One of the sector codes receiving very little attention is that of the maritime sector. This code is already 17 years old and forms part of the overall Integrated Transport Sector Code published on 21 August 2009 in Gazette 32511.
This fart article, in a series, will introduce the basic understanding and goals of this Code.
SCOPE OF APPLICATION
Delineation of the Sector
The Maritime Transport & Services Industry (MT & SI) is often associated with shipping fines involved in the carriage of cargo and associated service providers. More specifically, economic activities in South Africa which share a relationship with the sea include the following:
Enterprises concerned with the marine transport of cargo and services ancillary to such transport;
Enterprises concerned with the manufacture, provision, maintenance and repair of marine equipment, including marine craft;
The commercial port system and authorities are responsible for the provision and operation of navigational aids, including lighthouses.
Institutions concerned with rescue, salvage and anti-pollution operations;
Government departments and agencies concerned with international maritime relations, administration of maritime safety, the protection and conservation of the marine environment and law enforcement within South Africa’s offshore jurisdiction; and institutions concerned with marine and maritime education, training and resources.
Exclusions
The following activities, which constitute part of the Maritime Transport & Services Industry, broadly defined, are excluded for the purposes of developing a Broad-Based Black Economic Empowerment (B-BBEE) Charter, as appropriate policies are formalised for these entities by other government departments:
Enterprises concerned with the exploitation of renewable and non-renewable marine resources (Departments of Minerals and Energy and Environment and Tourism, for fishing);
The Marine Tourism Industry (Department of Environment and Tourism); and,
Naval defence (Department of Defence).
LONG-TERM VISION
The overarching long-term vision is to develop South Africa to become one of the world’s top 35 maritime nations by the year 2014. South Africa’s sea-borne trade during this period amounted to approximately 135 million tonnes. This level of trade closely matches some of the countries featuring in the top 35 merchant fleet owners.
The vision is to substantially increase the number of SA-flagged vessels and develop new South African shipping companies that are globally competitive, not only in trade between South Africa and the rest of the world. These companies must eventually be able to compete with other merchant navies operating on other lucrative international trade routes, e.g., the Far East and Europe and America.
The vision is to develop a world-class industry, based on seamless integration of all modes and multiple networks that will grow in size, stimulate economic growth and development, facilitate trade, comply with international safety standards and deliver efficient and quality services to customers. The industry seeks to achieve a significant increase in Black participation in ownership, management and employment in companies throughout the industry value chain. We will pursue a growth strategy that prioritises the retention and creation of quality jobs, most of which are on landside operations.
To make this vision become a reality 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 MT & SI value chain.
The signatories to this document believe that every company in South Africa must embrace Broad-Based Black Economic Empowerment (B-BBEE), recognising that it is a constitutional, legislative and economic imperative to secure a prosperous future for all the country’s citizens and, therefore, a larger market in which to trade. We commit ourselves to embark on a major communications and marketing campaign that will take this B-BBEE Sub-Sector Code for the Maritime Industry to every company within the industry to ensure maximum participation by all stakeholders. Accordingly, all private sector stakeholders, who commit themselves to this Charter, will agree to have their B-BBEE achievements (in terms of the indicators in the balanced scorecard) verified by an independent B-BBEE verification agency that is accredited by an appropriate verification body.
Undertakings by all stakeholders (to achieve this vision):
To promote a collaborative relationship with organisations such as Proudly South Africa (PSA) and stakeholders in the mining and liquid fuels industries through the Ship South African Campaign to persuade local cargo owners to increase the cargo carried on South African ships to 25% of the total within the next five years. South African companies, with particular focus on B-BBEE-compliant companies, should broker 25% of all cargo handled by brokers within the next five years, subject to review. The new mining and liquid fuels industry leadership should place shipping on the agenda. These industries are well positioned to facilitate the utilisation of Black shipping service providers in joint ventures with established companies. What we are calling for is a clear strategy or plan that will result in the bulk of cargo going through South African ports to be carried on South African ships.
National Government Undertakings (to achieve the vision):
Over and above the above, the government is committed towards developing South Africa into a leading maritime nation by adopting a more active stance and increasing its advocacy around maritime matters and the proposed Ship South African Campaign.
