B-BBEE defence sector codes gazetted

Tuesday, November 13, 2018

The pace of transformation of the defence sector in South Africa is expected to gain traction with the gazetting of the Defence Sector Code, in terms of Section 9(1) of the Broad-Based Black Economic Empowerment Amendment Act.

The sector codes were gazetted by Minister of Trade and Industry, Rob Davies, who said they will also enable sector specific transformation of the defence industry.

According to Davies, the process of the development of the Defence Sector Code was made possible by the leadership of the Ministry of Defence and Military Veterans (DOD) as well as Armscor, and collaboration with industry to develop sector-specific transformation guidelines.

“The analysis of the comments that we received during the 60 days public commentary period shows that there was general support for this sector code. Public comments and inputs from the commentary period did enhance the content of the sector code,” said Davies.

The process to develop a sector code for the defence sector flows from the launch of the National Defence Industry Council, where it was agreed that a team has to be established to develop a sector code.

A team which comprises the DOD, Armscor, South African Aerospace Maritime and Defence Industries Association (AMD), amongst others, was established to drive the process of consultation, negotiation and drafting of the sector code. The code is a product of that process.

“All entities operating in the South African defence industry, in its entirety, including national or provincial departments, state-owned and private enterprises will from the date of gazette of the sector code be measured according to its provisions.

“This includes those entities providing products and services to the State – whether they are procured from local or foreign-owned enterprises, defence manufacturing enterprises, research and development enterprises and other entities, as well as any role-player and stakeholder that might opt in,” said Davies.


The key highlight of the sector code stipulates that companies must procure at least 60% of defence materials produced locally, as well as locally produced technologies.

“Localisation is a very important instrument to improve our industries and to grow our economy. We, therefore, applaud the defence sector for creating a link between localisation and empowerment in this sector code,” said Davies.

The other key highlight is that the black ownership target has been increased to 30%, which is higher than the 25% benchmark of the generic codes.

The Minister reiterated that the Defence Sector Code aims, within the South African Defence Sector, to give effect to the constitutionally enshrined right to equality by addressing the effects of systemic past exclusion of black people from participating in the economy. 

The Minister of Defence and Military Veterans, Nosiviwe Mapisa-Nqakula, will soon appoint a Sector Charter Council to monitor implementation of the sector code and to conduct regular reviews.

Go to http://www.thedti.gov.za/gazzettes/42021.pdf to access to the defence sector code. - SAnews.gov.za