B-BBEE — B-BBEE Sector Code: Amended ICT Sector Code (source: https://www.thedtic.gov.za/wp-content/uploads/Amended_ICT_Code.pdf) 4   No. 40407 GOVERNMENT GAZETTE, 7 NOVEMBER 2016 Government Notices • Goewermentskennisgewings Telecommunications and Postal Services, Department of/ Telekommunikasie en Posdienste, Departement van GENERAL NOTICE AND POSTAL SERVICES DEPARTMENT OF TELECOMMUNICATIONS NO. 1387  NOTICE OF 2016 07 NOVEMBER 2016 1387 Broad-Based Black Economic Empowerment Act (53/2003) as amended by B-BBEE Act (46/2013): Codes of good practice on broad based black economic empowerment 40407 DEPARTMENT OF TRADE AND INDUSTRY CODES OF GOOD PRACTICE ON BROAD BASED BLACK ECONOMIC EMPOWERMENT L Or Rob Davies, Minister of Trade and Industry, hereby issue the Amended Information and Communication Technology Sector Code (the ICT Sector Coder) in terres of section 9 (1) of the Broad -rased Black Economic Empowerment Act, (Act No 53 of 2003) as amended by. B -BBEE Act 46 of 2013, and determine that these Codes come into effect on the dale of this publication. É Dr Rob Davies, MP Minister of Trade and Industry 3 November 2016 This gazette is also available free online at www.gpwonline.co.za STAATSKOERANT, 7 NOVEMBER 2016 No. 40407   5 B-BBEE ICT SECTOR COUNCI L AMENDED BROAD-BASED BLACK ECONOMIC EMPOWERMENT (B-BBEE) ICT SECTOR CODE This gazette is also available free online at www.gpwonline.co.za 6   No. 40407 GOVERNMENT GAZETTE, 7 NOVEMBER 2016 PREAMBLE Introduction The ICT Sector stakeholders comprising the Broadcasting, Electronics, Information Technology and Telecommunications sub-sectors; together with participants from the social partners, namely Government, Labour, Community, and ICASA, initiated a process of developing a Black Economic Empowerment Code for the ICT Sector. The Need for Economic Empowerment ● Under the previous apartheid system, a plethora of policies and legislation was promulgated with the sole objective of denying black people, including black women, access to and control of South Africa’s economic productive resources and skills based purely on race and gender considerations; ● More than two decades after the demise of this apartheid system, and in spite of the promulgation of a broad range of policy and legislative instruments introduced by the democratic Government aimed at redressing the imbalances of the past, the majority of South Africans are still excluded from ownership and control of economically productive assets and possession of strategic skills to the detriment of economic development, employment creation and poverty eradication; ● Growth and prosperity in South Africa’s economy has not been realized to its full potential due to a lack of meaningful participation by the majority of black South Africans, including black women, in the national economy, and particularly in the ICT sector; ● The Broad Based Black Economic Empowerment Act 53 of 2003 (B-BBEE Act) as amended by B-BBEE Act 46 of 2013 and Government’s Amended Black Economic Empowerment Codes of Good Practice, aim to address inequities resulting from the systematic exclusion of black people from meaningful participation in the economy. The Amended ICT Sector Code aims to do this for the ICT sector. AICT-20160909v20 AMENDED B-BBEE ICT SECTOR CODE PREAMBLE ii This gazette is also available free online at www.gpwonline.co.za STAATSKOERANT, 7 NOVEMBER 2016 No. 40407   7 ICT Sector Resolution Recognising the cross-cutting nature of ICTs and their role in the social and economic development of our country; Therefore, we, the ICT Sector stakeholders, resolve and commit to: ● The objectives of the B-BBEE Act as amended ● Promote the effective implementation of B-BBEE in the ICT sector; ● Bridge the “digital divide” by actively promoting access to ICTs; ● Stimulate and support growth in the ICT sector; ● Advance economic and social transformation in the ICT sector; ● Contribute towards the reduction of unemployment and poverty alleviation; ● Support skills development and training initiatives; ● Foster equity and address the legitimate economic