8th June 2016

Department of Trade & Industry

Private Bag X84,

0001 GautengPretoria

Via email:

Attention: Mr Jacob Maphuth & Ms Mologadi Leshiba

Dear BBBEE Sector Code Unit

Please find commentary from the South African Association of Freight Forwarders (SAAFF) for page 101, for the Forwarding and Clearing Sub-sector charter for large and QSE enterprises.

  1. EMPOWERING SUPPLIER – Annexure 1

SAAFF proposals are clarified in the text of the attached Word document and highlighted in RED pertaining to points (a), (b) and (c) ofthe Empowering Supplier Criteria, please see attached.

  1. FORWARDING & CLEARING SUB-SECTOR CHARTER FOR LARGE AND QSE ENTERPRISES – Annexure 2
  1. We have aligned the summary tables to the allocated points of each element.
  2. We have re-formatted the Forwarding & Clearing Sub-sector Charter in Word and made commentaries and clarifications which are highlighted in RED – see Annexure 2 – the pages are listed – commentary had been made.

The commentaries that are highlighted in PURPLE are just for clarity.

  1. We are concerned about the disjuncture between the scorecard 25% ownership target and the Procurements points in the ESD element. For instance, a company with BBBEE level 1 certificate using the scorecard criteria can at very best only contribute around 3 points of the 5 points of the allocated 27 points its client/customers base. We believe this is a risk as companies might not find the scorecard aspirational relative to the Procurement allocated points. This needs to be reviewed specifically in the generic and other industry charters.

The industry appreciates the engagement that we have had with the DoT and yourselves since the 9th July 2014 on a critical transformational tool which will have a lasting impact on our sub-sector.

Yours faithfully

The South African Association of Freight Forwarders

David Logan

Chief Executive Officer

ANNEXURE 1

INDUSTRY COMMENT ON EMPOWERING SUPPLIER CRITERIA

INDUSTRY COMMENT ON EMPOWERING SUPPLIER CRITERIA

Point (a):

“At least 25% of cost of salesexcluding labour cost and depreciation must be procured from local producers or local suppliers in South Africa, for the service industry labour cost are included but capped to 15%.”

Due to the unique nature of our industry of International Import Logistics, SAAFF proposes that in the Empowering Supplier criteria point a, that the word “Discretionary” should be used when calculating the “Cost of Sales”.

The reason for this is as follows:

A large proportion of our “cost of sales” is the international movement costs to South Africa which is determined by the foreign exporter – Ex-works and Free on Board, costs such as Packaging, Handling, Pre-carriage, Freight etc.

If the Overseas agent or office secures the business, we have no choice but to pay the freight in USD$ from South Africa, we should not have to include this amount in the calculation because we have no control over the shipping terms of the Supplier.

Therefore point (a) should read as follows:

“At least 25% of cost of sales, based on Discretionary costs only, excluding labour cost and depreciation must be procured from local producers or local suppliers in South Africa, for service industry labour cost are included but capped to 15%.”

Point (b): Should read as follows:

Job creation – 50% of jobs created are for Black people provided that the number of Black employees since the immediate prior verified BBBEE Measurement is maintained. Where, due to restructuring the company headcount is legally altered in terms of the Labour Relations Act during a measured period, the new post restructured headcount shall be base line for calculation.

Point (c): Should read as follows:

At least 25% transformation of raw material/beneficiation, which include manufacturing, production and /or assembly, and / or packaging, as well as the refurbishing concepts of re-use, reduce and re-cycling.

We request that inclusion be taken into account, as our industry does not extract commodities in the mining sense but could play a very useful role in the refurbishing of materials.

ANNEXURE 2

DRAFT AMENDED FORWARDING AND CLEARING SUB-SECTOR

BROAD-BASED BLACK

ECONOMIC EMPOWERMENT SUB-SECTOR CODE

Large Companies Scorecard

Page

19/45Point 18Skills Development Guiding Principle

19/47Point 19 Skills Development Mandatory list

20/47Point 19 Skills Development Mandatory list

21/47Point 19 Skills Development Mandatory list

25/47Point 22 ESD Guiding Principle

26/47Point 22 ESD Guiding Principle

30/47Point 25 SED Guiding Principle

QSE Companies Scorecard

35/47Point 32 SD Key Measurement Principles

37/47Point 34 ESD Key Measurement Principles

38/47Point 36 SED Key Measurement Principles

Definitions

45/47Absorption – aligning definition to skills development table on page 19/47 point 17 – Bonus Points