TRANSPORT SECTOR CHARTER CHANGES

In a significant development, the Transport Sector Charter (TSC) is set for amendments, a decade after the B-BBEE (Broad Based Black Economic Empowerment) Codes of Good Practices were revised in October 2013. Expected to be gazetted by March 2024, this change is poised to have a widespread impact on the entire market.

In contrast to the smooth transition experienced with the Amended Codes of Good Practices (ACoGP) in 2013, the proposed TSC amendments represent a noteworthy shift. Unlike the previous transition period, which provided Measured Entities with additional time to plan, the TSC has not suggested such a grace period. This lack of transition is anticipated to pose challenges for the industry, potentially resulting in unfavourable B-BBEE statuses.

Despite these challenges, the TSC offers certain advantages over the general sector. The ACoGP already boasts a proven calculator, consultants, and planning methodologies. Leveraging past experiences to enhance the scorecard, the TSC has not grappled with the more demanding scorecard since 2016, when the TSC ACoGP was open for public comment.

In the anticipated Gazette of the proposed Transformation Sector Code, several noteworthy changes will significantly impact organi s ations, particularly those falling under the General Amended Codes of Good Practice ( ACoGP ) :

OWNERSHIP

The TSC ACoGP introduces ownership targets exceeding the common 25% + 1 vote, diverging from several sectors. The proposed ownership percentage during the October 2023 meeting noted a possible 40% target.

MANAGEMENT CONTROL

The Department of Labour’s issuance of a certificate post submission of Measured Entities EEA2 & 4 documents , poses a risk for entities engaged in transformation requiring verification by a SANAS accredited B-BBEE V erification agency , should this be gazetted .

SKILLS DEVELOPMENT

The draft TSC’s Skills Development element introduc ing an “Advancement Programme” with a weighting of 11 points on the scorecard, remains without a defined framework yet. We anticipate clarity during the public comment phase.
Notably, the M easured E ntity ‘s Total Leviable Amount target is set to increase to 6%, with an expected 2.5% allocated for bursaries to Higher Education I nstitutions .
Absorption of unemployed learnerships becomes contentious due to the post-May 2019 amendment in code series 300 , as the definition of absorption in the ACoGP Codes changed to mean permanent employment.
Monitoring Learnership Programme transition from SETAs to QCTO-accredited Occupational Qualifications is crucial, potentially impacting supply from June 2024 onwards.
Concerns arise regarding the proposed exclusion of Mandatory & Discretionary funding when measuring the skills development element.

ENTERPRISE & SUPPLIER DEVELOPMENT

Shortened payment periods, limited to 15% of the target, align with standard practices in other sectors.

It is improbable that the Transformation Sector Code will be officially published by March 2024. This is because key stakeholders , i ncluding the Road Freight Association (RFA) have not reached a consensus thus far , and the draft TSC, essential for the 60-day public comment period mandated by the gazetting process, has not been made available yet . Siyaya Skills Institute is a member of both the RFA & NAACAM .

REFLECTING ON OUR EXPERIENCE AS CONSULTANTS NAVIGATING COMPLIANCE CHALLENGES FOR CLIENTS, WE OFFER THE FOLLOWING INSIGHTS:

Companies with a total revenue exceeding R10 million or those not meeting the criteria of a 51%+ Black-owned business with a total revenue under R50 million should pay careful attention to the upcoming changes.
Post-2013, level 4 contributors without black ownership faced non-compliance. Strategic planning was crucial, and in optimal scenarios, it led to an elevation to level 8.
In 2018, relief was provided with the gazetting of the Youth Employment Services legislation. This allowed level 8 contributors who were willing to invest further to enhance their statuses to a level 6.

For businesses serious about transformation, proactive planning with specialists is key. Associations and other bodies should also take the initiative to disseminate information about the changes, organising workshops and seminars to help members comprehend and navigate the forthcoming challenges.

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