FORWARDING AND CLEARING SUB-SECTOR CODE FOR B-BBEE

The sub-sector code was originally published in August 2009 in Gazette 32511. No amendments have been made or published since then.

SCOPE OF APPLICATION

The Forwarding & Clearing (F&C) industry comprises economic activities that relate to all imports and exports conducted in respect of goods entering or leaving South Africa as well as those transiting this country. It excludes importers and exporters whose core activity is not clearing and forwarding. The F&C industry serves as an input to every other industry in the national economy as well as many of those across South African borders. In addition, cognisance is taken of the fact that the F&C industry is a complex one, which involves various activities, including freight management and supply chain logistics.

The F&C industry is associated with all modes of transport that might be involved in the carriage of cargo as well as service providers such as warehouses and transit sheds and the associated management of data. The F&C industry works closely with governmental and parastatal institutions such as SARS, the Department of Trade & Industry (DTI), the Department of Transport (DOT), and port authorities.

LONG-TERM VISION

Overarching long-term vision

1. The long-term vision is, through encouraging education and training and the promotion of lifelong learning, to develop the industry so that all participants are able to compete, nationally and internationally, with the best in the world.
2. Part of the vision is to develop South African-owned forwarding and clearing multinational companies wherever possible.
3. The South African F&C industry is well positioned to make this vision a reality and craft a broader contribution towards regional development in line with the ideals of the New Partnership for Africa’s Development (NEPAD).

Developing a World-Class Industry

1. The vision is to develop a world-class industry based on seamless integration of all transport modes and multiple transport networks, which will grow in size, stimulate South Africa’s economic growth and development, and facilitate trade while complying with international safety standards and delivering efficient, quality services to customers. The industry will achieve a significant increase in Black participation throughout the industry value chain and pursue a growth strategy that prioritises the retention and creation of quality jobs.
2. To make this vision a reality, it will require a deliberate strategy to increase access to skills, capital, and economic opportunities and, therefore, raise the economic value added (or productivity) of every employee and enterprise in the industry. This will require all stakeholders to recruit new Black people into the industry and increase their skills (and those of existing employees) to best-practice international levels, while creating a supportive culture for their talents to thrive. It will also require all stakeholders to facilitate the creation of new Black entrepreneurs (and the development of existing ones) who can participate in economic opportunities throughout the logistics value chain.
3. The signatories to this document believe that every company in South Africa should embrace Broad-Based Black Economic Empowerment (B-BBEE) voluntarily, recognising that it is a social and economic imperative to secure a prosperous future for all the country’s citizens and, therefore, a larger market in which to trade and commit to embark on a major communications and marketing campaign that will take this “Broad-Based BEE Sub-Sector Code for the F&C Industry” to every company to ensure maximum participation by all stakeholders.
4. Accordingly, all stakeholders commit themselves to this sub-sector code and agree to have their B-BBEE achievements (in terms of the indicators in the balanced scorecard) rated by an independent B-BBEE rating/verification company that is accredited by the relevant recognised body.
5. Commit to good corporate governance principles and the elimination of fronting in the industry. Accordingly, the industry will play an active role in instituting measures for monitoring, identifying, and eradicating fronting.

Undertakings by all stakeholders (to achieve this vision)

To form collaborative relationships with organisations such as Proudly South Africa (PSA), the Department of Trade and Industry (DTI), and other stakeholders and promote the economic benefits of utilising and growing Broad-Based Black Economic Empowerment-compliant freight forwarding companies.

National Government undertakings (to achieve the vision)

1. To continue to create an environment that is conducive for the country to substantially increase trade with the rest of the world, since the level of trade is the main driver of growth and, therefore, job creation in the industry. Key elements of an enabling environment for trade include trade promotion,
2. Enhancing feeder and inland transport connections, reducing costs of data transfer, improving the quality of available maritime infrastructure & superstructure, and restructuring to ensure reliability and cost-effectiveness of railway and port operations.
3. Resolve legislative and fiscal restrictions, which have a negative impact on the competitiveness of South Africa and ensure a level playing field for all companies.
4. Use its leverage in the industry to incentivise all stakeholders to achieve the objectives of this charter.
5. Demonstrate its commitment towards developing South Africa into a leading trading nation by adopting a more harmonised approach between its various departments and parastatal institutions. This will require the setting up of structures that will ensure intergovernmental coordination between departments to align their programmes with the transport sector-wide and supply chain processes. Examples of crosscutting issues that require interventions across government departments and agencies include:

