THE PROPERTY SECTOR TRANSFORMATION CHARTER
Pam Snyman
September 2010
A: IMPORTANT GENERAL INFORMATION:
It is important to note that this summary is based on the DRAFT
Property Sector Charter that is to be gazetted soon and is subject
to change after public comment.
1. Transformation is a mechanism by government using Broad-Based Economic
Empowerment to enable the participation of the previously marginalised in the
main stream economy.
2. Charters are documents that guide the implementation of the process.
3. The Property Sector Charter has been gazetted under Section 12 of the
Broad-based BEE Act (No 53 of 2003). It is a recordal of the commitment to
promote transformation and empowerment by major stakeholders in the sector
and is binding amongst signatories and not to Government. The PSC is
currently in the process of being gazetted under Section 9 (1), which is binding
amongst signatories and to Government.
4. Once gazetted, the Charter will be binding and enforceable and the
verification certificate acquired before the gazetting of the PSC will remain
valid for 12 months.
5. Transformational goals need to be met in the next five (5) years in line with
the Property Charter
6. The targeted date for compliance is 2012 (5 years from Section 12 gazetting
in 2007)
7. Thresholds for the Property Sector Charter deviate from the norm in that
Qualifying Small Enterprises are defined as follows:
ASSET BASED
Micro and
small
enterprises…
whichever is
higher
NET
ASSETS
GROSS
INCOME OR
TURNOVER
NUMBER OF
EMPLOYEES
SERVICE
BASED
ESTATE
AGENTS/
BROKERS
R5M - R35M
R1M- R35M
20
5 estate
agents/brokers
R 30 M – R280M
1
For Estate Agents this means that all agencies qualify under the PSC when
they earn R1million in a particular financial year OR when they have 5 estate
agents working for them.
8. Each enterprise will submit a BBBEE report annually to the Charter Council. It
must contain the enterprise’s scorecard, verified by an accredited BEE verification
agency and an account of progress in achieving the qualitative undertakings in the
charter.
9. Weighting in terms of the PSC is as follows:
ELEMENTS
CODE
WEIGHTING
Ownership
100
20 points
Management control
200
10 points
Employment Equity
Skills Development
300
400
15 points
15 points
Preferential Procurement
500
20 points
Enterprise Development
Socio-Economic Development
600
700
10 points
2 points
Economic Development
15 points
107 points
TOTAL
Qualifying Small Enterprises (QSE) must select any 4 of the Elements of BBBEE and they will be measured out of 107points.
10. BBBEE Status Matrix:
LEVEL
BEE SCORE- property
charter/codes
WEIGHTING
Level 1
≥ 100 points
135%
Level 2
≥ 85 but <100
125%
Level 3
≥ 75 but <85
110%
Level 4
≥65 but <75
100%
Level 5
≥ 55 but <65
80%
Level 6
Level 7
≥ 45 but <55
≥ 40 but <45
60%
50%
Level 8
≥ 30 but <40
10%
Not
compliant
<30
0%
2
Where any enterprise is in excess of 50% owned by black people, the BBBEE
Status of that enterprise will be at the level immediately above the level at
which its actual score is evaluated.
11. Exempted Micro Enterprises are those that qualify for exemption in terms of
the table in 6 above. These enterprises will be exempt from obtaining a BBBEE
verification certificate and will automatically be awarded a B-BBEE recognition
level of 4. In the event that their black ownership exceeds 50%, they will be
awarded a B-BBEE recognition level of 3.
B. CODES OF GOOD PRACTICE TO BE ACHIEVED BY 2012
1. Ownership: code 100 (20points)
Aim:
effective ownership of enterprises by black people
Target:
25% + 1 black ownership
Indicators: Voting rights by black people (5pts)
Voting rights by black women (2pts)
Economic interest by black people (5pts)
Economic interest by black women (2 pts)
Economic interest of black designated groups/black participants in
Employee Ownership Schemes/black beneficiaries of B-b Ownership
Schemes or black participants in Co-operatives (1pt)
Ownership fulfilment (1pt)
Net Equity Value (4pts)
2. Control: code 100 (10points)
Aim:
Target:
effective control of enterprises by black people
50% for Board Participation by Blacks ito exercisable Voting Rights
50% for Black Executive Directors
40% for Black Senior Top Management
40% for other Black Top Management
Indicators: Exercisable Voting Rights of Black Board members (3pts)
Black Executive Directors (2pts)
Black Senior Top Management (3pts)
Black other Top management (2pts)
3. Employment Equity: code 300 (15points)
Aim:
Target:
initiatives to achieve equity in the workplace
37.5% Black Practitioners
30% Black People in management
Indicators: Black Practitioners (7.5pts)
Black People in Management (7.5pts)
Compliance (1pt)
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4. Skills Development: code 400 (15 points)
Aim:
the extent to which employers carry out initiatives designed to
develop competencies of Black People
Target:
1.5% of Skills Development Expenditure for Black Employees
0.3% of Skills Development Expenditure for Black Employees with
Disabilities
2.5% of Black Employees participating in Learnerships
Indicators: Skills Development Expenditure for Black Employees (6pts)
Skills Development Expenditure for Black Employees with
Disabilities (3pts)
Learnerships (6pts)
5. Preferential Procurement: code 500 (20points)
Aim:
the extent to which enterprises buy goods and services from
suppliers with strong BBBEE procurement recognition levels
Target:
70 % BEE Procurement Spend from all suppliers based on BEE
Procurement Recognition Levels
10% BEE Procurement Spend from Qualifying or Exempted Small
Enterprises
15% BEE Procurement Spend from any suppliers that are more than
fifty percent Black owned and that are more than fifty percent black
women owned
40% spend on Property Services Enterprises (level 1-4)
Indicators: BEE Procurement Spend from all suppliers based on BEE
Procurement Recognition Levels (10points)
BEE Procurement Spend from Qualifying or Exempted Small
Enterprises (2pts)
Procurement Spend from suppliers: that are more than 50%
black owned (3pts) and that are more than 50% black women
owned (2pts)
spend on Property Services Enterprises at levels 1-4 ( 3pts)
6. Enterprise Development: code 600 (10points)
Aim:
the extent to which Enterprises carry out initiatives intended to assist
and accelerate development and sustainability of other Enterprises
that contribute toward BBBEE
Target:
3% of Net Profit After Tax (NPAT)
Indicators: Average annual value of all Enterprise Development contributions
and Sector Specific Programmes made by as a percentage of the
target (10pts)
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7. Socio-economic Development: code 700 (2points)
Aim:
the extent to which enterprises carry out initiatives that contribute
towards socio-economic Development or Sector Specific initiatives
that promote access to the economy for black people
Target:
1% of NPAT
Indicators: Average annual value of all socio-economic development
contributions as a percentage of the target (2pts)
8. Economic Development: code: economic development
scorecard (15points)
Aim:
investment in under-resourced areas by participation in developing
properties and transformational infrastructure projects that support
development, empower micro and small enterprises and contribute
towards equitable access to economic resources in these areas
Target:
35% disposal of assets to B-BBEE enterprises (level1-4)
10% development investment in under-resourced areas
Indicators: Disposal of assets (7/8pts)
Investment in development in under-resourced areas (7/8pts)
NB: Where an enterprise is exempt from a code, it will calculate its overall
performance based on 100 points minus the weighting allocated
to the exempt code as in Number 8 above. E.g. an enterprise
that does not own properties which it could dispose of, or make
investments in property developments, will be exempt from
performing under those categories and will be scored out of
commensurately less.
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