Broad-Based Black Economic Empowerment Act, 2003 (Act No. 53 of 2003)Codes of Good Practice on Black Economic EmpowermentIntegrated Transport Sector CodesDefinitions |
For purposes of clarification and for avoidance of ambiguity, the following terms apply to the all the gazetted Broad Based Economic Empowerment (B-BBEE) Sub-Sector Codes:
TERM |
DEFINITION |
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Acceptable Valuation Standard |
Means a valuation of an asset, an Economic Interest, an Enterprise or another instrument or right relevant to measurement under the ownership indicator undertaken in accordance with normal valuation methodologies which represent standard market practice in the context of the nature as well as the stage of development of the asset, Equity Interest or Enterprise being valued. |
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Aged Persons Act |
Means the Aged Persons Act 81 of 1967, as amended. |
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Airline Service Providers |
Are those service providers that give services to airlines companies e.g catering services, travel news magazines etc |
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Allowable Exclusions From Total Procurement |
Refers to procurement by a measured entity as defined in Code 500 of the Generic Codes of Good Practice gazetted on February 2007 and subsequent amendments. |
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Associated Enterprise |
Means any black Enterprise other than the Measured Enterprise with which the Measured Enterprise has concluded a Qualifying Transaction |
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Black aged people |
Black people who are also aged people as defined in the Aged Persons Act 81 of 1967, as amended or substituted |
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Black designated groups |
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Black Enterprise |
Is one that is 50,1% owned by black persons and where there is substantial management control. |
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Black Empowered Enterprise |
Is one that is at least 25.1% owned by black persons and where there is substantial management control |
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Black New Entrants |
Means a black Partnership(s) (which includes without limitation, black Participants in Broad-Based Ownership Schemes) holding in aggregate in excess of 5% of the total Voting Rights and Economic Interest in a Measured Enterprise who has not, prior to their acquisition of their Equity Interest in the Measured Enterprise, concluded similar transactions in respect of any other Enterprise, which in aggregate have a cumulative value of R20,000,000.00 measured in accordance with an Acceptable Valuation. |
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Black People |
has the meaning defined in the Act qualified as including only natural persons who are citizens of the Republic of South Africa by birth or descent; or are citizens of the Republic of South Africa by naturalisation:
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Black unemployed people |
Black people who are unemployed, are not attending or are not required by law to attend an educational institution and who are not awaiting admission to an educational institution |
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Black Women-Owned Enterprise |
is one with a minimum of 50,1% representation of black women in the ownership structure, which includes related economic interest and exercisable voting rights. |
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Black workers |
Black Persons employed in market production activities are those (aged 15-64 years) who during the reference week, even if it was for only one hour, did any of the following:
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Black youth |
Black persons who are also youth as defined in the National Youth Commission Act 19 of 1996, as amended or substituted. |
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Broad Based Black Economic Empowerment (B-BBEE) |
Government defines B-BBEE as an integrated and coherent socio-economic process that directly contributes to the economic transformation of South Africa and brings about significant increases in the numbers of black people that manage, own and control the country's economy, as well as significant decreases in income inequalities. Thus the B-BBEE process will include elements of human resource development, employment equity, enterprise development, preferential procurement, as well as investment, ownership and control of enterprises and economic assets. |
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Community or broad based enterprise |
has an empowerment shareholder who represents a broad base of members such as a local community or where the benefits support a target group, for example black women, people living with disabilities, the youth and workers. |
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Control |
of a business entity can be achieved in a number of ways:
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Co-operative or Collective Enterprise |
An autonomous association of persons who voluntarily join together to meet their economic, social and cultural needs and aspirations through the formation of a jointly-owned enterprise and democratically controlled enterprise. |
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Development |
Includes but not limited to Joint Ventures, sub-contracting, and supplier development initiatives. It also includes but not limited to the facilitation provided by established company to its B-BBEE partners e.g. discounts, access to cash flow, guarantees or put options deferred payments, and other vendor financing models. |
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Direct Empowerment |
