Real Estate Business Owners South Africa REBOSA AGM 29 June
2015
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CONTENT Understanding transformation BBBEE Act & Sector
Codes Application of current transformation and BBBEE Revised Codes
of Good practice Changes to the Codes and implication to PSC
Amendment Bill and Verification process Residential Industry
Scorecard
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Transformation is a mechanism by government using Broad based
Economic empowerment to enable the participation of the previously
marginalised in the main stream economy! UNDERSTANDING
TRANSFORMATION
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WHY IS TRANSFORMATION NECESSARY? SA was forced to take steps to
deal with its past in order to attempt to redress the inequalities
in all spheres of life cause by the previous system of apartheid
One of these steps was the development of a strategy which would
achieve economic transformation- to address inequalities
Transformation is a pragmatic growth strategy that aims to realise
the countrys full economic potential by ensuring all citizen can
participate in the mainstream of the economy in a sustainable
manner. All citizen means Its people and their enterprises
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SA DEMOGRAPHIC STATISTICS
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SA POPULATION: GENDER SPLITS (2012)
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EXPECTED RESULTS OF TRANSFORMATION BBBEE strategy emphasis:
Growth Development Well implemented BBBEE sustainability
Profitability Growth Global competitiveness Innovativeness
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LEGAL AND COMMERCIAL STATUS B-BBEE and Sector Codes do not
impose legal binding obligation of any company to comply; BUT
B-BBEE is an important fact to be taken into account by any company
conducting business in SA. B-BBEE is an important consideration to
successfully tender for Government and State Owned Entities
contracts or in some instances to obtaining government licence and
in Private Public Partnership (PPP).
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WHO IS THE CUSTODIAN OF TRANSFORMATION The DTI (Department
Trade and Investment) is the custodian of transformation/Broad
Based Black Economic Empowerment (B- BBEE) The DTIs mandate is to
increase Trade and Investment in the country in order to allow the
economy to grow The DTI has four Mission statements of how they
will achieve their mandate and one of them is : Grow the economy
through Inclusive Participation There are a number of tools to
drive Inclusive Participation and one of them Broad Based Black
Economic Empowerment (B-BBEE) Women Empowerment Programmes People
with Disability Programme
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Ownership Preferential Procurement Enterprise Development
Employment Equity Skill Development Management Control SED BBBEE AS
A TOOL OF TRANSFORMATION
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BBBEE use 7 elements to drive transformation Ownership
Management Control Employment Equity Skill Development Preferential
Procurement Enterprise Development Socio-Economic Development Plus
Sector Code additional element
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UNDERSTANDING TRANSFORMATION EQUITABLE ECONOMIC OPPORTUNITIES
Ownership equity Management control THE OPPORTUNITY BARRIER
Preferential procurement Enterprise development THE BUSINESS
BARRIER Skills development THE SKILLS BARRIER Employment equity
Socio Economic Development THE POVERTY BARRIER Mainstream economy
upper class Majority are white Wealthy with economic choices
Business owners Upper middle class & investors High income
Positive net asset value Invest in shares Majority are white
Entrepreneur middle class Self employed Owner managed businesses
Small Medium & Micro Enterprises Majority are white The
professional middle class Formal employment (Black Diamonds) School
leavers/graduates Artisans/professionals Second economy The
majority are black With no economic earning ability No technical or
tertiary skills Dependant on grants (Unemployable) Subsistence on
land produce
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BBBEE Act & SECTOR CODES
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Introduction The Broad-Based Black economic Empowerment Act 53
of 2003 (BBBEE Act) provides the legislative framework for broad
based black economic empowerment in SA. The Generic Codes of Good
Practice and Sector Codes are issued under the B-BBEE.
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BBBEE Sector Code What are Sector Codes Development of sector
transformation strategy that uses the generic principles of BBBEE
and accommodating specific nuances of your sector in order to make
transformation more effective and meaningful. Why are sector Codes
important The 7 elements of generic codes are critical and
important but there are also other elements beyond that the country
needs to transform Funding transformation Financial Sector Charter
Access to connectivity ICT Charter Development in under-resourced
area- Property Sector Charter
BBBEE Sector Code BBBEE Sector Codes Bought into being by the
BBBEE Act, No.53 of 2003 They are anchored under the generic codes
Establishment of Sector Codes needs to have as common factor Use
same principles Use Same methodology Use Same calculations Use Same
definitions What Sector Codes are at liberty to change are: Targets
of the different elements Weighting of the different elements
Adding a different/unique element/s
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APPLICATION OF CURRENT TRANSFORMATION AND BBBEE
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BBBEE as a toll of transformation Company threshold Large
Entities Qualifying Small Enterprise (QSE) medium size entity
Exempted Micro Enterprises (EME) Small entity OLD REVISED COGP
LARGE ENTITIES R35M < QSE R5M-R35M EME