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ICT Charter gazetted, binding

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After almost 10 years in the making, the ICT Sector Code – or ICT Charter – has been gazetted, making the BBBEE provisions it contains binding on all companies operating in the ICT sector.

The charter was gazetted by Minister of Trade and Industry, Dr Rob Davies, and is binding until 31 April 2026, with the midterm five year review on the 31 April 2017.

It also closes the chapter of the development of a Sector Code by the ICT Steering Committee which began on 25 June 2003 when the ICT Charter was launched to the public to allow stakeholders in the industry to negotiate and agree on a charter that will

serve as transformation guidelines for the industry.

The committee concluded the work formally in the meeting of 16 February 2012, wherein it was agreed that application for gazette should be made.

Although in most aspects the sector code is aligned to the generic codes there are some key differences, including:

* The ICT sector has set a black ownership target of 30% to be achieved by entities in the sector instead of the 25% of the generic codes. The target set for equity equivalent for multinationals that qualify is also 30%.

* The main feature of the charter is a set target of 5% net profit after tax to be spend on enterprise development initiatives that are aimed at growing and developing black owned ICT enterprises. The target for the generic codes is 3% net profit after tax.

* ICT companies will spend 1,5% of net profit after tax on socio-economic development initiatives to improve the lives of communities through programmes such as ICT in education, and health. The ultimate goal is to bridge the digital divide in the country. The generic codes requires companies to spend 1% of net profit after tax.

The ICT Charter includes a sector-specific scorecard which was agreed for by the sector stakeholders to be used to determine the BEE scores of enterprises in the ICT sector. As in the generic codes, the scorecard includes the seven standard elements of BEE:  ownership, management control, employment equity, preferential procurement, skills development, enterprise development and socio-economic development (SED) initiatives.