Caird Code Rule #2 – Which charter is applicable to your business

The DTI's codes of good practice (COGP) are there as a generic scorecard that all companies can use in the absence of an industry charter. These COGP were the first set to be published under section 9 of the B-BBEE Act. Since then four other charters have been gazetted under section 9 – Integrated Transport, Forestry, Tourism and Construction. A scorecard from a section 9 charter is the only one that government will accept (when they align the PPPFA and the BEE Act) in tenders and the like. The private sector is a little less picky – they are able to use both section 9 and section 12 scorecards in calculating preferential procurement. The only significant section 12 charter is the FSC. Other section 12 charters are the Property Sector Charter, Agri-BEE Charter and the Marketing, Advertising and Communication (MAC) Sector Charter.

The DTI's generic codes came into effect on the 9^th of February 2007 – we've almost had them for three years now. This means that every entity that chooses to produce a BEE scorecard can do one under the generic codes. The other charters came later and this has led to a fair amount of predictable confusion as to when they come into effect. I have discussed this with Kevin and we both tend to agree that they come into effect on the date they were gazetted and that all measurements from that date must be based on the sectoral charter – everything before that can only be measured on the DTI's generic codes. For example the Construction Code was published on the 5^th of June 2009 (this date is different to the date that Mpahlwa signed the covering note), we can therefore expect the first construction scorecards in June 2010 (this great event is likely to be eclipsed by the world cup).

Here is an overview of each charter

Tourism Charter

The various tourism scorecards are summarised here.

Effective date:		22 May 2009
First scorecard due:		May/June 2010
EME threshold:		≤R2.5m
QSE threshold:		R35m
Applicable to:		All parts of the tourism value chain including: Hotels, resort properties and timeshare, B&Bs; guesthouses, games lodges, backpackers and hostels. All restaurants, conference venues, professional catering, attractions, consulting and professional service companies Tour wholesalers, tour operators, travel agents, tourist guides, car rental companies, coach operators

 

Construction Charter

I blogged on the applicability of this charter and how I couldn't be sure whether manufacturing companies (like PPC) are bound by the construction charter or the DTI's codes. You can download the various construction scorecards here

Effective date:		5 June 2009
First scorecard due:		June 2010
EME threshold:	BEPs ≤R2.5m; Contractors ≤R1.5m
QSE threshold:	R35m
Applicable to:	If the majority of turnover is derived as a result of construction related activities the charter applies. If turnover is derived equally between construction related activity and other activities then the entity can chose which code they will use.

 

Forestry Charter

 

Effective date:	12 June 2009
First scorecard due:	June 2010
EME threshold:	≤5m
QSE threshold:	R35m
Applicable to:	Applies to all enterprises involved with the commercial forestry and first level processing of wood products including: Growers (plantations, nurseries and indigenous forests) Contractors (fire-fighters etc) Fibre (pulp, paper, woodchip etc) Sawmilling Poles (pole treatment) Charcoal   Expressly excludes non-timer forest enterprises like honey, mushrooms inter alia

 

Integrated Transport Charter(s)

 

Effective date:	21 August 2009
First scorecard due:	August/September 2010
EME threshold:	≤5m
QSE threshold:	Not specified but likely to be R35m (page 9 of the General Notice, Preamble and Definitions explains that all definitions not contained in the general notice section can be taken from the DTI's generic codes.
Applicable to:	Bus Commuter and Coach Services Taxi Industry Road Freight Public - Transport Maritime Transport and Services Industry Forwarding and Clearing Rail Domestic Aviation

 

Specialised entities

These are those entities that can't be owned, for instance government, section 21 companies, universities etc. Code 000, statement 004 of the DTI's generic codes covers these entities. The charters, other than the Tourism Charter which states (T)his charter are (sic) binding to all organs of state and public entities, organised labour,(sic) and communities involved with or interested in the tourism sector, are silent about these entities. The Tourism Charter fails to produce a specialised entities scorecard for those entities it lists. A conclusion has to be drawn that any section 21 company etc that finds itself in an industry covered by a charter must follow the DTI's generic codes. This is what I think the DTI's specialised enterprises scorecard looks like.

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