AgriBEE Transformation Charter AgriBEE Transformation Charter AgriBEE Transformation Charter AgriBEE Transformation Charter
Presentation to the Public Hearings on AgriBEE
DATE: 17 September 2010VENUE: Parliament – Cape Town
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Introduction
Scope of Application for the AgriBEE Charter
AgriBEE Elements
AgriBEE Beneficiary Base
Scorecards Variations: AgriBEE versus BBBEE
AgriBEE Scorecard: All Elements - Weights, Indicators &Targets
Enterprises Classification versus Compliance to the Scorecard
Enterprises’ Indicate AgriBEE Status and Procurement Recognition
Levels
SANAS Accredited Rating and Verification Agencies for Scorecard
Calculation
Presentation OutlinePresentation OutlinePresentation OutlinePresentation Outline
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Composition of the AgriBEE Charter Council
Progress made by the AgriBEE Charter Council
Progress report on the Study for EMEs and QSEs Thresholds
Challenges experienced by the AgriBEE Charter Council
Implementation of the AgriBEE Equity Fund
BBBEE compliance in the Agricultural Sector
Concluding Remarks
Way Forward
Presentation Outline (cont…)Presentation Outline (cont…)Presentation Outline (cont…)Presentation Outline (cont…)
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IntroductionIntroductionIntroductionIntroduction
• The AgriBEE Sector Charter is a statement of intent wherein stakeholders expressed their commitment towards the goals for broad-based transformation of the agricultural sector.
• It is the product of extended consultations and deliberations amongst sector and related stakeholders over a number of years, initiated by the launch of the AgriBEE Framework in July 2004.
• AgriBEE Charter was developed as guided by the Phase 1 & 2 BBBEE Codes of Good Practice, taking into effect:
- BBBEE Act No. 53 of 2003
- South African Strategic Plan for Agriculture of 2001
- Unique aspects specific to sector i.e. Land
• AgriBEE Charter was gazetted on 20 March 2008.
• AgriBEE Charter was then launched on 4 April 2008.
• AgriBEE Charter Council was inaugurated on 5 Dec 2008.
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Scope of Application for the Scope of Application for the AgriBEE Charter AgriBEE Charter
Scope of Application for the Scope of Application for the AgriBEE Charter AgriBEE Charter
The primary production of agricultural products;
The provision of inputs and services to enterprises engaged in the production of agricultural products;
The beneficiation of agricultural products whether of a primary or semi-beneficiated form; and
The storage, distribution, and/or trading and allied activities related to non-beneficiated agricultural products.
The scope of the AgriBEE Transformation Charter shall include any Enterprises which derives the majority of its turnover from:
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6
AgriBEE ElementsAgriBEE ElementsAgriBEE ElementsAgriBEE Elements
Transforming the
Commercial sub-sectors
Addressing challenges of the commercial & developing sectors
Addressing challenges of
developing sector
Ownership
Management
EmploymentEquity
SkillsDevelopment
PreferentialProcurement
EnterpriseDevelopment
Direct participation in
EconomicActivities
(Shareholders & Management
Team)
Development of Human
Capital(Current &
prospective employees)
Development & Investment in
Affirmable Enterprises
(Suppliers & communities)Poverty alleviation
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The Poverty Barrier
The Skills Barrier
The Business Barrier
The Opportunity Barrier
EmploymentEquity
RD, PA & CSI
Skills Development
PreferentialProcurement
Ownership& Management
Equitable Economic Opportunities
EnterpriseDevelopment
Emerging black middle class &
investors
Black entrepreneurs
Black workers, professionals,
graduates, school-leavers
Black unemployed &
rural poor
AgriBEE Beneficiary BaseAgriBEE Beneficiary BaseAgriBEE Beneficiary BaseAgriBEE Beneficiary Base
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No EmpowermentIndicator
AgriBEE Indicative Scorecard
Variance BBBEEGeneric
Scorecard
1 Ownership (Land and Equity) 20 points 0 20 points
2 Management Control 10 points 0 10 points
3 Employment Equity 10 points - 5 15 points
4 Skills Development 20 points + 5 15 points
5 Preferential Procurement 20 points 0 20 points
6 Enterprise Development 10 points - 5 15 points
7 Rural Development, Poverty Alleviation and CSI
10 points + 5 05 points
Scorecards Variations:Scorecards Variations:AgriBEE versus BBBEEAgriBEE versus BBBEEScorecards Variations:Scorecards Variations:AgriBEE versus BBBEEAgriBEE versus BBBEE
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Weight
Ownership
Management Control
Employment Equity
Skills Development
Preferential Procurement
Enterprise Development
Socio-Economic Development
20%
10%
10%
20%
10%
100%
20%
10% The environment
Your supply chain
Your company
AgriBEE ScorecardAgriBEE ScorecardAgriBEE ScorecardAgriBEE Scorecard
1010
Ownership (20 points)Ownership (20 points)Ownership (20 points)Ownership (20 points)
1111
Management Control (10 points)Management Control (10 points)Management Control (10 points)Management Control (10 points)
1212
Employment Equity (10 points)Employment Equity (10 points)Employment Equity (10 points)Employment Equity (10 points)
1313
Skills Development (20 points)Skills Development (20 points)Skills Development (20 points)Skills Development (20 points)
1414
Preferential Procurement (20 points)Preferential Procurement (20 points)Preferential Procurement (20 points)Preferential Procurement (20 points)
1515
Enterprise Development (10 points)Enterprise Development (10 points)Enterprise Development (10 points)Enterprise Development (10 points)
1616
Rural Development, Poverty Alleviation and Rural Development, Poverty Alleviation and Corporate Social Investment (10 points)Corporate Social Investment (10 points)
Rural Development, Poverty Alleviation and Rural Development, Poverty Alleviation and Corporate Social Investment (10 points)Corporate Social Investment (10 points)
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Exempted Micro Enterprises (EMEs) have an annual turnover of less than R5 million. They are FULLY EXEMPTED from complying with the Codes, and are considered fully empowered. They automatically have a Level 4 Contribution Level or status, and are considered at Level 3 if they are also black-owned.