The process of BEE should/may result in an increase in the ownership and control of the economy by black persons. This means that a significant portion of a black persons ownership of assets and enterprises must be a controlling interest, reflecting genuine participation in decision making at board executive management and operational levels, and the assumption of real risk. In this Charter, direct empowerment focuses on ownership of enterprises and assets through shares and other instruments that provide the holder thereof with voting rights and economic benefits such as dividends or interest payments. |
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Disabled employees |
For the purpose of this Charter, the definition of employees with disabilities as contained in the Employment Equity Act is used. It means employees who have a long-term or recurring physical or mental impairment, which substantially limits their prospects of entry into or advancement in employment. The total number of employees with disabilities (irrespective of race or gender) is expressed as a percentage of the total number of employees (irrespective of race or gender) in all levels of the organisation. |
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Enterprise Development ventures |
Includes business ventures such as sub-contracting, joint ventures, driver owner schemes, twinning, etc, which involves the development or setting up of business ventures which involves black operators, suppliers and especially or black SMME's (small, medium and micro enterprises). |
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Exclusions from Total Measured Procurement |
Generally has the same meaning as that contained in the Codes of Goods Practice gazetted on the 9 February 2007 and as amended however the list of inclusions/exclusions as per Annexure A of this Charter takes precedence. |
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Executive Management |
Means the most senior position in the organisation as well as the overall heads of major divisions or functions (e.g. finance, engineering, operations, human resources etc.) responsible for planning, policymaking and directing of such functions. |
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Exempted Micro Enterprises |
These are enterprises with a turnover of R5 million or less for the purposes of this charter. They have an automatic recognition level of Level 4 in the B-BBEE Recognition Levels in the B-BBEE Codes of Good Practice. This affords companies procuring from these entities 100% B-BBEE recognition of spend. |
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Fronting |
The deliberate misrepresentation of information in order to gain an advantage over another individual or entity. In addition, it includes the use of questionable ownership structures in order to unjustifiably gain points to get preference points in any business/tender adjudication recess. |
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Growth |
Relates to the National Economic Growth, Industry Growth as well as Enterprise Development growth. |
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Indicator |
The indicator represent the key measurement yardstick included to determine the BEE contribution made by taxi enterprises within each broad-based BEE factor of Ownership, Strategic Representation (Management), Employment Equity, Skills Development, Preferential Procurement, Enterprise Development, Social Development and lndustry Specific. |
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Indirect Empowerment |
a core component of this BEE Strategy is the creation and nurturing of new enterprises established or owned by black people. Preferential procurement by the State, Parastatals and the private sector is an effective and efficient instrument to drive BEE. A second element of indirect empowerment is enterprise development. This can take two forms:
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Indirect ownership |
Occurs where a company or any other institution owns equity in a company on behalf of beneficiaries and there is no direct participation by the beneficiaries in the voting rights. |
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Job Creation |
Refers to the creation of opportunities for sustainable permanent employment. |
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Job Creation Target |
This is not a payroll tax but refers to a stakeholder commitment to create opportunities for unemployed learners for which there is a tax rebate from government. These employees must account for 5% of the workforce. |
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Learners |
Refers to the people participating in learnerships or other learning interventions. |
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Leviable Amount |
Bears the meaning as defined in the Skills Development Levies Act of 1999 as determined using the Fourth Schedule to the Income Tax Act. |
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Locally-owned Enterprise |
A commercial undertaking or business where 50% or more of shareholding is held within the borders of the Republic of South Africa. |
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Management |
Refers to the effective control of economic activities and resources. This involves the power to determine policies as well as the direction of economic activities and resources. Management control measures black representation at board of directors' level and executive management level. |
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Managerial or Supervisory Employees |
Means employees who are working in supervisory or managerial positions i.e. those who have other employees reporting to them and who are responsible to oversee and supervise subordinates and/or processes. |
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Midibus |
Minibus means a motor vehicle designed, or lawfully adapted by a registered manufacturer in compliance with Road Traffic Act, 1989 (Act No. 29 of 1989), to carry from nine to 18 seated persons, excluding the driver. |
