Statistics Act, 1999
R 385
Broad-Based Black Economic Empowerment Act, 2003 (Act No. 53 of 2003)Amended AgriBEE Sector Code (20177. Elements of Empowerment7.5 Enterprise and Supplier Development |
| 7.5.1 | Amended Enterprise and Suppliers Development Scorecard for Large Enterprise |
|
Enterprise and Supplier Development for Large Enterprise |
||||
|
Weighting |
Measurement Category & Criteria |
Weighting Points |
Compliance Target |
|
|
|
PREFERENTIAL PROCUREMENT |
|||
|
40 |
7.5.1.1 |
B-BBEE Procurement Spend from all Empowering Suppliers based on the B-BBEE Procurement Recognition Levels as a percentage of Total Measured Procurement Spend |
5 |
80% |
|
7.5.1.2 |
B-BBEE Procurement Spend from all Empowering Suppliers that are Qualifying Small Enterprises based on the applicable B-BBEE Procurement Recognition Levels as a percentage of Total Measured Procurement Spend |
3 |
15% |
|
|
7.5.1.3 |
B-BBEE Procurement Spend from all Exempted Micro-Enterprises based on the applicable B-BBEE Procurement Recognition Levels as a percentage of Total Measured Procurement Spend |
4 |
15% |
|
|
7.5.1.4 |
B-BBEE Procurement Spend from Empowering Suppliers that are at least 51% black owned based on the applicable B-BBEE Procurement Recognition Levels as a percentage of Total Measured Procurement Spend Phase in: 10% for 1st Year, 20% for 2nd year, 25% for 3rd year, 30% for 4th year, 40% for 5th year, provided the measured entity achieve the 3% NPAT under 2.1 below) |
9 |
40% |
|
|
7.5.1.5
|
B-BBEE Procurement Spend from Empowering Suppliers that are at least 30% black women owned based on the applicable B-BBEE Procurement Recognition Levels as a percentage of Total Measured Procurement Spend. Phase in: Target is 6% for year 1 to year 4, provided the target for supplier development is increased to 3% NPAT. |
4 |
12% |
|
|
Bonus points |
||||
|
7.5.1.6
|
B-BBEE Procurement Spend from Designated Group Suppliers that are at least 51% Black owned. |
2 |
2% |
|
|
SUPPLIER DEVELOPMENT |
||||
|
7.5.1.7 |
Annual value of all Supplier Development Contribution made by the Measured Entity as a percentage of the target |
10 |
(3% of NPAT for year 1 to year 4) 2% of NPAT |
|
|
ENTERPRISE DEVELOPMENT |
||||
|
7.5.1.8
|
Annual value of Enterprise Development Contribution and Sector Specific Programmes made by the Measured Entity as a percentage of the target. |
5 |
1.5% of NPAT |
|
|
Bonus points |
||||
|
7.5.1.9
|
Bonus point for graduation of one or more Enterprise Development beneficiaries to graduate to the Supplier Development level |
1 |
|
|
|
7.5.1.10
|
Bonus point for creating one or more jobs directly as a result of Supplier Development and Enterprise Development initiatives by the Measured Entity. |
1 |
|
|
Key Principle Note 1:
Ownership is kept at 25% + 1 vote because emphasis is placed on Enterprise and Supplier Development to develop and initiate more black industrialists to own enterprises. This will be reviewed by the AgriBEE Sector Charter Council every 2nd year of the implementation of this sector code. Two or more Measured Entities are allowed to pool their resources or fund in order to implement Enterprise and Supplier Development initiatives informed by a needs analysis. However, each entity will have to provide proof to the Verification Agency of their contribution towards the initiatives.
| 7.5.2 | Enterprise and Suppliers Development Specialised Scorecard for Large Enterprises |
The following table represents the criteria to derive a score for Enterprise and Supplier Development.