Qualifying Small Enterprises (QSEs) have an annual turnover of more than R 5 million, but less than R 35 million. They can CHOOSE any four out of the seven elements of the scorecard, and each element is weighted equally at 25%.
Large enterprises have an annual turnover of more than R 35 million, and they have to comply with ALL seven components of the Scorecard.
Enterprises Classification vs. Enterprises Classification vs. Compliance to the AgriBEE ScorecardCompliance to the AgriBEE Scorecard
Enterprises Classification vs. Enterprises Classification vs. Compliance to the AgriBEE ScorecardCompliance to the AgriBEE Scorecard
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Enterprises’ Indicate AgriBEE Status and Enterprises’ Indicate AgriBEE Status and Procurement Recognition LevelsProcurement Recognition Levels
Enterprises’ Indicate AgriBEE Status and Enterprises’ Indicate AgriBEE Status and Procurement Recognition LevelsProcurement Recognition Levels
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AgriBEE Contribution LevelsAgriBEE Contribution LevelsAgriBEE Contribution LevelsAgriBEE Contribution Levels
Contribution Levels % Points on Scorecard Procurement Recognition (R1.00 spent =)
Level 1 greater than 100 points R1.35
Level 2 from 85 to 99 points R1.25
Level 3 from 75 to 84 points R1.10
Level 4 from 65 to 74 points R1.00
Level 5 from 55 to 64 points 80 c
Level 6 from 45 to 54 points 60 c
Level 7 from 40 to 44 points 50 c
Level 8 from 30 to 44 points 10 c
Non Compliant from 0 to 39 points 0 c
2020
SANAS accredited Rating/Verification SANAS accredited Rating/Verification Agencies for Scorecard calculationAgencies for Scorecard calculation
SANAS accredited Rating/Verification SANAS accredited Rating/Verification Agencies for Scorecard calculationAgencies for Scorecard calculation
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Composition of the AgriBEE Charter CouncilComposition of the AgriBEE Charter CouncilComposition of the AgriBEE Charter CouncilComposition of the AgriBEE Charter Council
Government,
Agribusinesses,
Agricultural Processors,
Farmers Organisations,
Labour Unions
Civil Society Organisations, and
Farmers Unions.
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Progress made by the Progress made by the AgriBEE Charter CouncilAgriBEE Charter CouncilProgress made by the Progress made by the
AgriBEE Charter CouncilAgriBEE Charter Council
Council drafted a detailed workplan and already met 6 times to discuss and agree on the workplan activities.
Council agreed to migrate the section 12 into 9 Sector Codes for Agricultural Sector
Council established 3 Working Groups as follows:Working Group 1: responsible for the alignment of the Sect.12
Charter with the final DTI Codes, check the 7 elements of the Generic Scorecard and their points’ allocation with the indicative AgriBEE Scorecards.
Working Group 2: responsible for drawing up a Budget for the Activities of the Council.
Working Group 3: responsible for the investigation and development of a cost-effective monitoring & reporting system on AgriBEE implementation.
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Progress (cont…)Progress (cont…)Progress (cont…)Progress (cont…)
Council agreed to commission a study to review thresholds for Exempted Micro Enterprises (EMEs) and Qualifying Small Enterprises (QSEs).
Council made a commitment to complete a Draft Sector Code by next Council Meeting and agreed to gazette it parallel to the study.
Council completed the alignment of AgriBEE Scorecard and the Development of AgriBEE IT Portal is in progress.
Council investigated options for structure and funding after Section 9 follows:
- STRUCTURE: Council Executing Authority remaining under wing of Government (currently Secretariat to Council) or Independently Established Office with appointed CEO and staff.
