 Level 3 Level 4 2009 2010 2011 2012 2013 High Contributor to overall Industry Transformation above Level 4: 55% contribution in 2009 and 45% in 2013 OVERVIEW: INDUSTRY TRANSFORMATION: LARGE ENTERPRISES Detail Summary of level status: Large Enterprises-Total 100 91 Number of Scorecards 90 80 71 70 54 60 58 53 56 51 46 50 40 34 40 30 23 20 10 2 6 34 23 19 38 23 12 9 8 35 16 33 21 21 7 2 4 6 4 10 8 5 12 12 2 3 4 3 0 Level 1 Level 2 Level 3 Level 4 Level 5 Level 6 Level 7 Level 8 Non-compliant 2009 2010 2011 2012 2013 Upward Trend: 38% in 2009 to 65% in 2013 Level 4 and above (60% in 2012) TRANSFORMATION TRENDS: LARGE CONTRACTORS Average performance per Element: Contractor Large Enterprises 90% Average Element score 80% 70% 60% 50% 40% 30% 20% 10% 0% Average Average Average SocioAverage Ownership Average Average Skills Average Enterprise Employment Equity Preferential economic Score Management Score Development score Development score score Procurement score Development score 2009 50% 42% 44% 46% 70% 71% 75% 2010 45% 52% 53% 48% 75% 60% 77% 2011 56% 50% 57% 48% 82% 64% 83% 2012 58% 53% 55% 46% 81% 65% 82% 2013 55% 60% 59% 50% 82% 70% 85% WHERE TO FIND US The CSCC is based at : 164 Katherine Drive Pinmill Farm Office Park Ground Floor – G Block Sandton, Johannesburg TEL : (011) 262 4644/5/6 www.cscc.org.za