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

Codes of Good Practice on Black Economic Empowerment

Integrated Transport Sector Codes

Road Freight Sub-Sector Code

3. Indicators of Empowerment

3.2 Ownership

 

 

3.2.1 The vision is to increase black ownership, management control and operational involvement throughout the road freight industry value chain and design appropriate funding mechanisms to facilitate the process. We recognise that ownership is a complex matter due to the large number of different ownership structures prevalent in the Road Freight Industry. Businesses in this industry range from large corporate organisations to small family businesses and even owner-driver operations. However, stakeholders will collectively strive to address these challenges and develop innovative mechanisms to increase black ownership.

 

3.2.2 Stakeholder undertakings

 

3.2.2.1 Government Commits to:

 

3.2.2.1.1 Engage public and private sector funding agencies to facilitate innovative funding mechanisms for BEE companies seeking to invest in the sector. This will require a high-level workshop with these agencies to inform them about opportunities available in the transport industry, including road freight.

 

3.2.2.2        The Private Industry Commits to:

 

3.2.2.2.1 Voting Rights-Black People: The Private Sector commits to  a minimum of 25%+1 voting rights in hands of Black People.

 

3.2.2.2.2 Voting Rights-Black Women: The Private Sector commits to ensure a minimum of 10% of voting rights in the hands of Black Women

 

3.2.2.2.3 Economic Interest: The Private Sector commits to a minimum of 25% of equity interest in the hands of Black People.

 

3.2.2.2.4 Economic Interest-Black Women: The Private Sector commits a minimum of 10% of equity interest in the hands of Black Women.

 

3.2.2.2.5 Ensure that 2.5% is earmarked for black natural people in the enterprise: Employee Ownership Schemes, Broad based Ownership Schemes and Co-operatives within five years.

 

3.2.2.2.6 Qualifying small enterprises as defined in this Sub-Sector Code also commit to:

 

3.2.2.2.6.1 Increase the ownership base of their companies and ensure that a minimum of 25% of economic interest is the hands of black people;

 

3.2.2.2.6.2 25% + 1 vote voting rights, or equivalent thereof, are in black hands; and,

 

3.2.2.2.6.3 Ensure that the net economic interest of the black equity participants is 60% of the 25% within 5 years. If this is achieved, it will be deemed that Ownership Fulfilment has been achieved.

 

3.2.2.3        Stakeholders will consider a variety of ownership models, including:

 

3.2.2.3.1 Joint Ventures

 

3.2.2.3.2 Sale of Assets

 

3.2.2.3.3 Employee Share Ownership Participation Schemes

 

3.2.2.3.4 Collective ownership schemes

 

3.2.2.3.5 The measurement of ownership contributions from the above ownership models are the same as the one contained in the Codes.

 

3.2.2.3.6 Develop creative financing  mechanisms for BEE companies to achieve equity ownership.

 

3.2.3 Measuring Principles and Application of the Charter

 

3.2.3.1 Measurement principles associated with the ownership element, are contained in Statement 100 of Code 100 of the Generic Codes of Good Practice.

 

3.2.3.2 The formulae required in the determination of the ownership score are contained in Annexure 100 (c) of Statement 100 of Code 100 of the Generic Codes of Good Practice.

 

3.2.3.3 The recognition of the sale of assets under the ownership element has the same meaning as that contained in Statement 102 of Code 100 of the Generic Codes of  Good Practice. The target contained in the ownership element of this Sub-Sector Code will apply.

 

3.2.3.4 The recognition of the equity equivalent programmes for multinationals has the same meaning and interpretation as that contained in Statement 103 of Code 100 of the Generic Codes of Good Practice.

 

3.2.3.5 The formulae required in the determination of the ownership score based on equity equivalent contributions are contained in Annexure 103 (A) of Statement 103 of Code 100 of the Generic Codes of Good Practice.

 

3.2.3.6 Measurement principles relating to the ownership element for QSEs are contained in Statement 801 of Code 800 of the Generic Codes of Good Practice.