- FUNDING: 50-50 or 60-40 (Government-Private Sector).
- Not yet finalized the decision on the structure and funding.
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Progress report on the Study for Progress report on the Study for EME and QSE ThresholdsEME and QSE Thresholds
Progress report on the Study for Progress report on the Study for EME and QSE ThresholdsEME and QSE Thresholds
Following the Departmental Supply Chain processes, a tender was advertised two times to appoint a suitable service provider, however all Bidders did not meet the requirements.
BID Evaluation Committee evaluated various options to undertake the study given unsuccessful tender option and recommended a proposal to engage the NAMC to undertake the study for Council’s consideration.
Council supported the proposal to appoint NAMC to do such study and tasked the Secretariat to facilitate the appointment modalities.
NAMC appointment is still in progress.
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Challenges experienced by Challenges experienced by AgriBEE Charter Council AgriBEE Charter Council
Challenges experienced by Challenges experienced by AgriBEE Charter Council AgriBEE Charter Council
Reporting on sector’s transformation is a difficult task under current Section 12 Charter status
Unable to give statistics on Scorecard Targets & Indicators other than the basis information in the DTI’s BEE Portal
Statistics/ information on AgriBEE not available and not coordinated
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Implementation of the AgriBEE Equity FundImplementation of the AgriBEE Equity FundImplementation of the AgriBEE Equity FundImplementation of the AgriBEE Equity Fund
• Fund Objective: To provide funding for equity deals that promote the entry and participation of black people in the entire agricultural value chain.
• DAFF entered into an MOA with Land Bank, as the Fund Manager.• About R195 million was transferred to the Bank: 2006/07 – 2009/10.• About R85 million was spend between 2006/07 and 2007/08 to
finance 13 equity projects and 6 AgriBEE opportunity studies & database .
• About R110 million has been frozen due to the allegations of mismanagement of the fund by the Land Bank.
• In order to unfreeze the fund, DAFF and Land Bank have developed a new MOA on the AgriBEE Equity Fund and also revised the AgriBEE Fund Operational Manual, which are on route for signature by both parties.
• Once the MoA is signed, the AgriBEE Fund will be operational and the applications will be considered by the Land Bank in line with the revised operational manual
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Agricultural Sector BBBEE Compliance: Agricultural Sector BBBEE Compliance: Registered Entities and Ownership StatusRegistered Entities and Ownership StatusAgricultural Sector BBBEE Compliance: Agricultural Sector BBBEE Compliance: Registered Entities and Ownership StatusRegistered Entities and Ownership Status
• According to the DTI IT Portal as at 30 June 2010, there are 612 entities registered in the Agricultural Sector as follows:
299 are Exempted Micro Enterprises (EME’s)
231 are Qualifying Small Enterprises (QSE’s)
82 are Large Enterprises (Generics)
278 were not yet rated.
• Ownership status of the Registered Agricultural Entities:
Average black ownership is 23%
Average black women ownership is 10%
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Agricultural Sector BBBEE ComplianceAgricultural Sector BBBEE Compliance: : Status of the Registered Agricultural EntitiesStatus of the Registered Agricultural Entities
Agricultural Sector BBBEE ComplianceAgricultural Sector BBBEE Compliance: : Status of the Registered Agricultural EntitiesStatus of the Registered Agricultural Entities
Contribution Levels Number of Agricultural Entities
% Points on Scorecard
Level 1 31 greater than 100 points
Level 2 20 from 85 to 99 points
Level 3 74 from 75 to 84 points
Level 4 161 from 65 to 74 points
Level 5 12 from 55 to 64 points
Level 6 16 from 45 to 54 points
Level 7 6 from 40 to 44 points
Level 8 6 from 30 to 44 points
Non Compliant 8 from 0 to 39 points
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Concluding RemarksConcluding RemarksConcluding RemarksConcluding Remarks
“We must be the change we wish to see in the world. I was born in India, but made in South Africa”: Mahatma Gandhi
“Socio-economic transformation is difficult but not impossible”: Nelson Mandela
Given these remarks, AgriBEE Charter (Section 12) is currently on the transformation roadmap to AgriBEE Sector Codes (Section 9)
This transformation roadmap has lot of turbulences and therefore require more than 100% commitment from all the stakeholders in the Agricultural Sector: Working together we can do more.
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Way ForwardWay ForwardWay ForwardWay Forward
Council will facilitate the gazette of AGRIBEE Sector Codes from December 2010.
Council will facilitate the signing off of the Section 9 Code by the key agricultural stakeholders before the end of March 2010.
Council will facilitate reporting by all agricultural stakeholders who falls under scope of the AgriBEE Charter.
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History confirms that people don’t believe the MESSAGE until they
believe the MESSENGER.
I THANK YOU
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