1. AgriBEE INDABA 6 Dec 2005 Proposal for an AgriBEE Charter

2. 2 Index  5 Stages of AgriBEE process  Where are we in recommended process  Section 12 and 9 Charters/Codes  Structure of draft AgriBEE Charter  Tasks for Breakaway Sessions

3. 3 5 Stage Process  Aug 2002 - driven by the Reference Group  July 2004 - AgriBEE Framework launched by Minister  Oct 2005 - Draft AgriBEE Charter recommended to Minister  Indaba 6,7 Dec  Follow up

4. 4 AgriBEE Framework process  Wide publicity, including provincial launches  An AgriBEE Steering Committee (SC) appointed to consult stakeholders, lead key strategic approaches and report  Public comments received until Dec 2004  The SC undertook consultations, as mandated  The dti released BBBEE Codes of Good Practice (CGP) in June 2005  The SC engaged with CGP directives and utilised them in the development of its recommendations  SC presented draft AgriBEE Charter and large-scale scorecard to Minister 28 Oct 2005

5. 5 AgriBEE Framework process  Commentary process transparent with 55 written inputs received  Consultation process inclusive, broad, including organised agriculture, labour, youth, women and provinces  AgriBEE Framework is accepted in principle  Charter should be aligned with the CGP  Certain Codes of Good Practice remain presently outstanding, e.g. for SMMEs  Scorecard should run from 2007 to 2017  Need to publish draft AgriBEE Charter for comment  Need for an Indaba in Dec  Propose first phase: Section 12 Charter, then Section 9 Sector Code

6. 6 Draft AgriBEE Charter  Draft, including large scale scorecard published on 2 Nov  Negotiations identified with stakeholders Agri SA NAFU SA TAU SA ABC, SA Processors Assoc, SACOB Banking Council Labour Wine and sugar sectors (legislation) Women, youth & disabled groups  Indaba planned for 6,7 Dec

7. 7 AgriBEE Charter negotiations  Scope of the Charter requires refinement  One main sector charter, limited sub-sector Charters  Single balanced scorecard, but weightings taking into account farming/ non-farming  The scorecard requires further interrogation  How to deal with issues affecting implementation, e.g. land restitution  SMMEs need to be addressed

8. 8 AgriBEE Charter negotiations (cont.)  Need to align other policies, e.g. funding and support with AgriBEE Charter  All stakeholders need to fully digest the CGP  Need for certain clarifications by the dti  need for follow up communication  Impact studies could be done by AgriBEE Council  Cost of implementation to be kept down  Time constraints in preparations and negotiations

9. 9 Process A B C You are now here

10. 10 Sector Charter (Section 12)  Expression of commitment to transformation  No Legal Status  Developed by major stakeholders in sector  Advances objectives of Act

11. 11 Sector Code (Section 9)  To be signed by Minister of Agriculture and industry associations  Independent third party analysis Justified, defines scope advances BEE Act All scorecard elements consistent with CGP addresses funding to meet ownership & enterprise development targets  Addresses sector challenges & vision  Adresses Charter Council  It is legally binding

12. 12 Ownership  Weighting 20%  Targets for voting rights & economic interest for categories of black people 10-25%  Bonus points for land transfer contributions ---------------------------------  Empowerment starts with improved land access and tenure security  Distinction between land and enterprise ownership  Voluntary sales of land  30% commercial land target agreed  Lead to viable and sustainable enterprises  Will develop diversity of enterprise models

13. 13 Management Control (see also Employment Equity)  Weighting 10%  Exercisable voting rights at board and executive level 40- 50%, women 20-25% ---------------------------------  Undertaking to promote black participation, incl. Women, at executive and board levels

14. 14 Employment Equity  Weighting 10%  EE 50%, women 50% --------------------------------  Proactive employment of black, incl. Women, managers  Bonus points for employment of disabled and youth

15. 15 Skills Development  Weighting 20%  Investment as % of payroll 3%, bias toward literacy & numeracy  Learnerships and interns 3%  Qualifying mentorship programmes --------------------------------  Require more resources for expanding human capital pool for sustained productivity, entrepreneurship and skills

16. 16 Preferential Procurement  Weighting 20%  50% ---------------------------------  Proactive AgriBEE procurement  Annual spend reporting  Progressively provide preferential supplier status

17. 17 Enterprise Development  Weighting 10%  Cumulative contribution to enterprise development as % of average nett profit 10%, or 20% of land or assets leased  long term leases (>5 years) ---------------------------------  Recognise access to support services core to sustainable empowerment  Develop operational and financial capacity  Financial contribution to enterprise development  Lease agricultural land

18. 18 Rural development and poverty reduction  Weighting 10%  Cumulative contribution to social development as % of nett profit 10%, or land made available to farm workers 10% ---------------------------------  Contribute to social development and industry specific initiatives, e.g. housing, recreational and health facilities, transport etc  Make agricultural land available to farm workers

19. 19 Monitoring and evaluation  Each institution fully discloses and reports annually  All elements of scorecard  M&E centres to be established  Link AgriBEE baselines and measurements to census periods  Independent AgriBEE Council to be established  Targets to be reviewed and corrected every 3 years  Comprehensive evaluation after 5 years

20. 20 Tasks for Breakaway Sessions  Focus on improvements to the draft Charter  Address specifically: In principle agreement of the draft Charter Identify any gaps for attention How should the Charter cover the value chain SMMEs Scorecard weightings/targets where possible Any further work that needs to be done A way forward, e.g. planning for implementation, organizational and institutional arrangements, funding Road shows and further clarification required April launch of AgriBEE Charter