Dear Member

The Minister of Trade and Industry, Dr Rob Davies, invites members of the public to make inputs and comments on the Draft Amended Construction Sector Code which was gazetted in terms of Section 9 (5) of the Broad-Based Black Economic Empowerment (B-BBEE) Act 53 of 2003 as amended by B-BBEE Act 46 of 2013. The closing date for the 60-day commentary period is 28 December 2016.

In February this year Minister Davies repealed the old Construction Sector Code because it was not submitted on time to meet the deadline. Since then the Construction Sector Charter Council, with the support of both the Ministries for Public Works and of Trade and Industry, worked on developing a new sector code. Minister Davies says the Draft Amended Construction Sector Code is a culmination of that process and a step towards having a sector code for the construction sector.   

“The Construction Sector Code remains one of the key sector codes that affect domestic infrastructural development and, as such, it is one of the catalysts for the implementation of B-BBEE in the country.  One of the key unique features of the draft sector code is that the target for Black Ownership is set at 35% (32.5% for the first four years of implementation; thereafter 35%). This is higher than the ownership target for the Generic Codes and it is the second highest black ownership target, behind the Black Ownership target of 40% of the Media and Advertising Sector Code (MAC),” says Minister Davies.

Davies indicates that the draft Amended Construction Sector Code further stipulates that at least 50% of black shareholding needs to be held by professionals in order to discourage passive shareholding, which is incongruent with the new era of empowerment that encourages active participation of Black beneficiaries.

The Amended Construction Sector Code recognizes that the nature of the construction sector is that it is dominated by joint ventures and outsourcing. However, in order to ensure that outsourcing does not dilute actual benefits accruing to Black People, it stipulate that no more than 25% of the value of a contract can be outsourced to an entity or entities with a lower B-BBEE Status Level.

A great deal of effort went into aligning the code with the generic code and aligning the code with the specific needs of the construction industry.
Please provide comments to by 15 December 2016 in order to submit a combined response from SEIFSA members by 28 December 2016.


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