|
Enterprise and Supplier Development Specialised for Large Enterprises |
|||
|
Criteria |
Weighting Points |
Compliance Target |
|
|
7.5.2.1 |
B-BBEE Procurement Spend from all Empowering Suppliers based on B-BBEE Procurement Recognition Levels as a percentage of Total Measured Procurement Spend) |
5 |
80% |
|
7.5.2.2 |
B-BBEE Procurement Spend from all Small Enterprises based on the applicable B-BBEE Procurement Recognition Levels as a percentage of Total Measured Procurement Spend |
4 |
15% |
|
7.5.2.3 |
B-BBEE Procurement Spend from all Exempted Micro-Enterprises based on the applicable B-BBEE Procurement Recognition Levels as a percentage of Total Measured Procurement Spend |
5 |
15% |
|
7.5.2.4 |
B-BBEE Procurement Spend from Empowering Suppliers that are at least 51% black owned based on the applicable B-BBEE Procurement Recognition Levels as a percentage of Total Measured Procurement Spend |
11 |
40% |
|
7.5.2.5 |
B-BBEE Procurement Spend from Empowering Suppliers that are at least 30% black women owned based on applicable B-BBEE Procurement Recognition Levels as a percentage of Total Measured Procurement Spend |
5 |
12% |
|
Bonus points |
|||
|
7.5.2.6 |
B-BBEE Procurement Spend from Designated Group Suppliers that are at least 51% black owned |
2 |
2% |
|
Supplier Development |
|||
|
7.5.2.7 |
Annual value of all Supplier Development Contributions made by the Measured Entity as a percentage of the target |
15 |
2% of Net Profit After Tax (NPAT) or 0,2% Annual Revenue/Allocated budget/Gross receipts/Discretional spend |
|
Enterprise Development |
|||
|
7.5.2.8 |
Annual value of all Enterprise Development Contributions and Sector Specific Programmes made by the Measured Entity as a percentage of the target |
5 |
1% of Net Profit After Tax (NPAT) or 0,1% Annual Revenue/Allocated budget/Gross receipts/Discretional spend |
|
Bonus Points |
|||
|
7.5.2.9 |
Bonus points for graduation of one or more Enterprise Development beneficiaries to graduate to the Supplier Development level |
1 |
|
|
7.5.2.10 |
Bonus points for creating one or more jobs directly as a result of Supplier Development and Enterprise Development initiatives by Measured Entity |
1 |
|
| 7.5.3 | Amended Enterprise and Suppliers Development Scorecard for QSE |
|
Enterprise and Suppliers Development for QSE |
||||
|
Category and Ownership Indicator |
Weighting Points |
Compliance Target |
||
|
|
Preferential Procurement |
|||
|
25 |
7.5.3.1 |
B-BBEE Procurement Spend from all Empowering Suppliers based on the B-BBEE Procurement Recognition Level as a percentage of Total Measured Procurement Spend |
10 |
60% |
|
7.5.3.2 |
B-BBEE Procurement Spend from Empowering Suppliers that are at least 51% black owned based on the applicable B-BBEE Procurement Precognition Levels as a percentage of Total Measured Procurement Spend Phase in: 5% for 1st Year, 10% for 2nd year, 15% for 3rd year, |
5 |
15% |
|
|
Supplier Development |
||||
|
7.5.3.3 |
Annual value of all Supplier Development Contribution made by the Measured Entity as a percentage of the target |
5 |
1% of NPAT |
|
|
Enterprise Development |
||||
|
7.5.3.4 |
Annual value of Enterprise Development Contribution and Sector Specific Programmes made by the Measured Entity as a percentage of the target. |
5 |
1.5% of NPAT |
|
| 7.5.4 | Amended Enterprise and Suppliers Development Specialised Scorecard for QSE |
The following table represents the criteria to derive a score under this statemen:
|
Enterprise Development for QSE |
|||
|
Criteria |
Weighting Points |
Compliance Target |
|
|
7.5.5 Preferential Procurement |
|||
|
7.5.5.1
|
B-BBEE Procurement Spend from all Empowering Suppliers based on the B-BBEE Procurement Recognition Levels as a percentage of Total Measured Procurement Spend |
25 |
60% |
|
7.5.5.2
|
B-BBEE Procurement Spend from all Empowering Suppliers that are at least 51% black owned based on the applicable B-BBEE Procurement Recognition Levels as a percentage of Total Measured Procurement Spend |
5 |
10% |
| 7.5.6 | Key Measurement principles |
| 7.5.6.1 | The Enterprise and Supplier Development consist of: |
| (a) | Preferential Procurement; and |
| (b) | Enterprise Development and Supplier Development. |
| 7.5.6.2 | Enterprise Development and Supplier Development Contributions will be recognized as a percentage of annual Net Profit After Tax(NPAT). |
| 7.5.6.3 | All other key principles of Statement 400 of the Amended Generic Codes not addressed in this statement are applicable. |
| 7.5.7 | Subminimum and Discounting principle |