aspiration of all South Africans; ● Provide an enabling environment conducive to transparency, fairness, and consistency when adjudicating on matters related to B-BBEE in the ICT sector; and ● Comply with the requirements of the ICT Sector Code as defined hereunder and where possible meet and exceed targets across the sector. Having initiated the process of amending the B-BBEE ICT Sector Code of 06 June 2012, we therefore gazette this Amended ICT Sector Code as a Code of Good Practice for the ICT Sector in terms of Section 9(1) of the B-BBEE Act 53 of 2003 as amended. B-BBEE ICT Sector Code shall remain in effect until amended, substituted or repealed under Section 9 of the B-BBEE Act 53 of 2003 as amended. AICT-20160909v20 AMENDED B-BBEE ICT SECTOR CODE PREAMBLE iii This gazette is also available free online at www.gpwonline.co.za 8   No. 40407 GOVERNMENT GAZETTE, 7 NOVEMBER 2016 INDEX FOR THE AMENDED B-BBEE ICT SECTOR CODE (AICT) Index of Code Series Code Series Code Title AICT000 Framework for measuring Broad-Based Black Economic Empowerment AICT100 Measurement of the Ownership Element of Broad-Based Black Economic Empowerment AICT200 Measurement of the Management Control Element of Broad-Based Black Economic Empowerment AICT300 Measurement of the Skills Development Element of Broad-Based Black Economic Empowerment AICT400 Measurement of the Enterprise and Supplier Development Element of Broad-Based Black Economic Empowerment AICT500 Measurement of the Socio-Economic Development Element of Broad- Based Black Economic Empowerment AICT600 Measurement of Qualifying Small Enterprises of Broad-Based Black Economic Empowerment Index for Statements Statement Code Series Statement Title Number AICT000 Code Series AICT000 General principles and the Scorecard AICT004 Code Series AICT000 Scorecards for specialised Enterprises AICT100 Code Series AICT100 The general principles for measuring Ownership AICT102 Code Series AICT100 Recognition of the Sale of Assets AICT103 Code Series AICT100 The recognition of Equity Equivalents for Multinationals AICT200 Code Series AICT200 The general principles for measuring Management Control AICT300 Code Series AICT300 The general principles for measuring Skills Development AICT400 Code Series AICT400 The general principles for measuring Enterprise and Supplier Development AICT500 Code Series AICT500 The general principles for measuring Socio- Economic Development AICT-20160909v20 AMENDED B-BBEE ICT SECTOR CODE PREAMBLE iv This gazette is also available free online at www.gpwonline.co.za STAATSKOERANT, 7 NOVEMBER 2016 No. 40407   9 Index for Qualifying Small Enterprises Statement Code Series Statement Title Number AICT600 Code Series AICT600 The Qualifying Small Enterprises Scorecard and Exempted Micro-Enterprises AICT601 Code Series AICT601 Ownership for Qualifying Small Enterprises AICT602 Code Series AICT602 Management Control for Qualifying Small Enterprises AICT603 Code Series AICT603 Skills Development for Qualifying Small Enterprises AICT604 Code Series AICT604 Enterprise and Supplier Development for Qualifying Small Enterprises AICT605 Code Series AICT605 Socio-Economic Development for Qualifying Small Enterprises AICT-20160909v20 AMENDED B-BBEE ICT SECTOR CODE PREAMBLE v This gazette is also available free online at www.gpwonline.co.za 10   No. 40407 GOVERNMENT GAZETTE, 7 NOVEMBER 2016 AMENDED B-BBEE ICT SECTOR CODE SERIES AICT///: FRAMEWORK FOR MEASURING BROAD-BASED BLACK ECONOMIC EMPOWERMENT STATEMENT AICT''': GENERAL PRINCIPLES AND THE SCORECARD Issued under section * (() of the Broad-Based Black Economic Empowerment (B-BBEE) Act OP of &''P as amended. Arrangement of this statement (. Objectives of this statement ........................................................................ & &. Key principles .............................................................................................. & P. Application of the Amended B-BBEE ICT Sector Code .............................. P W. The Elements of B-BBEE in terms of the Scorecard................................... W O. The Amended ICT Sector Scorecard .......................................................... O ). Enhanced recognition for certain categories of Black People ..................... X X. Framework for Reporting by Measured entities and B-BBEE Verification Professionals ....................................................................................................... X 5. Adjustment of Thresholds ........................................................................... X *. Amendments and Duration of the Amended B-BBEE ICT Sector Code ..... X AICT-&'()'*'*v&' AMENDED B-BBEE ICT SECTOR CODE SERIES AICT''' STTAICT''' ( - 5 This gazette is also available free online at www.gpwonline.co.za STAATSKOERANT, 7 NOVEMBER 2016 No. 40407   11 8. Objectives of this statement The objectives of this statement are to: (.( Specify interpretative principles of B-BBEE: (.& Specify the application of the Amended B-BBEE ICT Sector Code and the basis for measurement under the Amended B-BBEE ICT Sector Code; (.P Specify the qualifying thresholds for businesses to qualify as Exempted Micro-Enterprises (EME) or Qualifying Small Enterprises (QSE); (.W Specify the method of measuring Start-up Enterprises; (.O Specify the elements of B-BBEE measurable under the Scorecard; (.) Specify the Scorecard; (.X Specify the basis for determining compliance by entities with the Amended B-BBEE ICT Sector Code; (.5 Define the duration for the applicability of the Amended B-BBEE ICT Sector Code. H. Key principles &.( The fundamental principle for measuring B-BBEE compliance is that substance takes precedence over legal form. &.& In interpreting the provisions of the Amended B-BBEE ICT Sector Code any reasonable interpretation consistent with the objectives of the Act and the B-BBEE Strategy must take precedence. &.P The basis for measuring B-BBEE initiatives under the Amended B-BBEE ICT Sector Code is the B-BBEE compliance of the measured entities at the time of measurement. &.W Any misrepresentation or attempt to misrepresent any enterprise’s true B-BBEE Status may lead to the disqualification of the entire scorecard of that enterprise. &.O Initiatives which split, separate or divide enterprises as a means of ensuring eligibility as an Exempted Micro-Enterprise, a Qualifying Small Enterprise or a Start-Up Enterprise are a circumvention of the Act and may AICT-&'()'*'*v&' AMENDED B-BBEE ICT SECTOR CODE SERIES AICT''' STTAICT''' & - 5 This gazette is also available free online at www.gpwonline.co.za 12   No. 40407 GOVERNMENT GAZETTE, 7 NOVEMBER 2016 lead to the disqualification of the entire scorecard of those enterprises concerned. &.) Any representation made by an entity about its B-BBEE compliance must be supported by suitable evidence or documentation. An entity that does not provide evidence or documentation supporting any initiative, must not receive any recognition for that initiative. &.X Wherever a Standard Valuation Method applies to measuring an indicator, the same standard should apply, as far as reasonably possible, consistently in all other applicable calculations in this statement. &.5 Where the Amended B-BBEE ICT Sector Code is silent on certain provisions, the provisions of the Amended Generic Code shall take precedence. M. Application of the Amended B-BBEE ICT Sector Code P.( The following entities are measurable under the Amended B-BBEE ICT Sector Code: P.(.( All persons, organisations and entities operating in the ICT Sector in South Africa; P.(.& All public entities in terms of the B-BBEE Act OP of &''P as amended including those listed in schedule (, schedule & or schedule P (Parts A, B and C) of the Public Finance Management Act that fall within the ICT sector; P.(.P Any public entity listed in schedule P (Parts B and D) which are trading entities which undertake any business with any organ of state, public entity or any other enterprise that falls within the ICT Sector; and P.& The basis for measuring the B-BBEE compliance of an entity in terms of paragraph P.( is- P.&.( Paragraph W of the Amended Codes of Good Practice, in the case of an Exempted Micro-Enterprise (EME); P.