Continue to create an environment that is conducive for the country to substantially increase its trade (exports and imports) with the rest of the world. Recognising that 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, enhancing feeder and inland transport connections, improving the quality of available maritime infrastructure & superstructure and restructuring to ensure reliability and cost effectiveness of port operations.
Resolve legislative and fiscal restrictions, which have a negative impact on the competitiveness of the South African Maritime Industry.
Use its leverage in the industry to incentivise all stakeholders to achieve the objectives of this Sub-Sector Code.
Set up structures that will ensure intergovernmental coordination between departments to align their programmes with the transport sector-wide and MT & S! B-BBEE Sub-Sector Code processes. Examples of cross-cutting issues that require interventions across government departments and agencies include:
The Department of Trade & Industry’s (DT!) Maritime Industry Strategy;
Discussions with the National Treasury to address fiscal issues, e.g., tonnage tax;
Department of Foreign Affairs — Free Trade Agreements.
The Department of Labour and the Transport Education and Training Authority monitor compliance with the Employment Equity and Skills Development Act.
The countrywide shortage of engineers and artisans across all disciplines; and
Increasing awareness within the transport sector about available government investment incentives and grants.
Monitoring of stakeholder achievements in terms of the indicators in the MT & SI Scorecard.
Convene a stakeholder forum to investigate the scale of B-BBEE opportunities in the MT & SI. The stakeholder forum will also:
Engage public and private funding institutions to highlight opportunities in the sector;
Make proposals on financing mechanisms and investigate, together with stakeholders in other transport sub-sectors, the feasibility of setting up a transport sector bank.
Engage public and private sector funding agencies to develop innovative funding mechanisms for B-BBEE-compliant or black-owned enterprises seeking to invest in the sector. This will require a high-level workshop with these agencies and major Black-owned and B-BBEE-compliant companies to inform them about opportunities that will emerge in the MT & SI following the adoption of this sub-sector code.
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 and The Enterprise Organisation (TEO) and investigate the possibility of motivating for new products that take into account the unique nature of the maritime industry.
Ensure that the restructuring of ports to effect new institutional arrangements and to increase the international competitiveness of ports, port operations and services must proceed in a manner that results in an increase in Black participation at all levels — in ownership, management, employment and the procurement of services and goods and to increase the international competitiveness of the ports, port operations and services. The restructuring of port operations must not result in a reversal of B-BBEE gains made by the Transnet National Ports Authority (TNPA) and Transnet Port Terminals (TPT). Public sector contributions to B-BBEE will be measured against the Public Sector Sub-Sector Code.
Enforce and monitor compliance with existing legislation that may impact B-BBEE, such as the Employment Equity, Skills Development and Competition Acts.
Publish an annual report on B-BBEE within the MT & SI 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):
Encourage employers to first look towards their own employees when considering options for achieving Black equity participation.
Investigate opportunities to establish collective investment vehicles (including employee share ownership schemes) that will make investments in the sector. These investment vehicles must ensure the empowerment of workers to develop the skills required to own and manage companies in the industry.
Ensure that workers are empowered through skills development and create opportunities to deploy them into management positions.
Mobilise members to ensure compliance with existing legislation, e.g., the Employment Equity, Skills Development, Labour Relations and Basic Conditions of Employment Acts. Non-complying companies must be reported to the Transport Charter Council to take further action by inspecting the causes for non-compliance and reviewing performance targets as necessary.
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.
Monitor the impact of procurement/outsourcing on job creation and report findings to the Transport Charter Council and MT & SI Steering Committee.
TETA’s (Transport Education and Training Authority) undertakings to achieve this vision:
Play a more interventionist role to influence training priorities in the Maritime Chamber.
Assist stakeholders with the analysis of people in a particular skills set (or job category) broken down by race and gender.
Continuously conduct analysis and update statistics about the future demand of critical skills sets and the supply side of the equation.
Continuously conduct an analysis of the quantity, quality and nature of MT & SI training that companies are doing.
Commit to this B-BBEE Sub-Sector Code and strive to achieve the targets set (where applicable) as per the indicators (Ownership, Management Control, Employment Equity, Skills Development, Preferential Procurement, Enterprise Development and Socio-Economic Development) in the B-BBEE Scorecard both internally and with specific reference to service providers.
Align its mission and vision with the imperatives of B-BBEE and assist with the implementation and monitoring of the B-BBEE Sub-Sector Code.
The next article will discuss the indicators of empowerment for this sector code.