| 7.5.7.1 | A measured Entity must achieve a minimum of 40% of the targets set out on 1, 2 and 3 excluding bonus points of the Enterprise and Supplier Development Scorecard. |
| 7.5.7.2 | Non-compliance to the threshold targets will result in the overall achieved B-BBEE status level being discounted in accordance with paragraph 3.4 in statement 000. |
| 7.5.7.3 | An empowering Supplier within a context of B-BBEE is a B-BBEE compliant entity, which is a good citizen South African entity, comply with all regulatory requirements of the country and should meet at least three if it is a large enterprise or one if it is a QSE of the following criteria: |
| (a) | At least 25% of cost of sales excluding labour cost and depreciation must be procured from local producers or local supplier in SA, for service industry labour cost are included but capped to 15%. |
| (b) | Job creation – 50% of jobs created are for Black people provided that the number of Black employees since the immediate prior verified B-BBEE Measurement is maintained. |
| (c) | At least 25% transformation of raw material/beneficiation which include local manufacturing, production and/or assembly, and/or packaging. |
| (d) | Skills transfer - at least 12 days per annum of productivity deployed in assisting Black EMEs and QSEs beneficiaries to increase their operation or financial capacity. |
| (e) | At least 85% of labour cost should be paid to South African employees by service industry entities. |
| 7.5.7.4 | EMEs and Start-Ups are automatically recognised as Empowering Suppliers. |
| 7.5.7.5 | The weighting points in the Enterprise and Supplier Development scorecard represent maximum number of points possible for each of the criteria. |
| 7.5.7.6 | If a measured entity procures goods and services from a supplier that is: |
| (a) | A recipient of supplier development contributions from a Measured Entity under Code series 400 that has a minimum 3 year contract with the Measured Entity, the recognisable B-BBEE Procurement Spend that can be attributed to that Supplier is multiplied by a factor 1.2; |
| (b) | A black owned QSE or EME which is not a supplier development beneficiary but that has a minimum 3 year contract with the Measured Entity, the recognisable B-BBEE Procurement Spend that can be attributed to that Supplier is multiplied by a factor of 1.2; |
| (c) | A first time Black owned supplier to the Measured Entity, the recognisable B-BBEE Procurement Spend that can be attributed to that Supplier is multiplied by a factor of 1.2; |
| (d) | Procurement of goods and services and any other activities that fall under 1 will not qualify for scoring under 2 and 3 and vice versa; and |
| (e) | Beneficiaries of Supplier Development and Enterprise Development are EMEs or QSEs which are at least 51% black owned or at least 51% black women owned. |
| 7.5.7.7 | Contributions by the measured entity can be recognised for up to two years even if the beneficiary turnover/ revenue threshold exceeds the measured threshold, on condition that when the intervention was initiated the threshold was qualifying. |
| 7.5.8 | General Principles |
| 7.5.8.1 | To strengthen local procurement in order to help South Africa’s industrial base in critical sectors of production and value adding manufacturing, which are largely labour-intensive industries. |
| 7.5.8.2 | To increase local procurement through capacity building achieved by incentivising appropriate local supplier development programmes by businesses supplying imported goods and services. |
| 7.5.8.3 | The imports provisions do not apply to the designated sectors and products for local production, as when published. |
| 7.5.8.4 | To actively support procurement from black owned QSEs and EMEs by identifying opportunities to increase procurement from local suppliers in order to support employment creation. |
| 7.5.8.5 | To support procurement from black owned and black women owned businesses in order to increase the participation of these businesses in the main stream economy. |
| 7.5.8.6 | To promote the use of black owned professional service providers and entrepreneurs as suppliers. |
| 7.5.8.7 | Measured Entities receive recognitions for any Enterprise Development and Supplier Development Contributions that are quantifiable as a monetary value using Standard Valuation Method. |
| 7.5.8.8 | Measured Entities are encouraged to align their Enterprise Development and Supplier Development initiatives with designated sectors of government’s localisation in value adding programmes. |
