Progress on Defence Sector SMME charter


Efforts to open South Africa’s defence industry to small, medium and micro-sized enterprises (SMMEs) with the emphasis on previously disadvantaged groups have taken another step forward with the publication of a Defence Sector Charter.

Objectives of the Charter, a work stream identified and followed up on by the National Defence Industry Council (NDIC), are all allied to the South African defence industry and include growing technical innovation; promoting local manufacture for both the national and international markets; advancing acquisition; retention and transfer of critical, technical and scarce defence industry skills; protecting South African defence industry’s sovereign capabilities; promoting entrepreneurship among “designated black groups”; recognising military veterans as a specially designated group for the local defence industry as well as encouraging participation and growth of SMMEs in the defence industry.
“Industry experts, industry suppliers, military veterans, the Department of Defence and Military Veterans (DoDMV), Armscor and other key stakeholders have since April this year been involved in a series of engagements to structure and finalise a B-BBEE (broad-based black economic empowerment) Sector Charter for the Defence Industry,” a statement issued on behalf of Armscor said.

The draft charter is the result of inputs received and work done and follows an abortive attempt to put a similar charter in place in 2007.

Addressing a September meeting of the NDIC, Simphiwe Hamilton, executive director of AMD (SA Aerospace, Maritime and Defence Industries Association) said attempts to draft a transformation charters for the defence industry in 2007 did not materialise due to insufficient support.
“We have taken lessons from the previous process and have ensured all stakeholders are consulted throughout the process of the charter’s development. As such, the current process has been endorsed by the boards of directors of both Armscor and AMD and this meeting is one of the steps taken towards attaining full support and buy-in from all key stakeholders,” he said.

As with other B-BEEE charters industry scorecards specific to the defence industry have been designed. These relate to ownership, management, skills development, enterprise and supplier development, socio-economic development and localisation.

One of the challenges identified by the NDIC is the exclusion of military veterans and it specifies “former liberation fighters” from the economy and it hopes to see space provided for them in the local defence industry when the charter is accepted and implementation starts.

The final stage of the consultation process will see the charter adopted by all stakeholders. It will then be submitted to the Minister of Defence and Military Veterans after which the Department of Trade and Industry will again publish it for public comment before it is gazetted in terms of the B-BEEE Amendment Act.