Presentation on AgriBEE Charter
1
Agenda
Achieving Broad-based BEE Ownership
Statement 100
Consolidation of Economic Control through Management
Statement 200
2
AgriBEE - Ownership Scorecard
ELEMENT
Weighti
ng
Ownership
20%
Indicator
Category
Voting
Rights
Economic
Interest
Realisation
Points
Bonus
Points
Indicator
Indicator
Weighting
TARGET
Exercisable voting rights by black people
3 pnts
30%
Exercisable voting rights by black women
2 pnts
10%
Economic interest in the enterprise to which black people
are entitled
3 pnts
30%
Economic interest in the enterprise to which black women
are entitled
2 pnts
10%
Economic interest in the enterprise to which black
employees and workers are entitled
2 pnts
10%
Ownership fulfilment
1 pnt
No Restrictions
Net Equity Interest
Achieved accordingly:
10% of the Target (Year 1)
20% of the Target (Year 2)
40% of the Target (Year 3-4)
60% of the Target (Year 5-6)
80% of the Target (Year 7-8)
100% of the Target (Year 9-10)
7 pnts
30%
Involvement in the ownership of the Enterprise of black new
entrants; black Deemed Participants of Broad-Based
Ownership Schemes; or black Participants in Co-operatives
3 pnts
Bonus per each
level of 5%
Contribution to achieving more than 30% land transfer
5 pnts
Bonus point
per each
percentage of
land
transferred
above 30%
3
Agenda
Achieving Broad-based BEE Ownership
Statement 100
Consolidation of Economic Control through Management
Statement 200
4
Management Scorecard (Same as the BEE Codes)
Exercisable voting right by black people
3%
50%
Members of the Board who are black people
1%
50%
Members of the Board who are black women
1%
25%
Black Senior Executive Representation
Black Women Senior Executive
Representation
Black other executive representation
Black women representation as other
executives
Black independent director representation
(Bonus)
2%
1%
40%
20%
1%
1%
40%
20%
1%
40%
Allocation of Management Points
Maximum Achievable Points in the
Management Scorecard
12
10
Executive
Management
Representation
50%
Board
Representation
50%
8
6
4
2
0
Black Management (No
Black Women
Participation)
Total Management Score
Involvement of Black
Women Management
5
Agenda
Structure and Content: Phase 2
Human Resources Elements
(Statement 300~400)
Procurement, Enterprise development and Residual
(Statement 500~900)
Additional Statements on Ownership
(Statement 102~105)
Qualifying Small Enterprises
(Statement 1000~1700)
6
Employment Equity Scorecard (Same as BEE Codes)
Criteria
Weighting points
Compliance targets
Black people with disabilities employed by the Measured Entity as a percentage of
all full-time employees
2
4%
Black people employed by the Measured Entity at Senior Management level as a
percentage of employees at Senior Management level
2
60%
Black women employed by the Measured Entity at Senior Management level as a
percentage of employees at Senior Management level
2
30%
Black people employed by the Measured Entity at Professionally Qualified,
Experienced Specialists and Mid-management level as a percentage of
employees at Professionally Qualified, Experienced Specialists and Midmanagement level
2
75%
Black women employed by the Measured Entity at Professionally Qualified,
Experienced Specialists and Mid-management level as a percentage of
employees at Professionally Qualified, Experienced Specialists and Midmanagement level
1
40%
Black people employed by the Measured Entity at Skilled Technical and
Academically Qualified Workers, Junior Management, Supervisors, Foremen,
and Superintendents as a percentage of employees at Skilled Technical and
Academically Qualified Workers, Junior Management, Supervisors, Foremen,
and Superintendents level
1
80%
7
Employment Equity Scorecard Allocation
Junior
Management
10%
Black people with
Disabilities
20%
Middle
Management
30%
Senior
Management
40%
Criteria
Compliance
targets
80%
70%
Senior Management
60%
Senior Management (Black
Women)
30%
60%
50%
40%
Middle Management
75%
30%
Middle
Management
(Black Women)
40%
20%
10%
Junior Management
80%
0%
Senior
Management
Senior
Management
(Black Women)
Middle
Management
Middle
Management
(Black Women)
Junior
Management
8
AgriBEE - Skills Development Scorecard
Category
Skills Development Element
Weighting
points
Compliance
Target
Skills development spend on black employees as a percentage of
Leviable Amount. (85% of spend focused on core and critical skills as
defined by the relevant SETA).