| 7.5.8.9 | Measured Entities are encouraged to align their Enterprise Development and Supplier Development initiatives with their supply chain requirements thereby linking Enterprise Development and Supplier Development with Preferential Procurement. |
| 7.5.8.10 | Qualifying Enterprise Development and Supplier Development Contributions of any Measured Entity are recognisable on an annual basis. |
| 7.5.8.11 | Contributions, programmes and/or initiatives that span over multiple years, the total contribution amount must be divided by the number of years, and the average per year is then to be utilised for annual contribution. |
| 7.5.8.12 | Measured Entities are encouraged to develop and implemented Enterprise Development and Supplier Development plan for Qualifying Beneficiaries. The plan should include: |
| 7.5.8.12.1 | Priority interventions; |
| 7.5.8.12.2 | Key performance indicators; and |
| 7.5.8.12.3 | A concise implementation plan with clearly articulated milestones. |
| 7.5.8.13 | Measured Entities will not get recognition for the same activities undertaken under 2 and 3. They will only get recognition for one of two, i.e. 2 or 3. |
| 7.5.8.14 | No portion of the value of any Qualifying Enterprise Development and Supplier Development Contribution that is payable to the beneficiary after the date of measurement can form part of any calculation under this statement. |
| 7.5.8.15 | Land lease or rental by white farmers from black land owners can be recognised under preferential procurement spend, provided that the written lease agreement is entered into and negotiated at arm’s length at a fair and market related value. |
| 7.5.9 | Total Measured Procurement Spend |
The following procurement is measurable within Total Measured Procurement Spend:
| 7.5.9.1 | Cost of sales: all goods and services procured that comprise the cost of sales of the Measured Entity; |
| 7.5.9.2 | Operational expenditure: all goods and services procured that comprise the operational expenditure of the Measured Entity; |
| 7.5.9.3 | Capital expenditure: all capital expenditure incurred by the Measured Entity; |
7.5.10 Public sector procurement:
| 7.5.10.1 | All goods and services procured from organs of state and public entities. Despite this, procurement by a Measured Entity from a local government authority, which is a reseller of that service, is measurable at the B-BBEE Recognition Level of the primary Supplier of the service; and |
| 7.5.10.2 | In any event, any procurement of any goods or services from any organ of state or public entity that enjoys a statutory or regulated monopoly in the supply of such or services, is excluded; |
| 7.5.11 | Monopolistic procurement: all goods and services procurement from suppliers that enjoy a monopolistic position; |
| 7.5.12 | Third-party procurement: all procurement for third-party or a client, where the cost of that procurement is an expense recorded in the Measured Entity’s annual financial statements; |
| 7.5.13 | Labour brokers and independent contractors: any procurement of the Measured Entity which is Outsourced Labour Expenditure; |
| 7.5.14 | Pension and medical aid contributions: payments made to any post retirement funding scheme or to a medical aid or to a similar medical insurer by a Measured Entity for its employees, excluding any portions of such payments which are a contribution to a capital investment of the employee. The scheme or insurer must issue a certificate dividing payments between the capital investment portion and the balance to establish the amount that is measurable within Total Measured Procurement Spend; |
| 7.5.15 | Trade commissions: any commission or similar payments payable by a Measured Entity to any other person pursuant to the business or trade of the Measured Entity; |
| 7.5.16 | Empowerment related expenditure: all goods and services procured in carrying out B-BBEE. The Total Measured Procurement Spend does not include actual contribution portion recognised under section 2 and 3 of this statement or Code series 500 but does include any expenditure incurred in facilitating those contributions; |
| 7.5.17 | Imports: all goods and services that are imported or procured from a non- South African source; and |
| 7.5.18 | Intra-group procurement: all goods and services procured from subsidiaries or holding companies of the Measured Entity (BEE credentials of the entity supplying goods and/or services must be confirmed by way of a valid BEE certificate). |
| 7.5.19 | Exclusion from Total Measured Procurement Spend |
The following list provides permissible exclusions from Total Measured Procurement Spend recognisable in terms of paragraph 7.5.9 to 7.5.18.
