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Who will be measured in terms of the Amended Construction Sector Code once it’s finalised?

Who will be measured in terms of the Amended Construction Sector Code once it’s finalised?

The objective of the draft Amended Construction Sector Charter is to provide a framework for the Construction Sector to address Broad-Based Black Economic Empowerment (B-BBEE), enhance the capacity of black contractors, black professionals, industry workers and the community and to increase the productivity of the sector to meet the world best practices.

The Construction Sector is defined as all enterprises that derive more than 50% of their annual revenue from construction related activities. For the avoidance of doubt, being registered with any of the following bodies, does not automatically render the enterprise to be part of the construction sector:

  1. Construction Industry Development Board
  2. National Home Builders Registration Council
  3. Construction Educational and Training Authority

The key consideration to determine whether a measured enterprise falls within the Construction Sector, notwithstanding registration with these bodies, remains whether or not the majority of its annual revenue is derived from construction related activities.

Where a Measured Entity operates in more than one sector or sub-sector (e.g. Contractor or BEP), whether it requires a single entity verification or a consolidated verification for it as a group, it will be required to report in terms of the scorecard for the sector or sub-sector in which the majority of its core activities (measured in terms of annual Revenue) are located.

The draft amended construction sector code clearly stipulates who will be rated under this sector. They have categorised it as follows:

  1. Built Environment Professionals;
  2. Contractors (General Build) and
  3. Manufacturers and Suppliers of building materials, equipment and plant hire.

A discussion on the definition on each of the above mentioned categories

  1. The Built Environment Professionals: These are enterprises that conduct the following activities: Planning, design and costing of construction projects in the built environment. Also, project management and design of a construction value chain including environment, energy, industrial, property, transport and infrastructure. Enterprises typically classified as BEP’s include, but are not limited to, consulting, engineering practices, architects, quantity surveyors and town planners.
  2. Contractors: Enterprises that conduct construction project activities that include, civil engineering, electrical engineering, power transmissions, general building and specialist construction works as per the CIBD grading.
  3. Construction Material Suppliers: means enterprises that conduct the following activities: manufacturing, creation or supply of building material and equipment used in construction for example cement, concrete, bricks, electrical equipment and steel. It includes enterprises that provides plant hire for construction related activities.

Construction material suppliers are measurable against the thresholds, targets, weightings and methodology applicable to contractors as per the Construction Sector Code scorecards.

Unlike the previous construction code that had a transitional period when it was first published, the new Construction Sector Code will not allow for any transitional period and once it is published all entities falling under the Construction Sector will have to be verified under the new amended Construction Sector Code.

ABOUT THE AUTHOR

Cornel Wessels obtained her LLB degree from the University of Stellenbosch and is an Admitted Attorney. Cornel joined SEESA in 2014 as a labour legal advisor and in August 2016 she moved to the SEESA BEE department.

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