5.1 The DTI’s export incentives;
5.2 National Treasury and South African Revenue Services (SARS);
5.3 Department of Foreign Affairs – Free Trade Agreements;
5.4 Increasing awareness within the transport sector about available government investment incentives and grants;
5.5 Engage public and private funding institutions to highlight opportunities in the sector;
5.6 Make proposals on financing mechanisms; and
5.7 Investigate, together with other stakeholders in other transport sub-sectors, the feasibility of setting up a transport sector bank.

6. Engage public and private sector funding agencies to develop innovative funding mechanisms for B-BBEE companies seeking to invest in the sector. This will require a high-level workshop with these agencies and major B-BBEE companies to inform them about opportunities that will emerge in the transport industry, including the F&C industry, following the adoption of this charter.
7. Increase awareness among B-BBEE companies in the transport sector about investment and matching grants, tax allowances, and other incentives that are provided by the DTI’s The Enterprise Organisation (TEO) and investigate the possibility of motivating for new products that take into account the unique nature of the F & C industry.
8. Enforce and monitor compliance with existing legislation that may impact B-BBEE, such as the Employment Equity, Skills Development, and Competition Acts.
9. Ensure that government departments are focused and sensitised to the importance of customer care and relations. This will require enhanced training and education for officials in relevant government departments.
10. Assist stakeholders with analysis of the number of people in a particular skill set (or job category) broken down by race, gender, and people living with disabilities.
11. Publish an annual report on B-BBEE and job creation within the F&C industry that consolidates various reports and information from all stakeholders. Stakeholders will use this report to review progress at an annual Transport Industry B-BBEE Forum.

Labour Undertakings (to achieve this vision)

1. Investigate opportunities to establish collective investment vehicles that will make investments in the sector. These investment vehicles will ensure empowerment of the workers both directly and in partnerships with other stakeholders in relation to skills for ownership and management of companies.
2. Ensure that workers are empowered by upgrading their skills base and creating opportunities to deploy them into management positions as well as participating in creative employee share ownership schemes.
3. Labour should mobilise members to ensure compliance and understanding of existing legislation, e.g., the employment equity, skills development, labour relations, and basic conditions of employment acts. Companies that do not comply must be reported to the Transport Sector B-BBEE Council to take further action.
4. Labour will mobilise members to identify companies that fail to implement this agreed-upon F&C industry B-BBEE sub-sector code and report them to the Transport Sector B-BBEE Council to take further action.
5. Mobilise members to monitor the performance of their employers in implementing the Growth and Development Summit (GDS) agreement on promoting local content and/or procurement and supporting the Proudly South African campaign.

TETA undertakings (to achieve this vision)

1. Play a more interventionist role to influence training priorities in the F&C Chamber. Assist stakeholders with analysis of the number of people in a particular skill set (or job category) broken down by race, gender, and people living with disabilities.
2. Continuously conduct analysis and update statistics about the future demand and supply of critical skill sets.
3. Continuously analyse the quantity, quality, and nature of F&C training that companies are doing.
4. Commit to this B-BBEE Sub-Sector Code and strive to achieve the targets set (where applicable) as per the indicators in the balanced scorecard both internally and with specific reference to service providers.
5. Align its mission and vision with the imperatives of B-BBEE and assist with the provisioning of relevant B-BBEE data that will be key for the implementation and monitoring of this strategy.
6. Enable the achievement of the education and training objectives of this charter, without unnecessary bureaucratic impediments.
7. The signatories of this sub-sector code are of the view that the sector should endeavour to facilitate the realisation of these commitments by monitoring contributions to B-BBEE. The evaluation of these contributions should be conducted through an evaluation matrix.

The next article will provide details of the indicators of empowerment.