| 7.5.19.1 | Taxation: any amount payable to any person which represents a lawful tax or levy imposed by an organ of state authorised to impose such tax or levy, including rates impose by a municipality or other local government; |
| 7.5.19.2 | Salaries, wages, remunerations, and emoluments: any amount payable to an employee as an element for their salary or wage and any emolument or similar payment paid to a director of Measured Entity; and |
| 7.5.19.3 | Pass-through third-party procurement: all procurement of third-party or a client that is recorded as an expense in the third-party or client’s annual financial statement but is not recorded as such in the Measured Entity’s annual financial statement. |
| 7.5.19.4 | Empowerment Related Procurement: |
| 7.5.19.4.1 | Investments in or loans to an Associated Enterprise; and |
| 7.5.19.4.2 | Investments, loans or donations qualifying for recognition under any statement under Code series 400 or 500 of the Amended Codes. |
| 7.5.19.5 | Imports: The following Imported Goods and Services: |
| 7.5.19.5.1 | Imported capital goods or components for value-added production in South Africa provided that: |
| 7.5.19.5.1.1 | there is no existing local production of such capital goods or components; and |
| 7.5.19.5.1.2 | importing those capital goods or components promotes further value-added production within South Africa; |
| 7.5.19.5.2 | Imported goods and services other than those listed in paragraph 7.5.19.5.1.1 if there is no local production of those goods or services including, but not limited to, imported goods or services that— |
| 7.5.19.5.2.1 | Carry a brand different to the locally produced goods or services; or |
| 7.5.19.5.2.2 | Have different technical specifications to the locally produced goods or services. |
| 7.5.19.5.3 | The exclusion of imports listed under 7.4.6.5.2 are subject to them having developed and implemented an Enterprise Development and Supplier Development plan for imported goods and services. This plan should include: |
| 7.5.19.5.3.1 | Clear objectives; |
| 7.5.19.5.3.2 | Priority interventions; |
| 7.5.19.5.3.3 | Key performance indicators; and |
| 7.5.19.5.3.4 | A concise implementation plan with clearly articulated milestones. |
| 7.5.19.5.4 | The Department of Trade and Industry will from time to time consult with the industry and issue practice notes with regard to the provisions on import exclusion. |
| 7.5.20 | Measurement of B-BBEE Procurement Spend |
| 7.5.20.1 | B-BBEE Procurement Spend is the value of the procurement falling within paragraph 7.5.1 to 7.5.18 and not excluded by paragraph 7.5.19. If a supplier falls within a category of supplier listed in paragraph 7.5.7.6, the value of procurement from that supplier is multiplied by the applicable factor listed in that paragraph. |
| 7.5.20.2 | B-BBEE Procurement Spend can be measured in terms of formula ‘A’ in Annexure 400 (A) of the Amended Codes. |
| 7.5.20.3 | The B-BBEE Procurement Spend for a Measured Entity in respect of supplier is calculated by multiplying the spend contemplated by paragraph 7.5.1 to 7.5.18 (and not excluded by paragraph 7.5.19) in respect of that supplier by supplier’s B-BBEE Recognition Level. |
| 7.5.20.4 | A Measured Entity’s Total Procurement Spend is the total of all amounts calculated in terms of paragraph 7.5.20.2. |
| 7.5.21 | The calculation of Preferential Procurement Contributions to B-BBEE |
| 7.5.21.1 | A Measured Entity receives a score for procurement in proportion to the extent that it meets the compliance target. |
| 7.5.21.2 | The Measured Entity’s score for Preferential Procurement contributions to B-BBEE under the preferential procurement scorecard can be calculated in terms of formula ‘B’ in Annexure 400(A). |
| 7.5.22 | Enterprise Development and Supplier Development Contributions |
| 7.5.22.1 | The following is a non-exhaustive list of Enterprise Development and Supplier Development Contributions: |
| 7.5.22.1.1 | Investments in beneficiary entities; |
| 7.5.22.1.2 | Loans made to beneficiary entities; |
| 7.5.22.1.3 | Guarantees given or security provided on behalf of beneficiaries; |
| 7.5.22.1.4 | Credit facilities made available to beneficiary entities; |
| 7.5.22.1.5 | Grant Contributions to beneficiary entities; |
| 7.5.22.1.6 | Direct costs incurred by Measured Entity in assisting and hastening development of beneficiary entities; |
| 7.5.22.1.7 | Overhead costs of Measured Entity directly attributable to Enterprise Development and Supplier Development Contributions; |
| 7.5.22.1.8 | Preferential credit terms granted by Measured Entity to beneficiary entities; |
| 7.5.22.1.9 | Preferential terms granted by a Measured Entity in respect of its supply of goods and services to beneficiary entities; |
