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Broad Based Black Economic Empowerment Act, 2003 (Act No. 53 of 2003)

Industry Charters

Agri-BEE Charter

5. Elements of Empowerment

5.5. Preferential Procurement

 

The success of the Sector's commitment to AgriBEE will largely be determined by the extent of the implementation of preferential procurement initiatives which will influence contractual relationships within the value chain. The objective of the preferential procurement element is to reward Enterprises which contribute towards broad-based BEE and to promote and encourage sustainable procurement from QSE's and EME's.

 

The provisions in the generic Codes of Good Practice in terms of Total Measured Procurement Spend and Exclusions from Total Measured Procurement Spend, in order to measure B-BBEE Procurement Spend, will be valid and direct the practice in this regard.

 

In the event of a natural disaster that has a significant impact on the structure of food supply, the AgriBEE Charter Council shall be empowered to make recommendations to revise any of the provisions, including import exclusions or mechanisms, in terms of this element in consultation with the Ministers of Agriculture and Trade and Industry.

 

Agri-Industry undertakes to:-

 

5.5.1. Proactively identify and implement targeted procurement strategies and policies to realise AgriBEE objectives and to meet preferential procurement targets;

 

5.5.2. Report annually on all preferential procurement spent;

 

5.5.3. Calculate preferential procurement spend on a proportional recognition basis, from suppliers with a BEE status of 30% or more on any broad-based BEE scorecard which has undergone a consultative process. The proportional recognition mechanism is contained in the table below:

 

BEE Status

Qualification

BEE procurement

recognition level

Level One Contributor

≥100 points on a broad-based

BEE Scorecard

135%

Level Two Contributor

≥85 but <100 points on a

broad-based BEE Scorecard

125%

Level Three Contributor

≥75 but <85 on a broad-based

BEE Scorecard

110%

Level Four Contributor

≥65 but <75 on a broad-based

BEE Scorecard

100%

Level Five Contributor

≥55 but <65 on a broad-based

BEE Scorecard

80%

Level Six Contributor

≥45 but <55 on a broad-based

BEE Scorecard

60%

Level Seven Contributor

≥40 but <45 on a broad-based

BEE Scorecard

50%

Level Eight Contributor

≥30 but <40 on a broad-based

BEE Scorecard

10%

Non Compliant

Contributor

<30 on a broad-based BEE

Scorecard

0%

 

5.5.4. Progressively provide preferred supplier status to QSE's and EME's, including the supply of services and goods, in accordance with the requirements of the AgriBEE Scorecard.

 

Government undertakes to: -

 

5.5.5. Align their procurement practices with AgriBEE when procuring goods and services from the Agricultural Sector, once Sector Codes for the Agricultural Sector have been gazetted;

 

5.5.6. Provide Black People and QSE's preferred supplier status in the procurement of goods and services;

 

5.5.7. Identify, prioritise and target Black Entrepreneurs and Enterprises that contribute to Broad-based BEE, when awarding tenders and contracts to entities in the private sector; and

 

5.5.8. Utilise all legislative and other measures available to it, including preferential procurement, to influence the attainment of broadbased BEE objectives.