6
2%
Skills development spend on black women as a percentage of Leviable
Amount (85% of spend focused on core and critical skills as defined by
the relevant SETA).
2
0.93%
Spend on black employees with disabilities as a percentage of Leviable
Amount
1
0.2%
Number of black employees participating in training programmes that
lead to recognised qualifications as percentage of total employees.
2
5%
Number of black women participating in training programmes that lead
to recognised qualifications as percentage of total employees
2
2.5%
Number of people who are members of Black Designated Groups
participating in training programmes that lead to recognised
qualifications as percentage of total employees (The score in this
element will be adjusted directly proportionate to the level of absorption
of the participants in training programmes in the measured enterprise
until a level of 80% absorption is attained)
1
1%
Skills Development
Recognised Training Programmes
9
AgriBEE - Skills Development Scorecard
(continues)
Category
Skills Development Element
Weighting
points
Compliance
Target
Existence of a comprehensive Black Economic Empowerment strategy
and which is being implemented
Yes
1
Employment of a Skills Development Facilitator
Yes
1
Existence of a policy on non-discrimination widely published within the
Enterprise
Yes
1
Compliance with all relevant employment related legislation
Yes
1
Implementation of an effective human resource management plan
Yes
1
Existence of a program designed to give practical effect to the stated
policies and programs
Yes
1
Support land reform beneficiaries and Black persons to create
sustainable business through the transfer of specialized skills in
Qualifying
mentorship
programmes
as accredited
by relevant
SETA
5
Organisational Transformational Index
Bonus
Points
qualifying mentorship programmes
authority
10
Other Skills Development Considerations
•
Direct training costs (which must represent at least 50% of all
such spend)
•
Indirect training costs (allowed but is limited)
•
Compliance with the skills development Act is a pre-requisite
•
Registration with the relevant SETA
11
Agenda
Structure and Content: Phase 2
Human Resources Elements
(Statement 300~400)
Procurement, Enterprise development and Residual
(Statement 500~700)
Additional Statements on Ownership
(Statement 102~105)
Qualifying Small Enterprises
(Statement 1000~1700)
12
Preferential Procurement Scorecard
(Same as BEE Codes)
Criteria
Weighting
points
Compliance
target
BEE Procurement Spend from all suppliers based on the BEE Procurement Recognition
Levels, QSE Recognition Levels or the Deemed Micro Enterprise Recognition
Levels (as the case may be) as a percentage of Total Measured Procurement
Spend
15
70%
BEE Procurement Spend from Qualifying Small Enterprises based on the QSE
Recognition Levels as a percentage of Total Measured Procurement Spend
4
15%
BEE Procurement Spend from Exempted Micro Enterprises based on the Deemed Micro
Enterprise Recognition Level as a percentage of Total Measured Procurement
Spend
1
5%
13
Statement 500 – Preferential Procurement
Cost of Sales
Operational Expenditure
Capital Expenditure
Total
Spend
Allowable Exclusions:
-Salaries
-Third party costs
-Loans and Donations
-Certain imports
-Rates & Taxes, levies
-Post retirement funding
-Medical aid contributions,etc.
