Transformation and revitalisation of South Africa’s ailing defence industry will drive the latest addition to organisations working in and for the sector as it battles continuously decreasing national defence budgets, skills losses and attempts to recover from the ravages of State capture.
The Defence Sector Charter Council (DSCC) is a representative body comprising stakeholders in the South African Defence Industry (SADI), according to a SA National Defence Force (SANDF) statement.
“The existence of the Sector Council will expedite transformation and revitalisation of the SADI ensuring consistent implementation of the Defence Sector Code with a focus on specific targeted areas that are a challenge in transformation” it reads, singling out manufacturing technology business, exports and “other technical areas” as parts of the SADI where transformation remains a problem, notwithstanding the national defence sector code.
“DSCC will work closely with companies in the local defence and related Industries to ensure, among others, development of scarce skills, creation of employment as well as growth and sustainability of small business.”
Advocate Vuyisa Ramphele, managing director of RLDC Consulting and a former Armscor corporate compliance general manager, will chair the newly formed DSCC and its 13 councillors. They are: Sandile Ndlovu, Keobakile Mpolokeng, Jacob Mohlamme, Sihle Mayisela, retired brigadier general Damian De Lange (all AMD – the SA Aerospace, Maritime and Defence Industries Association), Dudu Phama, Kabelo Bokala, Mikki Xayiya (all Department of Military Veterans), Trevor Mketi (Department of Defence) Sandile Sokhela (Defence Industry Fund), Nomkhosi Magwaza, Meshack Teffo (both Armscor) and Jacob Maphutha from the Department of Trade, Industry and Competition (DTIC).
In a welcoming message Defence and Military Veterans Minister Nosiviwe Mapisa-Nqakula wishes the DSCC all the best in the execution of its duties with the rider that “unequivocal co-operation and support is expected from all stakeholders”.
In April 2019 Mapisa-Nqakula launched the Broad Based Black Economic Empowerment (BBBEE) Defence Sector Charter after it was gazetted at the end of 2018 and revealed she was tasked with appointing a Defence Sector Charter Council to monitor implementation of the code and conduct regular reviews.
The Defence Sector Charter is one outcome of the National Defence Industry Council (NDIC) launched in March 2016. It was created to address challenges facing the SADI, including limited economic growth and markets as well as the reduced the defence budget.
The NDIC was established to address industry challenges and its objectives are to ensure the industry’s products and services are aligned with SANDF requirements; assist the industry grow and ensure transformation in the industry so it is reflective of South African demographics. Transformation involves ownership, management and skills development. This includes enterprise and supplier development, promoting access to previously disadvantaged groups and localisation.
The Department of Defence said in 2019 the purpose of the BBBEE Defence Sector Charter was to transform and grow the defence industry through ownership, management and skills development programmes with an emphasis on military veterans and SMMEs. Transformation must include access to economic opportunities and resources for previously excluded groups, promotion of local business and entrepreneurship, development of skills for a knowledge-based economy and development of intellectual property.
The Defence Sector Charter makes provision for companies to procure at least 60% of products locally. Private sector entities in the defence industry must sub-contract no less than 30% of any contract exceeding R30 million to companies owned by black designated groups. Another highlight is the black ownership target increased to 30%, higher than the 25% benchmark of generic BEE codes.