The ICT charter, which was nine years in the making, will have to be revised, about 18 months after it came into effect, because it now needs to be aligned with the proposed new empowerment codes.
The Department of Trade and Industry recently gazetted proposed amendments to the Broad-Based Black Economic Empowerment Codes of Good Practice, and people have until 4 December to comment.
Trade and industry minister Rob Davies gazetted the final ICT charter on 6 June and noted that it comes into effect immediately and is binding on all stakeholders operating in the ICT sector. The charter will affect the just over 4 000 firms in the sector, of which only a handful are listed.
Former steering committee deputy chairman Andile Tlhoa'ele says the charter must be aligned to the revised codes, a process that is likely to take place around the beginning of 2014. The steering company was disbanded after its work was done, and communications minister Dina Pule is in the process of setting up an ICT Charter BEE Council.
Tlhoa'ele, who heads up Inforcomm, a verification entity, notes that the charter will have to be aligned with the changes to the core elements contained in the codes. When the current codes came in, in 2007, the charter was held up as it needed to be aligned.
Key elements
Transcend Corporate Advisors director Trevor Tshabangu says the initial codes have seven elements against which large companies are assessed, while small firms that turnover between R5 million and R35 million only have to comply with four of the seven.
However, the revised codes only have five elements and all businesses, regardless of their size, need to comply with all of these, says Tshabangu. The five elements are: ownership; management control, which has now been combined with employment equity; skills development; enterprise and supplier development, which is a combination of preferential procurement and enterprise development; and socio-economic development.
The old codes allowed companies that earn less than R5 million a year to be exempt, and this has been raised to R10 million, says Tshabangu. In addition, qualifying small enterprises are now businesses that earn between R10 million and R50 million, he adds.
Trade and industry also introduced priority scorecard elements: ownership, skills development and enterprise and supplier development, says Tshabangu. Businesses must achieve a minimum of 40% before they can earn points, and if they do not reach the sub-minimum, will automatically drop two empowerment levels, he adds.
Qualifying small enterprises, which must comply with ownership and one other element, will only drop one empowerment level, notes Tshabangu.
Tlhoa'ele adds that the charter could be amended to define its own priority elements with the aim of bolstering development. He adds that the new codes are not "tick-box-driven", but based on performance.
Other changes to the proposed new codes include that companies now need to spend 6% of payroll on training and developing people of colour instead of the traditional 3%, which was designated for black employees only, says Tshabangu. The draft codes also no longer allow learnership salaries to be claimed as skills spend.
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