Page 9 - Q&A.indd

The draft Defence Sector BEE Charter introduces
interesting new compliance elements BEE

August 2017

“I’ve built up a business around providing equipment and
clothing for certain part of our military and police services.
I’ve done my BEE planning to make sure that I’m in a good
position to continue getting government tenders. I’ve heard
talk of a new BEE charter for the Defence Sector coming out
soon, and want to make sure I have all my ducks in a row to
comply. Is this true?”

You are correct. A new draft Defence Sector BEE Charter (“Defence
Charter”) has been published for comment in August this year. This
Defence Charter will apply to all entities operating within the South
African defence industry, including privately owned enterprises involved
in the supply of products and services to state departments, defence
manufacturing enterprises, research & development enterprises as well
as organs of state and state owned entities involved in the defence
industry. The draft Defence Charter introduces a number of unique
aspects aimed specifically at this industry.
This charter makes provision for the establishment of a Defence Sector
Charter Council with the responsibility for overseeing and monitoring
the implementation of the Defence Charter and managing the new
Skills Development Fund and Enterprise and Supplier Development
Fund.

To address the shortage of technical skills in the industry, a Skills
Development Fund will be established to assist in developing critical
skills within the defence industry. Enterprises in this sector will have
to contribute 4% of their annual leviable skills amount towards skills
development programmes for black persons, which includes a 1%
contribution towards the Skills Development Fund, which will be used
for the development of critical and scarce skills within the industry. Also
included in this target is a 1% contribution towards skills development
programmes specifically designed for military veterans.
The Defence Sector Charter Council will negotiate with relevant
government departments to exempt enterprises within the defence
industry from contributing a skills development levy, due to the
contributions being made to the Defence Industry Skills Development
Fund.

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