-Imports accepted to a maximum
of 75%. (25% local content)
TOTAL MEASURED PROCUREMENT SPEND
BEE Spend
Non-BEE spend
14
AgriBEE - Enterprise Development
Scorecard
Criteria
Cumulative contribution to enterprise development as a percentage of Net
Profit After Tax measured from the commencement / Inception Date to the
Weighting Points
Compliance
Target
10
2%
date of measurement
Bonus Points: Contribution towards increased employment
Lease of 20% of land or capital assets on a long term basis to black persons
1
3
Lease longer than
10 years
15
AgriBEE – Rural Development, Poverty Alleviation
and Corporate Social Investment
Criteria
Weighting
Points
Compliance
Target
Cumulative rand value of non-recoverable qualifying
corporate social investment contributions as a
percentage of net profit after tax over five years
measured from the commencement date of this
statement or the Inception Date until the date of
measurement.
6%
1.5%
Land1 made available to farm dwellers for the purpose
of household use measured from the commencement
date of this statement or the Inception Date until the
date of measurement2.
(Making land available for farm workers shall not trigger
the application of the tenure rules for a period of 10
years. However this provision does not affect the ESTA
rights of the affected persons who have lawful claims on
the land)
4%
10%
Bonus point for qualifying residual contributions
benefiting black people in rural communities or
geographic areas identified by government
1The
1
land that is made available is the land not subject to the Land Tenure Act.
2Enterprises
that have fully contributed to the ownership element of the scorecard have an
option of only contributing to the CSI portion of this element which will then have a
corresponding 10 weighting points.
16
Agenda
Structure and Content: Phase 2
Human Resources Elements
(Statement 300~400)
Procurement, Enterprise development and Residual
(Statement 500~700)
Additional Statements on Ownership
(Statement 102~105)
Qualifying Small Enterprises
(Statement 1000~1700)
17
Framework for Measuring BEE in QSEs
Other
Companies
(Exceed
Revenue or
Employee limits)
Qualifying Small
Enterprises
(As per Statement 1000)
Generic Scorecard,
with all seven elements
(Statement 000~900)
QSEs can elect to implement
the entire QSE scorecard (with
enhanced recognition)
QSE Scorecard,
Select five of the seven elements
(Statement 1000~1700)
All elements weigh 20%
Indicators adapted to QSEs
Micro Enterprises
Micro Exemption,
Automatic Level 4
Recognition 18
Statement 1000 – Framework for QSE’s
Key Principles
Description
Implication
Qualifying Small
Enterprises (Definition)
Qualifying small enterprises classified
according to the National Small Business Act,
based on turnover and employee number
• The qualification criteria for QSEs differs across
sector
• A table provided for classification of QSEs by
turnover and employee number
Exemption of Micro
Enterprises
Micro Enterprises with annual revenue below
VAT registration exempted from the Codes
• Automatic Level 4 recognition for MicroEnterprises
• Companies are not penalized for buying from
exempted micro enterprises
AgriBEE – Enterprise with an annual
turnover less than R1.5m. (To be finalised
once research is concluded)
Application of the QSE
Scorecard
Allows QSEs to apply the entire QSE
scorecard
QSE scorecard allows company to elect five
out of seven BEE factors for BEE scoring
purposes.
•QSEs can present a BEE score comprising five
out of the seven BEE elements
•QSEs can also elect to apply entire scorecard
(enhanced recognition)
•QSEs can potentially score 100 points without
BEE ownership
AgriBEE: (To be finalised once research is
concluded)
•less than R20 million in primary agriculture;
•less than R30 million in beneficiation of
agricultural products; and
•less than R30 million, service provision to the
agricultural sector.
Bonus Provisions
(Enhanced recognition)
Different Bonus provision for QSEs where
black ownership exceeds 20 points and where
QSEs use all seven elements of the
scorecard
•Provide additional recognition for black owned
QSEs
• Encourage B-BBEE initiatives by QSEs 19
Qualifying
Small
Enterprises
20,000
15,000
Exempted Micro
Enterprises
10,000
Annual Revenue
QSE Identification and Classification Table
30,000
25,000
5,000
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20
QSE Upper Limit
QSE Lower Limit
Micro
Ownership and Management for QSEs
BEE Elements
Ownership
Code Ref.