| 7.5.22.1.10 | Contributions made to settling service costs relating to operational or financial capacity or efficiency levels of beneficiary entities; |
| 7.5.22.1.11 | Discounts given to beneficiary entities in relation to the acquisition and maintenance cost associated with the grant to those beneficiary entities of franchise, licence, agency, distribution or other similar business rights; |
| 7.5.22.1.12 | The creation or development of capacity and expertise for beneficiary entities needed to manufacture or produce goods or services previously not manufactured, produced or provided in the Republic of South Africa is provided for in Government’s economic growth and local supplier development policies and initiatives; |
| 7.5.22.1.13 | Facilitating access to credit for beneficiary entities without access to similar credits facilities through traditional means owing to lack of credit history or lack of collateral; |
| 7.5.22.1.14 | Provision of training or mentoring by suitably qualified entities or individuals to beneficiary entities which will assist the beneficiary entities to increase their operational or financial capacity; |
| 7.5.22.1.15 | The maintenance by the Measured Entity of an Enterprise Development and Supplier Development unit which focuses exclusively on support of beneficiary entities or candidate beneficiary entities; |
| 7.5.22.1.16 | New projects promoting beneficiation by the Measured Entity for the benefit of Enterprise Development and Supplier Development Beneficiaries; |
| 7.5.22.1.17 | Provision of preferential credit facilities to a beneficiary entity by a Measured Entity may constitute an Enterprise Development and Supplier Development Contribution. Examples of such contributions include without limitation; |
| 7.5.22.1.17.1 | Provision of finance to beneficiary entities at lower than commercial rates of interest; |
| 7.5.22.1.17.2 | Relaxed security requirements or absence of security requirements for beneficiary entities unable to provide security for loans; and |
| 7.5.22.1.17.3 | Settlement of accounts with beneficiary entities over a shorter period of time in relation to Measured Entity’s normal payment period, provided the shorter period is no longer than 15 days. |
| 7.5.22.1.18 | Provide training and mentoring to beneficiary communities by Measured Entity. (Such contributions are measurable by quantifying the cost of time (excluding travel or commuting time) spent by staff or management of the Measured Entity in carrying out such initiatives. A trainer or mentor, must support any claim for time costs incurred). |
| 7.5.22.1.19 | Maintain an Enterprise Development and Supplier Development unit by the Measured Entity. (Only that option of salaries and wages attributable to time spent by staff in, and the other expenses related to, promoting or implementing Enterprise Development and Supplier Development constitute contributions); and |
| 7.5.22.1.20 | Payments made by the Measured Entity to suitably qualified and experienced third parties to perform Enterprise Development and Supplier Development on the Measured Entity’s behalf. |
| 7.5.23 | Monetary and Non-Monetary Contributions |
| 7.5.23.1 | Subject always to the definition of Qualifying Enterprise Development and Supplier Development Contributions, the following monetary/non-monetary contributions will, without limitation, be considered: |
| 7.5.23.1.1 | The provision of seed or development capital; |
| 7.5.23.1.2 | Contributions made towards the settlement of the cost of services relating to the operational or financial capacity and/or efficiency levels of Qualifying Enterprise Development and Supplier Development Beneficiary including, without limitation: |
| 7.5.23.1.2.1 | Professional and consulting services; |
| 7.5.23.1.2.2 | Licensing and/or registration fees; |
| 7.5.23.1.2.3 | Industry specific levies and/or other such fees; and |
| 7.5.23.1.2.4 | IT services; |
| 7.5.23.1.3 | Subject to paragraph 7.4.10.1, creation development of capacity and expertise for Beneficiary Entities required to manufacture or produce goods and/or services previously not manufactured, produced or provided in the Republic of South Africa; |
| 7.5.23.1.4 | Subject to paragraph 7.4.10.2, provision of preferential credit facilities; |
| 7.5.23.1.5 | Subject to paragraph 7.4.10.1, facilitation of access to credit for Beneficiary Entities unable to access similar credit facilities through traditional means owing to a lack of credit history, high risk and/or lack of collateral; |
| 7.5.23.1.6 | Subject to paragraph 7.4.10.3, provision for training and/or mentoring to Beneficiary Entities which assist the Beneficiary Entities to increase their operational and/or financial capacity; and |
