Trade and Industry Minister Rob Davies this week gazetted the BBBEE Defence Sector Code just on six months after it was signed off by Defence and Military Veterans Minister Nosiviwe Mapisa-Nqakula.
He said in a statement “the pace of transformation in the defence sector is expected to gain traction” adding the gazetting of the Code in terms of the Broad Based Black Economic Empowerment Amendment Act will “enable sector specific transformation”.
“Analysis of comments received during the 60 day public commentary period shows general support for this sector code. Public comments and inputs enhanced its content,” Davies said.
The process to develop a sector code for the defence sector flows from the launch of the National Defence Industry Council (NDIC) where it was agreed a team would develop a sector code. A team comprising the Department of Defence (DoD), Armscor and SA Aerospace Maritime and Defence Industries Association (AMD) among others was established to drive consultation, negotiation and drafting of the sector code.
The Code is a product of that process Davies said.
“All entities operating in the South African defence industry, in its entirety, including national and provincial departments, state-owned and private enterprises will from the date of gazette publication of the sector code be measured according to its provisions. This includes entities providing products and services to the state – procured from local or foreign-owned enterprises, defence manufacturing enterprises, research and development enterprises and other entities, as well as roleplayers and stakeholders that might opt in,” the Trade and Industry Minister is on record as saying.
He sees a highlight of the Code being the requirement for procurement of at least 60% of defence material to be produced locally.
“Localisation is an important instrument to improve our industries and grow our economy. We applaud the defence sector for creating a link between localisation and empowerment in this sector code.
“Another key highlight is the black ownership target is increased to 30% which is higher than the 25% benchmark of generic industry codes,” Davies said.
The Defence Sector Code aims to give effect to the constitutionally enshrined right to equality by addressing systemic past exclusion of black people from participating in the economy according to the statement.
Mapisa-Nqakula will appoint a Sector Charter Council to monitor implementation of the Code and conduct regular reviews.