MARITIME TRANSPORT & SERVICES INDUSTRY SUB-SECTOR CODE FOR B-BBEE – Part Four – Skills Development, Preferential Procurement, Enterprise Development and Socio-Economic Development

This is the fourth article discussing the Maritime Transport and Services sub-sector code and will provide information related to Skills Development, Preferential Procurement, Enterprise Development and Socio-Economic Development.

Skills Development

Guiding Principle

The vision is to substantially increase the economic value added (or productivity) of every employee in the Maritime Transport & Services Industry through best-practice human resource and skills development policies and to increase the scale of initiatives aimed at developing Black professionals and technical experts. This will be facilitated by training Black people, including Black women and Black people living with disabilities.

Private industry undertakes to:

1. Invest at least 5% of payroll or the leviable amount (whichever is applicable) on skills development initiatives within the next 5 years. The target is inclusive of all associated costs and the current 1% skills development levy. Fifty per cent – 50% – of the beneficiaries of these initiatives should be Black women.
2. Invest at least 0.5% of payroll on skills development initiatives for Black people living with disabilities, over and above the 1% skills levy within the next 5 years. 50% of the beneficiaries of these initiatives should be Black women living with disabilities. Black employees having participated in

Learnerships or category B, C or D programmes being 5% of the total employees – 50% of the beneficiaries of these initiatives should be Black women.

3. Identify within and outside their companies a talent pool of Black people for accelerated development through: 3.1 International assignments that provide high-quality operational and managerial exposure, where appropriate;
   3.2 Mentorship programmes;
   3.3 Learnerships;
   3.4 Intra-industry exchange and internship programmes; and
   3.5 Higher education and training.

Measured entities qualifying as QSEs invest 2% of the leviable or payroll, whichever is applicable, on skills development expenditure on learning programmes for Black employees. 50% of this amount is to be spent on learning programmes for Black women employees.

TETA commits to:

1. Conduct research to identify scarce management (generic) and professional (maritime-specific) skills that the industry will require over the next decade and map out future demand-supply scenarios in the detailed skills audit.
2. Conduct research on the supply side of the skills development equation, i.e., the institutions that will provide the required management, professional and technical skills. The research will determine whether the identified institutions have the capacity to meet the expected demand and whether their curricula meet the needs of industry. It will make proposals on how to increase the capacity and relevance of existing institutions and establish whether there is a need to establish a dedicated institution that will focus on developing skills for the maritime transport & services industry.
3. Introduce, after consulting stakeholders and completing the skills audit, new categories of learnerships in management, technical and professional occupational categories to help public and private sector organisations to achieve their employment equity targets.
4. Collect and publish detailed and aggregated statistics on the EE profile of the industry according to occupational level and occupational category.
5. To monitor the industry’s progress in meeting its targets and publish an annual report on the EE Profile of the industry according to occupational level and category.
6. Assist in unlocking the funds from the National Skills Fund (NSF) for management and leadership programmes in the identified areas.
7. Together with the South African Maritime and Safety Authority (SAMSA), continuously benchmark training programmes against international best practices.
8. Expand the number of learnerships available based on the sector’s skills requirements identified in the sector skills plan and the demands of the industry.
9. Facilitate easy access to finance learnerships and eliminate bottlenecks and bureaucratic procedures in accessing grants. This would entail streamlining processes and developing user-friendly procedures that encourage companies to participate in learnership programmes.

Measurement principles associated with the skills development element are contained in Statement 400 of Code 400 of the Generic Code of Good Practice. The formulae required in the determination of the skills development score are contained in Annexure 400 (A)-B of Statement 400 of Code 400 of the Generic Code of Good Practice. The formula for the determination of the adjusted recognition for gender — Annexure 400 (A)-A will not apply. The measurement principles required in the determination of the skills development score for QSEs are contained in Statement 804 of Code 800 of the Generic Code of Good Practice. The Learning Programme Matrix: Annexure 400 (A) of statement Code 400, the Generic Codes of Good Practice, will apply.

Preferential Procurement

Guiding Principle

The guiding principle is to accelerate procurement from Black-owned and B-BBEE-compliant enterprises, thus creating opportunities for the establishment of new enterprises and the development of existing ones that will grow the industry and create jobs.

The private industry commits to the following:

1. Commission, together with other stakeholders, a study to establish current levels of procurement from B-BBEE companies and identify areas where they can achieve “quick wins” to accelerate B-BBEE. The research report will be discussed by the Transport Charter Council and communicated to relevant stakeholders.
2. Procure a minimum of 70% of total procurement spend from B-BBEE-compliant suppliers, as defined by the B-BBEE Recognition Levels articulated in the B-BBEE Codes of Good Practice, within the next 5 years.
3. Procure at least 15% of total procurement spend from B-BBEE-compliant QSEs and EMEs within the next 5 years. The B-BBEE recognition levels articulated in the B-BBEE Codes of Good Practice will define the level of recognition of each Rand spent.
4. Procure a minimum of 12% of total procurement spend from 50% Black-owned suppliers.
5. Procure a minimum of 8% of total procurement spend from 30% Black women-owned enterprises within the next 5 years.
6. QSEs within this sub-sector commit to procuring a minimum of 40% of total procurement from B-BBEE-compliant suppliers.
7. Adopt the guidelines on Accounting for Affirmative Procurement that will be set by the Transport Charter Council.

