AgriBEE INDABA 6 Dec 2005

1
AgriBEE INDABA6 Dec 2005

• Proposal for an AgriBEE Charter

2
Index

• 5 Stages of AgriBEE process
• Where are we in recommended process
• Section 12 and 9 Charters/Codes
• Structure of draft AgriBEE Charter
• Tasks for Breakaway Sessions

3
5 Stage Process

• Aug 2002 - driven by the Reference Group
• July 2004 - AgriBEE Framework launched by
  Minister
• Oct 2005 - Draft AgriBEE Charter recommended to
  Minister
• Indaba 6,7 Dec
• Follow up

4
AgriBEE Framework process

• Wide publicity, including provincial launches
• An AgriBEE Steering Committee (SC) appointed to
  consult stakeholders, lead key strategic
  approaches and report
• Public comments received until Dec 2004
• The SC undertook consultations, as mandated
• The dti released BBBEE Codes of Good Practice
  (CGP) in June 2005
• The SC engaged with CGP directives and utilised
  them in the development of its recommendations
• SC presented draft AgriBEE Charter and
  large-scale scorecard to Minister 28 Oct 2005

5
AgriBEE Framework process

• Commentary process transparent with 55 written
  inputs received
• Consultation process inclusive, broad, including
  organised agriculture, labour, youth, women and
  provinces
• AgriBEE Framework is accepted in principle
• Charter should be aligned with the CGP
• Certain Codes of Good Practice remain presently
  outstanding, e.g. for SMMEs
• Scorecard should run from 2007 to 2017
• Need to publish draft AgriBEE Charter for comment
• Need for an Indaba in Dec
• Propose first phase Section 12 Charter, then
  Section 9 Sector Code

6
Draft AgriBEE Charter

• Draft, including large scale scorecard published
  on 2 Nov
• Negotiations identified with stakeholders
• Agri SA
• NAFU SA
• TAU SA
• ABC, SA Processors Assoc, SACOB
• Banking Council
• Labour
• Wine and sugar sectors (legislation)
• Women, youth disabled groups
• Indaba planned for 6,7 Dec

7
AgriBEE Charter negotiations

• Scope of the Charter requires refinement
• One main sector charter, limited sub-sector
  Charters
• Single balanced scorecard, but weightings taking
  into account farming/ non-farming
• The scorecard requires further interrogation
• How to deal with issues affecting implementation,
  e.g. land restitution
• SMMEs need to be addressed

8
AgriBEE Charter negotiations (cont.)

• Need to align other policies, e.g. funding and
  support with AgriBEE Charter
• All stakeholders need to fully digest the CGP
• Need for certain clarifications by the dti
• need for follow up communication
• Impact studies could be done by AgriBEE Council
• Cost of implementation to be kept down
• Time constraints in preparations and negotiations

9
Process
A
C
B
You are now here
10
Sector Charter (Section 12)

• Expression of commitment to transformation
• No Legal Status
• Developed by major stakeholders in sector
• Advances objectives of Act

11
Sector Code (Section 9)

• To be signed by Minister of Agriculture and
  industry associations
• Independent third party analysis
• Justified, defines scope
• advances BEE Act
• All scorecard elements
• consistent with CGP
• addresses funding to meet ownership enterprise
  development targets
• Addresses sector challenges vision
• Adresses Charter Council
• It is legally binding

12
Ownership

• Weighting 20
• Targets for voting rights economic interest for
  categories of black people 10-25
• Bonus points for land transfer contributions
• ---------------------------------
• Empowerment starts with improved land access and
  tenure security
• Distinction between land and enterprise ownership
• Voluntary sales of land
• 30 commercial land target agreed
• Lead to viable and sustainable enterprises
• Will develop diversity of enterprise models

13
Management Control (see also Employment Equity)

• Weighting 10
• Exercisable voting rights at board and executive
  level 40-50, women 20-25
• ---------------------------------
• Undertaking to promote black participation, incl.
  Women, at executive and board levels

14
Employment Equity

• Weighting 10
• EE 50, women 50
• --------------------------------
• Proactive employment of black, incl. Women,
  managers
• Bonus points for employment of disabled and youth

15
Skills Development

• Weighting 20
• Investment as of payroll 3, bias toward
  literacy numeracy
• Learnerships and interns 3
• Qualifying mentorship programmes
• --------------------------------
• Require more resources for expanding human
  capital pool for sustained productivity ,
  entrepreneurship and skills

16
Preferential Procurement

• Weighting 20
• 50
• ---------------------------------
• Proactive AgriBEE procurement
• Annual spend reporting
• Progressively provide preferential supplier
  status

17
Enterprise Development

• Weighting 10
• Cumulative contribution to enterprise development
  as of average nett profit 10, or 20 of land
  or assets leased
• long term leases (gt5 years)
• ---------------------------------
• Recognise access to support services core to
  sustainable empowerment
• Develop operational and financial capacity
• Financial contribution to enterprise development
• Lease agricultural land

18
Rural development and poverty reduction

• Weighting 10
• Cumulative contribution to social development as
  of nett profit 10, or land made available to
  farm workers 10
• ---------------------------------
• Contribute to social development and industry
  specific initiatives, e.g. housing, recreational
  and health facilities, transport etc
• Make agricultural land available to farm workers

19
Monitoring and evaluation

• Each institution fully discloses and reports
  annually
• All elements of scorecard
• ME centres to be established
• Link AgriBEE baselines and measurements to census
  periods
• Independent AgriBEE Council to be established
• Targets to be reviewed and corrected every 3
  years
• Comprehensive evaluation after 5 years

20
Tasks for Breakaway Sessions

• Focus on improvements to the draft Charter
• Address specifically
• In principle agreement of the draft Charter
• Identify any gaps for attention
• How should the Charter cover the value chain
• SMMEs
• Scorecard weightings/targets where possible
• Any further work that needs to be done
• A way forward, e.g. planning for implementation,
  organizational and institutional arrangements,
  funding
• Road shows and further clarification required
• April launch of AgriBEE Charter