Page 16 - Q&A Book.indd

Implications of the new Construction BEE
BEE Charter on construction material suppliers

Marc Naudé
March 2017

“My company supplies construction materials and in the past
I have always been verified under the general BEE Codes with
my BEE verification. Will this still be the case in terms of the
new Construction BEE Charter? If not, what effect will this have
on my business?”

The draft Construction BEE Charter (“Construction Charter”) was
published for public comment in October 2016 with publication of the
final version expected soon. The draft Construction Charter makes it
clear that construction material suppliers will now have to be verified
under the Construction Charter (when it is finally published) and not
under the general BEE Codes of the Department of Trade and Industry,
as these suppliers have done in the past.
It is anticipated that suppliers of construction materials may be in for
a challenge in having to comply with the Construction Charter based
on the provisions of the published draft. The draft Construction Charter
contains a number of provisions which require the reporting entity
to report on their compliance with targets relating to the number of
registered black professionals employed by the entity. Although these
provisions should not be too problematic for other entities which fall
under the Construction Charter, such as engineering and architecture
firms who require registration with their professional bodies, no
professionally qualified persons are in essence required to operate
a material supply company. Yet it does not at present appear from
the draft, that these suppliers will be able to sidestep compliance with
these provisions.

This requirement affects also the Management and Skills Development
elements, both of which now contain targets relating to professional
registration. A construction material supplier such as yourself will
therefore have to take cognisance of this new requirement, as non-
compliance could in our estimation result in a loss of up to two BEE
levels if these provisions are not met.

When one considers that your BEE level is more important than ever
for government tenders under the new Preferential Procurement
Regulations, a potential loss of two BEE levels is a distinct disadvantage
faced by construction material suppliers and impacting on their

11