On 28 October 2015, we reported on the trumping provision of the Broad‐Based Black Economic Empowerment Amendment Act 46 of 2013, which came into force and effect on 24 October 2015.

The enforcement of the trumping provision created a lot of uncertainty in the industry, especially as to the status of the existing Sector Codes. This uncertainty has, however, since been clarified by the Department of Trade and Industry (the “DTI”).

On 2 November 2015, the DTI announced that all Sector Charter Councils now have until 15 November 2015 (extended from 30 October 2015) to submit their aligned Sector Codes to the Minister of Trade and Industry for approval (ie, they need not be finally gazetted), failing which such Sector Codes will be repealed. Once a Sector Code has been repealed, entities operating in the affected sector will be measured under the Codes of Good Practice (the “Amended Codes”), which came into force and effect on 1 May 2015.

As previously stated, there may be severe implications for those affected entities, which may have to be measured under the Amended Codes, as opposed to the applicable Sector Code. Not only may this be costly for such affected entities, but it could also have an impact on their contributory level and, consequently, their ability to obtain certain licences and approvals, or to be awarded certain contracts.

Written by Sanjay Kassen, director, corporate commercial; and Parusha Desai Valodia, associate, corporate commercial, ENSafrica