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

Codes of Good Practice on Black Economic Empowerment

Code Series 000: Framework for Measuring Broad-Based Black Economic Empowerment

Statement 003 : Guidelines for Developing and Gazetting of Transformation Charters and Sector Codes

5. Recommended Model for Developing Transformation Charters


5.1) This paragraph provides guidance to sectors wishing to develop Transformation Charters. It is not a legal requirement.


5.2) Recommended Model for developing Transformation Charters:


5.2.1) The following represents the matters needing consideration by sectors developing a Transformation Charter for gazetting under section 12 of the Act: the sector seeking to gazette their Transformation Charter should interact or transact with the organs of state or public entities; there should be common commercial and other characteristics within the entities forming part of the proposed sector; the sector should be significant having regard to: the national strategic importance of the sector as determined by government; and the volume and value of transactions taking place between the sector and organs of state or public entities collectively - this is measurable by reference to the total volume and value of transactions taking place within the sector.


5.2.2) The following represents a recommended model for developing a Transformation Charter: Public Proclamation of Charter: there must be a public proclamation of the object of developing a Transformation Charter. Setting of Charter Mandate: the initiators of the Charter process propose setting the mandate of the Charter and the Charter's overall objectives. These initiators should then present a proposed mandate for the Charter, to relevant stakeholders for consideration and comment. The final mandate of the Charter must reflect the concerns and needs of the stakeholders. Appointment of a Steering Committee: the initiators of the Charter process appoint a Steering Committee. This Steering Committee should represent relevant groups of stakeholders and should consist of senior and Influential members of entities, organisations or departments in the sector. Appointment of relevant Working Groups: the Steering Committee appoints several working groups to aid in drafting the Charter. Element specific working groups are desirable. First Draft Based on recommendations by the appointed Working Groups: the Steering Committee must compile the first draft of the Charter for presentation to stakeholders. Consultation with Stakeholders: the Steering Committee will communicate the key elements of the first draft of the Transformation Charter, including a draft of its scorecard to stakeholders.


5.3) Recommended Consulting Process, Representatives and Stakeholder Identification:


5.3.1) The consultation process for developing a Transformation can take any of the following forms: a major gathering of the key stakeholders in the sector; workshops addressing particular issues in the Transformation Charter; sector-wide road shows; or other interactive mechanisms that would ensure effective communication with and participation by the relevant stakeholders.


5.3.2) The relevant stakeholders may include: key enterprises within the sector; industry bodies for the sector and the relevant chamber of commerce; government, and in particular, the relevant government departments having jurisdiction over the particular sector; labour bodies or the relevant trade unions; industry regulators and civil society organisations; and any others with a relevant interest in the sector;


5.3.3) The steering committee should have equitable representation to enable participation by all the different stakeholders in the Transformation Charter formulation.


5.3.4) Implementation of innovative mechanisms for ensuring that under resourced parties contribute in the key strategic decisions is a key consideration, especially in the following stages: setting up various working groups; setting the mandates of tile respective charter committees; actively taking part in the various charter committees; outlining the key principles and qualitative undertakings of the Transformation Charter; setting targets and weightings for the sector as contained in the balanced B-BBEE scorecard; providing for implementation reporting and monitoring mechanisms; presentation of the Transformation Charter to the Advisory Council, the ministry in the government responsible for the relevant sector and to the Minister of Trade and Industry. setting the mandate and the powers of the Charter Council; ensuring application of good corporate governance principles in the Steering Committee or any executive body reporting to the Charter Council.


5.4) The Role of Charter Councils:


5.4.1) The following represents a recommended model for setting up Charter Councils: equitable composition of stakeholders in the members of the Charter Council: ensuring application of good corporate governance principles in the Charter Council.


5.4.2) The functions of the Charter Council may include: to provide guidance on sector-specific matters effecting B-BBEE in entities within the sector; to compile reports on the status of broad-based black economic empowerment within the sector; and to share information with sector members, approved accreditation agencies or the Minister.


5.4.3) The Charter Councils should report to the Minister and to the Advisory Council on progress made by the sector subject to the relevant Transformation Charter. Such reports should typically contain qualitative and quantitative information about sectoral performance,including details about all the elements of the sector's B-BBEE balanced scorecard.