&.& The QSE statements in Code Series AICT)'', in the case of a Qualifying Small Enterprise (QSE); P.&.P The Generic Scorecard, in the case of other enterprises. AICT-&'()'*'*v&' AMENDED B-BBEE ICT SECTOR CODE SERIES AICT''' STTAICT''' P - 5 This gazette is also available free online at www.gpwonline.co.za STAATSKOERANT, 7 NOVEMBER 2016 No. 40407   13 M.M Priority Elements, Subminimum and Discounting Principle The Priority Elements are as follows: P.P.( Ownership The subminimum requirement for Ownership is W'% of Net Value (W'%) of the 5 points) based on the Time Based Graduation factor as provided in Annexure (''(E) P.P.& Skills Development A Measured Entity must achieve a minimum of W'% of the total targets set out in each of paragraphs &.(.( and &.(.& of the Skills Development Element of Code Series AICTP'' Statement AICT P''. Non-compliance with this subminimum requirement will result in the achieved B-BBEE status level being discounted. P.P.P Enterprise Supplier development A Measured Entity must achieve a minimum of W'% of each of the targets set out in &.( (i.e. (' of &O points), &.& (i.e. W of (' points) and &.P (i.e. ) of (O points) excluding bonus points of the Enterprise and Supplier Development Scorecard Code Series AICTW'' and Statement AICTW''. R. The Elements of B-BBEE in terms of the Scorecard W.( The Ownership Element, as set out in Code Series AICT('', measures the effective ownership of enterprises by Black People. W.& The Management Control Element, as set out in Code Series AICT&'', measures the effective control of enterprises by Black People. W.P The Skills Development Element, as set out in Code Series AICTP'', measures the extent to which employers carry out initiatives designed to develop the competencies of Black People. W.W The Enterprise and Supplier Development Element, as set out in Code Series AICTW'', measures the extent to which Enterprises carry out AICT-&'()'*'*v&' AMENDED B-BBEE ICT SECTOR CODE SERIES AICT''' STTAICT''' W - 5 This gazette is also available free online at www.gpwonline.co.za 14   No. 40407 GOVERNMENT GAZETTE, 7 NOVEMBER 2016 initiatives intended to assist and accelerate the development and sustainability of other enterprises that are at least O(% Black Owned. W.O The Socio-Economic Development (SED) and Sector Specific Contributions Element, as set out in Code Series AICTO'', measures the extent to which enterprises carry out general and ICT sector specific initiatives that contribute towards SED and that promote access to the economy for black people. All SED spend must be on ICT Sector Specific Initiatives. S. The Amended ICT Sector Scorecard O.( The following table represents the Amended B-BBEE ICT Sector Scorecard and contains the: O.(.( Elements of the Scorecard: O.(.& Weightings, and O.(.P Code Series reference that specify the mechanisms for measurement and calculation of each of the Elements of the Scorecard (Code Series AICT(('' – O'')) AICT-&'()'*'*v&' AMENDED B-BBEE ICT SECTOR CODE SERIES AICT''' STTAICT''' O - 5 This gazette is also available free online at www.gpwonline.co.za STAATSKOERANT, 7 NOVEMBER 2016 No. 40407   15 Element Weighting points Code series reference Ownership &O AICT('' Management Control &P AICT&'' Skills Development &' AICTP'' Enterprise and Supplier Development AICTW'' Preferential Procurement &O Supplier Development (' Enterprise Development (O Socio-Economic Development (& AICTO'' initiatives O.& Based on the overall performance of a Measured Entity using the Scorecard, it receives one of the following B-BBEE Status-: B-BBEE Status Qualification B-BBEE recognition level Level One Contributor ≥(&' points on the ICT Scorecard (PO% Level Two Contributor ≥((O but <(&' points on the ICT Scorecard (&O% Level Three Contributor ≥((' but < ((O on the ICT Scorecard (('% Level Four Contributor ≥('' but < ((' on the ICT Scorecard (''% Level Five Contributor ≥*O but <('' on the ICT Scorecard 5'% Level Six Contributor ≥*' but <*O on the ICT Scorecard )'% Level Seven Contributor ≥XO but <*' on the ICT Scorecard O'% Level Eight Contributor ≥OO but