BEE 1100
Weighting
20%
Indicators
Indicator
Weighting
Compliance target
Exercisable Voting Rights by black
people
5%
30%
Economic Interest in the Enterprise to
which Black people are entitled
7%
30%
Ownership Fulfillment
1%
No restrictions
Net Equity Value
7%
10% - 100% staggered over
a 10 year period
Bonus Points:
Involvement in the ownership of the
Enterprise of:
-Black Women and/or
-Black Employees/Workers
3%
15%
Contribution to achieving over 30%
5%
land transfer
Bonus point per each
percentage of land
transferred above 30%
Management
Control
(Same as
Codes)
BEE 1200
20%
Black representation at OwnerManager level;
20%
Bonus Points: Black Women
representation at Owner-Manager
2%
25,1% Owner-Manager
Representation,
BEE
10%
21
Employment Equity for QSEs
BEE Elements
Employment Equity
Code
Ref.
BEE
1300
Weighting
20%
Indicators
Indicator
Weighting
Compliance target
Black representation at ManagerController level
6%
40%
Black women representation at
Manager-Controller level
6%
20%
Black employees as a percentage of
total employees
4%
70%
Black women as a percentage of
total employees
4%
35%
(Same as BEE Codes)
22
AgriBEE - Skills Development for QSEs
BEE Elements
Skills Development
Code
Ref.
BEE
1400
Weighting
Indicators
Indicator
Weighting
Compliance target
20%
Employee enrollment/ involvement in
Recognised Training Programmes
5%
Yes
Skills development spend on black
employees in addition to Skills
Development Levy (except where the
enterprise is exempted from
payment of the skills development
levy) as a percentage of the Leviable
Amount (or as a percentage of total
annual payroll, for entities exempted
from the skills development levy).
15%
1%
Bonus Points - Support land
reform beneficiaries and Black
persons to create sustainable
business through the transfer of
specialized skills in qualifying
mentorship programmes
5%
Qualifying mentorship
programmes as
accredited by relevant
SETA authority
23
Preferential Procurement, Enterprise
Development and Residual for QSEs
BEE Elements
Preferential
Procurement
(Same
Codes)
as
Code
Ref.
BEE
1500
BEE
Weighting
20%
Indicators
BEE Procurement Spend from Suppliers
based on the BEE Procurement
Recognition Levels or Deemed Micro
Enterprise Recognition Levels as a
percentage of Total Measured
Procurement Spend
Indicator
Weighting
Compliance target
20%
50%
24
AgriBEE - Enterprise Development and
Rural Development for QSEs
BEE Elements
Code
Ref.
Enterprise
Development
BEE
1600
Weighting
Indicators
Indicator
Weighting
Compliance target
20%
Enterprise development contributions made
by the Qualifying Small Enterprise as a
percentage of Net Profit After Tax
20%
2%
Bonus Points - Lease of 20% land or
capital assets on a long term basis to
3%
Lease longer than 10
years
black persons
Rural Development
BEE
1700
20%
Qualifying residual contributions made
by the QSE measured as a percentage
of net profit after tax, made to corporate
social investments and/or industry
specific contributions measured from
the commencement date of this
statement or the Inception Date until the
date of measurement.
1Land
made available to farm workers
measured from the commencement date
of this statement or the Inception Date
until the date of measurement2.
1The
12%
2%
8%
10%
land that is made available is the land not subject to the Land Tenure Act.
2Enterprises
that have fully complied with the ownership scorecard have an option of only
contributing to the CSI portion of this element which will then have a corresponding 10
weighting points.
25
The Road Ahead
20 Dec 2005: Release of First Draft 2nd Phase
31 March 2006: Deadline for Submissions
March/April 2006: Review of Submissions
May/Sept 2006: Development of Final Draft
November/December 2006
Promulgation of Phases 1 and 2
26