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Net Asset Value |
Within the context of this Sub-Sector Code this term refers to Total Asset less Liabilities. |
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Net Value |
This is the portion of equity in the hands of black shareholders that is fully paid up. Essentially it is the value of the shareholding, less the outstanding amounts owed by that shareholder to third party funders or the principle entity in which the stake was acquired. |
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Net Economic Interest |
Is the percentage of the shareholding by black shareholders that is unencumbered by any financial obligations to third parties or to the principle company in which the stake is held. |
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Non-Discretionary spend |
Non-discretionary spending is spending that is required and by law. |
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Ownership |
refers to equity participation and the ability to exercise rights and obligations that accrue under such ownership. These rights and obligations include the right the economic interest flowing from the shareholding and the right to exercisable voting rights in proportion to that shareholding. It also refers to the net economic interest, in other words paid up capital. The parties to this Charter agree that the measurement of the extent of the achievement of this target of the aggregate value of the equity will be based on the asset values per the audited accounts of the entities concerned and that the net economic interest will be calculated according to the market value of the shareholding less the outstanding amounts owing to third parties or the principle company by the black shareholders. |
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People Living With Disabilities |
Disabled employees. For the purpose of this Charter, the definition of employees with disabilities as contained in the Employment Equity Act is used. It means employees who have a long-term or recurring physical or mental impairment, which substantially limits their prospects of entry into or advancement in employment. The total number of employees with disabilities (irrespective of race or gender) is expressed as a percentage of the total number of employees (irrespective of race or gender) in all levels of the organisation. Types of disabilities include: Spinal injuries – quadriplegic, paraplegic; Physical disabilities and deformities – post polio, amputations, arthritis, cerebral palsy; Epilepsy; Traumatic brain injuries & neurological disorders, strokes; Visual impairments – blind, degrees of blindness, retinitis pigment, albinism; Hearing impairments – deaf, degrees of deafness; Psychiatric conditions – depression, bi-polar, personality disorders, mood disorders; Learning disabilities – dyslexia, downs syndrome; and Communication/speech problems |
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Preferential Procurement |
Is a measure designed to widen market access for entities, in order to integrate them into mainstream of the economy. Preferential Procurement will create economic empowerment benefits indirectly but meaningfully as it multiplies the effects of private and public sector intervention to promote broad-based BEE |
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Scorecard |
means the standard B-BBEE scorecard used by the transport sector. |
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Skills Development |
Refers to all expenditure on Black skills development; education and training (including the Skills Development Levy). The actual expenditure on Black skills development, education and training that has been conducted during the last completed financial year to be used as a basis for the calculation. The total expenditure on Black skills development, education and training is expressed as a percentage of the total payroll costs. Total payroll costs include all remuneration related expenditure such as basic wages/salaries, overtime, and employment related company contributions. |
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Socio-economic Development |
Specifically aimed at targeted socio-economic development projects or initiatives. Organisations are encouraged to support, develop and invest in targeted community projects - this includes e.g. poverty alleviation initiatives, HIV/ Aids programmes, study bursaries, programmes or projects for the disabled, occupational health programmes, youth camps, crime prevention programmes, alcohol and drug awareness, and internships. |
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Stakeholders |
Refers to a range of interest groups who directly and indirectly participated in this process. These groups included Government, Private Industry, Parastatals, Agencies, Financial Institutions (Private and Public), Organised Labour, Civil Society Associations, B-BBEE operators, suppliers, SMME's as well as individuals. |
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Taxi Recapitalisation |
The overall goal of the Taxi Recapitalisation (TRP) initiated by Government in 1999 is the replacement of the current ageing fleet that constitute the bulk of the taxi industry with new vehicles that are safe and reliable. The programme also sought to ensure the sustainability of the industry as a business, as well as ensure its formalisation and effective regulation. |
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Total Measured Procurement Spend |
Generally has the same meaning as that contained in the Codes of Good Practice gazetted on 9 February 2007 and as amended however the list of exclusions as per Annexure A of this Charter takes precedence. |
Definitions of terms and concepts not captured in this Charter are contained in the Codes of Good Practice gazetted on 9 February 2007.