| 7.5.23.1.7 | Subject to paragraph 7.4.10.1.4, the maintenance by the Measured Entity of an Enterprise Development and Supplier Development unit which focuses exclusively on support of Beneficiary Entities or candidate Beneficiary Entities. |
| 7.5.23.2 | The creation and/or development of the capacity of Beneficiary Entities which will enable them to manufacture and produce goods and/or provide services previously not available in the Republic of South Africa, may constitute a Qualifying Enterprise Development and Supplier Development Contribution, and will be measured as the rand value of monetary contributions made as well as investments into, loans made to or guarantees given for Beneficiary Entities. |
| 7.5.23.3 | Provision of preferential credit facilities to a Beneficiary Entity by a Measured Entity may constitute a Qualifying Enterprise Development and Supplier Development Contribution. Examples of such contributions include without limitation: |
| (a) | Provision of finance to Beneficiary Entities at rates of interest below the applicable rate. Such contributions will be measured as the value of the differential between the actual interest rate provided to the Beneficiary Entity and the applicable rate; |
| (b) | Relaxed security requirements or absence of security requirements for Beneficiary Entities unable to provide security for loans. Such contributions shall be measured as being 3% (three percent) of any positive differential between the initial capital value of the loan and the value of security taken; and |
| (c) | Settlement of accounts with Beneficiary Entities over a shorter period of time in relation to the Measured Entity’s normal payment period, provided that the shorter period is no longer than 15 days. Preferential provided that the shorter period is no longer than 15 days. Preferential payment terms which extend beyond 15 days will not qualify as Qualifying Enterprise Development and Supplier Development Contributions. |
| 7.5.23.4 | Provision of training and/or mentoring to a Beneficiary Entity by a Measured Entity may constitute a Qualifying Enterprise Development and Supplier Development Contribution. Such contributions will be measured by quantifying the cost of time spent by staff management of the Measured Entity in carrying out such initiatives. Any travel or commuting time may not be included in this cost. Furthermore, a clear justification has to be supplied with respect to the calculation of such time costs incurred, commensurate with the level of seniority and expertise of the trainer or mentor. Common forms of such contribution include without limitation: |
| 7.5.23.4.1 | Professional and consulting services; |
| 7.5.23.4.2 | IT services; and |
| 7.5.23.4.3 | Any other services which help to increase the entity’s financial and/or operational capacity and which have not also been accounted for under skills development. |
| 7.5.23.4.4 | The maintenance of an Enterprise Development and Supplier Development unit by the Measured Entity may constitute a Qualifying Enterprise Development and Supplier Development Contribution. Common examples of such contributions include without limitation the salaries and wages and other expenses involved in the operation of such Enterprise Development and Supplier Development unit. Notwithstanding the afore going, only that portion of salaries and wages which relate to the time spent by the staff and other expenses related to the promotion and implementation of Enterprise Development and Supplier Development in respect of Beneficiary Entities should be taken into consideration under Enterprise Development and Supplier Development contributions. |
| 7.5.23.5 | Measurement of Enterprise Development and Supplier Development Contributors |
| 7.4.10.5.1 | A measured Entity receives a score for Enterprise Development and Supplier Development in proportion to the extent that it meets the compliance target. |
| 7.4.10.5.2 | Qualifying Contributions are measurable using the formula "A" in Annexure 400(B) |
| 7.4.10.5.3 | Measured entities’ measurement of overspending on annual contributions shall be according to Code of Good Practice guidelines, which allows for the averages of the contribution over 3 years’ life span of the project (for example funding a agro-processing pack house facility that has high establishment cost in year 1). Measured entities’ contributions can thus be recognised in both year 1 & 2. |
Agri-Industry undertakes to:—
| (a) | Proactively identify and implement targeted procurement strategies and policies to realise AgriBEE objectives and to meet preferential procurement targets; |
| (b) | Report annually on all preferential procurement spent; |
| (c) | Strengthen and accelerate the development of the operational and financial capacity of Black entrepreneurs; |
