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

Codes of Good Practice on Black Economic Empowerment

Integrated Transport Sector Codes

Rail Sub-Sector Code for B-BBEE

3. Indicators of Empowerment

3.6 Preferential Procurement

3.6.3 All Stakeholders commit to:

Purchase

3.6.3.1

Ensure that companies and organisations develop uniform policies on Accounting for Affirmative Procurement and adopt the guidelines that will be set by the Transport Sector BEE Forum/Council.

3.6.3.2

Ensure that companies and organisations constantly explore possibilities to increase the amount of discretionary spending-for example by supporting local procurement and/or content in line with the agreements reached by stakeholders at the Growth and Development Summit (GDS) whilst at all times complying with their Safety Management System requirements.

3.6.3.3

This will require that companies and organisations state in their annual BEE reports the reasons for classifying an item of expenditure as "non-discretionary." This information should be disclosed in a detailed statement that reconciles discretionary and non-discretionary expenditure

3.6.3.4

Companies and organisations should support the Proudly South African (PSA) campaign and note the agreement at the GDS that PSA is "an important means of taking the message of local content, fair labour standards, environmental sustainability and quality products and services to the nation."

3.6.3.5

As far as possible, companies and organisations should use local as opposed to foreign suppliers and state the reasons for using a foreign supplier. Where a foreign supplier must be used, companies and organisations must use the offset principle to secure the commitment of these companies to a set of BEE obligations.

3.6.3.6

As far as possible include early payment cycles, securities, guarantees etc when procuring from to Black owned enterprises, QSEs & EMEs.