Measurement principles associated with the preferential procurement element are contained in Statement 500 of Code 500 of the Generic Code of Good Practice. Pass-through third-party procurement for a third party or a client that is recorded as an expense in the third party’s or client’s annual financial statements but is not recorded as such in the measured entity’s annual financial statements will be excluded. In this regard, only the commission portion paid to agents will be recorded as under procurement.

Maritime-related services will be included within total procurement spend. These include, but are not limited to, chandelling and tallying.

The formulae required in the determination of the preferential procurement score for measured entities are contained in Annexure 500 (A) of Statement 500 of Code 500 of the Generic Code of Good Practice. Measurement principles required in evaluating the preferential procurement contributions made by QSEs within this sector are contained in Statement 805 of Code 800 of the Generic Codes of Good Practice.

Enterprise Development

Guiding Principle

The principal objective is to help set up, nurture and grow viable B-BBEE enterprises in the Maritime Transport & Services Industry that are majority-owned by Black operators while developing existing companies and aspiring to increase investment in Black-owned and empowered enterprises as a proportion of net asset value.

Private industry commits to the following:

1. Proactively seek opportunities to enter into creative joint ventures; provide discounts; give preferential credit terms and other forms of support with B-BBEE-compliant and black-owned enterprises.
2. Facilitate the development of new enterprises by the sharing of knowledge and expertise with beneficiary entities, which will be B-BBEE compliant or black-owned enterprises. Aspire to contribute to enterprise development, which amounts to 3% of net profit after tax (NPAT) evaluated annually over the next 5 years.
3. QSEs within this subsector aspire to make contributions to enterprise development, which will amount to 2% of NPAT evaluated annually over the next 5 years.

TETA commits to develop training programmes specifically designed for entrepreneurs in the maritime transport & services industry. The Transport Charter Council will monitor the progress of this commitment. The number of successful entrepreneurs that have undergone training under the TETA-accredited programmes will measure the success over time.

Measurement principles associated with the enterprise development element are contained in Statement 600 of Code 600 of the Generic Code of Good Practice.

Qualifying contributions for the enterprise development element are contained in Annexure 600 (A) — Benefit Factor Matrix of the Statement 600 of Code 600 of the Generic Codes of Good Practice. The formulae required in the determination of the enterprise development score are contained in Annexure 600 (A) of Statement 600 of Code 600 of the Generic Code of Good Practice. Measurement principles required in evaluating the enterprise development contributions made by QSEs within this subsector are contained in Statement 806 of Code 800 of the Generic Codes of Good Practice.

Sector-Specific Targets

Job Creation – Guiding Principle

There has been significant growth in the container and bulk industry over the past decade with huge increases in volumes of imports and exports, but the growth in these areas of trade has not been accompanied by a similar increase in employment. The vision is to ensure the retention and creation of quality jobs.
The guiding principle for job creation shall be related to growth in the overall South African economy, industrial production and enterprise development. To this end, a certain percentage of economic growth should at least create a significant number of jobs in the industry.
All stakeholders commit to supporting any ED initiatives that will lead to job creation. Any enterprise development contributions leading to the creation of jobs will be enhanced by a factor of 1.25.

Socio-Economic Development

Guiding Principle

The maritime industry is well placed to make a contribution towards the development of local communities. The aim is to increase the impact of companies within the MT&SI value chain on local communities. The beneficiaries of such projects must be 75% Black people.

All stakeholders commit to the following:

1. Participate in social development projects as identified by historically disadvantaged employees, which can include HIV/AIDS treatment and prevention, education, community development and maritime awareness.
2. Spending 1% of NPAT for the private sector on the social development projects articulated in the above guiding principle.
3. QSEs within this sector contributing a minimum of 1% of NPAT evaluated annually to socio-economic development initiatives over the next 5 years.

Social development contributions leading in the following key focus areas will be enhanced by a factor of 1.25. The key focus areas are:

HIV/AIDS Programmes;
Education;
Community development and maritime awareness.
Maritime Awareness – Guiding Principle

Given the lack of awareness about the impact and contribution of the maritime transport & services industry in the economy, it becomes an imperative to embark on a comprehensive maritime awareness campaign.

All stakeholders commit to the following:

1. Develop an industry-wide awareness campaign to showcase the MT & SI and its interrelated activities and demonstrate its impact on the economy through facilitating trade, economic growth and development, B-BBEE, and job creation.
2. The awareness campaign should target all South Africans, the African region, and the international community. Targeted campaigns are to be spearheaded at government departments (Department of Trade, Industry and Competition; Department of Transport; and National Treasury), schools, tertiary institutions and financial institutions.