| (d) | Provide mentoring, access to inputs, credit, infrastructure, markets, and technology and extension services where applicable. Mentoring, as part of the enterprise development element, refers to the provision of technical and/or general business assistance and support to Black emerging farmers, land reform beneficiaries and Black entrepreneurs; |
| (e) | Support land reform beneficiaries and Black owned EMEs to create sustainable businesses through the transfer of specialised skills in mentorship programmes. Such support [as well as the types of support described in paragraph (d) above] will be eligible for points under the enterprise development element provided it is quantified to a Rand value in terms of the opportunity cost of time spent on mentoring and/or other enterprise development endeavours. Support to land reform beneficiaries will enjoy enhanced recognition at a multiple of 1.5 of the Rand value of the actual contribution. Enterprises should engage with the relevant SETA for information on such learning interventions; |
| (f) | Commit cumulative enterprise development contributions which assist and accelerate the development of black entrepreneurs, as a percentage of cumulative net profit after tax measured from the Inception Date to the date of measurement as a criterion for measurement; |
| (g) | Provide (or Give) Enhanced Recognition for certain types of enterprise development initiatives, at a multiple of the Rand value of the actual contribution. These initiatives and their corresponding multipliers are listed below; and |
| (h) | Progressively provide preferred supplier status to QSEs and EMEs, including the supply of services and goods, in accordance with the requirements of the AgriBEE Scorecard. |
Government undertakes to:—
| (a) | 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; |
| (b) | Provide Black People and QSEs preferred supplier status in the procurement of goods and services; |
| (c) | 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; |
| (d) | Utilise all legislative and other measures available to it, including preferential procurement, to influence the attainment of broad-based BEE objectives; |
| (e) | Enterprise development refers to the establishment, support and integration of Black Entrepreneurs in mainstream business processes. Support services such as access to finance, infrastructure, information and knowledge systems, are core pillars of sustainable empowerment initiatives; |
| (f) | Ensure the creation of an enabling environment to support agriculture; |
| (g) | Continue with, and further develop, the implementation of the Comprehensive Agricultural Support Programme (‘CASP’) and other government programmes; |
| (h) | Implement MAFISA (Micro-Agricultural Financial Institutions of South Africa) and other government financing facilities to further enterprise development; |
| (i) | Establish Public-Private Partnerships to improve service delivery; |
| (j) | Activate Land Bank funding opportunities and financial products for black farmers; and |
| (k) | Implement the AgriBEE Fund to facilitate equity and agro-processing initiatives in the Agricultural sector. |
|
Enterprise and Supplier Development Initiative |
Multiple |
|
Initiatives which directly contribute towards new job(s) created in the associate enterprise. If there increase of 100% of jobs created on the base, the measured entity gets full points of 1.5 multiple factor. Pro rata will apply if the increase is less than 100%. |
1.5 |
|
Initiatives which assist the development of beneficiary entities to produce goods and/or services not previously produced or manufactured in South Africa. An agreement between Measured Entity and beneficiary is required. |
1.5 |
|
Contributions in respect of warehousing fund (provided these funds do not own an equity interest in the Measured Enterprise). This excludes statutory levies and third party enterprise and supplier development facilitators. |
1.25 |
|
Support to Land Reform beneficiaries (individuals that have benefited from Land Reform Programmes including: Redistribution, Tenure Reform and Restitution) and other black owned enterprises in terms of mentoring or extension services (12 days per annum spend doing skills development with the beneficiary), capital provision, input supply and market access opportunities, access to technology and infrastructure. |
1.5 |
For the purpose of verification, new Enterprise Development Initiatives or projects are defined as green field projects that include, but are not limited to, those that support the Industrial Policy Action Plan. Points will be scored for permanent employees based on the following sliding scale: Year 1: 100% points; Year 2: 70% points and Year 3: 30% points. Additionally, should there be a percentage decrease in employment; there would be a pro rata percentage decrease in percentage points scored.
