AgriBEE INDABA6 Dec 2005

AgriBEE INDABA6 Dec 2005

Proposal for an AgriBEE Charter

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IndexIndex

5 Stages of AgriBEE process Where are we in recommended process Section 12 and 9 Charters/Codes Structure of draft AgriBEE Charter Tasks for Breakaway Sessions

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5 Stage Process5 Stage Process

Aug 2002 - driven by the Reference Group July 2004 - AgriBEE Framework launched by Minister Oct 2005 - Draft AgriBEE Charter recommended to Minister Indaba 6,7 Dec Follow up

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AgriBEE Framework processAgriBEE Framework process

Wide publicity, including provincial launches An AgriBEE Steering Committee (SC) appointed to consult

stakeholders, lead key strategic approaches and report Public comments received until Dec 2004 The SC undertook consultations, as mandated The dti released BBBEE Codes of Good Practice (CGP) in

June 2005 The SC engaged with CGP directives and utilised them in the

development of its recommendations SC presented draft AgriBEE Charter and large-scale

scorecard to Minister 28 Oct 2005

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AgriBEE Framework processAgriBEE Framework process

Commentary process transparent with 55 written inputs received

Consultation process inclusive, broad, including organised agriculture, labour, youth, women and provinces

AgriBEE Framework is accepted in principle Charter should be aligned with the CGP Certain Codes of Good Practice remain presently outstanding,

e.g. for SMMEs Scorecard should run from 2007 to 2017 Need to publish draft AgriBEE Charter for comment Need for an Indaba in Dec Propose first phase: Section 12 Charter, then Section 9 Sector

Code

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Draft AgriBEE CharterDraft AgriBEE Charter

Draft, including large scale scorecard published on 2 Nov Negotiations identified with stakeholders

• Agri SA• NAFU SA• TAU SA• ABC, SA Processors Assoc, SACOB• Banking Council• Labour• Wine and sugar sectors (legislation)• Women, youth & disabled groups

Indaba planned for 6,7 Dec

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AgriBEE Charter negotiations AgriBEE Charter negotiations

Scope of the Charter requires refinement One main sector charter, limited sub-sector Charters Single balanced scorecard, but weightings taking into account

farming/ non-farming The scorecard requires further interrogation How to deal with issues affecting implementation, e.g. land

restitution SMMEs need to be addressed

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AgriBEE Charter negotiations (cont.)AgriBEE Charter negotiations (cont.)

Need to align other policies, e.g. funding and support with AgriBEE Charter

All stakeholders need to fully digest the CGP Need for certain clarifications by the dti need for follow up communication Impact studies could be done by AgriBEE Council Cost of implementation to be kept down Time constraints in preparations and negotiations

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Process Process

Sector Participants

OtherStakeholders

(including relevantGovernment Department)

SteeringCommittee

Minister

Establish CharterCouncil

Meet Para 16(Statement 10)Qualification

Criteria

PublicProclamation

of CharterProcess

ConsultationProcess

Meet BEE(Act (s12)

Requirement

Gazette asTransformation

Charter

Apply GenericScorecard

MinisterDti

Applicationfor Gazette asSector Codes

IndependentThird-Party

Review

MeetStatement 10

Criteria

CharterMandate

Negotiationand

DraftingProcess

Sector Codes(SectorSpecific

Scorecards)

Draft Charter

TechnicalCommittee

Does not meet Charter QualificationRequirement

Meet Requirements

FLOW CHART PROCESS FOR GAZETTING SECTOR CHARTERSA

B

C

You are now here

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Sector Charter (Section 12)Sector Charter (Section 12)

Expression of commitment to transformation No Legal Status Developed by major stakeholders in sector Advances objectives of Act

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Sector Code (Section 9)Sector Code (Section 9)

To be signed by Minister of Agriculture and industry associations

Independent third party analysis• Justified, defines scope• advances BEE Act• All scorecard elements• consistent with CGP• addresses funding to meet ownership & enterprise

development targets Addresses sector challenges & vision Adresses Charter Council It is legally binding

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OwnershipOwnership

Weighting 20% Targets for voting rights & economic interest for

categories of black people 10-25% Bonus points for land transfer contributions

--------------------------------- Empowerment starts with improved land access and

tenure security Distinction between land and enterprise ownership Voluntary sales of land 30% commercial land target agreed Lead to viable and sustainable enterprises Will develop diversity of enterprise models

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Management Control (see also Employment Equity)Management Control (see also Employment Equity)

Weighting 10% Exercisable voting rights at board and executive level 40-

50%, women 20-25%

--------------------------------- Undertaking to promote black participation, incl. Women, at

executive and board levels

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Employment EquityEmployment Equity

Weighting 10% EE 50%, women 50%

-------------------------------- Proactive employment of black, incl. Women, managers Bonus points for employment of disabled and youth

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Skills DevelopmentSkills Development

Weighting 20% Investment as % of payroll 3%, bias toward literacy &

numeracy Learnerships and interns 3% Qualifying mentorship programmes

-------------------------------- Require more resources for expanding human capital pool

for sustained productivity , entrepreneurship and skills

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Preferential ProcurementPreferential Procurement

Weighting 20% 50%

--------------------------------- Proactive AgriBEE procurement Annual spend reporting Progressively provide preferential supplier status

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Enterprise DevelopmentEnterprise Development

Weighting 10% Cumulative contribution to enterprise development as % of

average nett profit 10%, or 20% of land or assets leased long term leases (>5 years)

--------------------------------- Recognise access to support services core to sustainable

empowerment Develop operational and financial capacity Financial contribution to enterprise development Lease agricultural land

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Rural development and poverty reductionRural development and poverty reduction

Weighting 10% Cumulative contribution to social development as % of nett

profit 10%, or land made available to farm workers 10%

--------------------------------- Contribute to social development and industry specific

initiatives, e.g. housing, recreational and health facilities, transport etc

Make agricultural land available to farm workers

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Monitoring and evaluationMonitoring and evaluation

Each institution fully discloses and reports annually All elements of scorecard M&E centres to be established Link AgriBEE baselines and measurements to census periods Independent AgriBEE Council to be established Targets to be reviewed and corrected every 3 years Comprehensive evaluation after 5 years

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Tasks for Breakaway SessionsTasks for Breakaway Sessions

Focus on improvements to the draft Charter Address specifically:

• In principle agreement of the draft Charter• Identify any gaps for attention• How should the Charter cover the value chain• SMMEs• Scorecard weightings/targets where possible• Any further work that needs to be done• A way forward, e.g. planning for implementation,

organizational and institutional arrangements, funding• Road shows and further clarification required• April launch of AgriBEE Charter