The Department of Defence and its acquisition vehicle Armaments Corporation of South Africa (Armscor) has released a draft of the Defence Sector Charter for public comment.
The charter aims to accelerate black-economic empowerment in the defence industry over three years, setting an ownership target of 25% in the first year, 30% in the second year, and 35% by the third year. Black female ownership should amount to 10% in the first and second year, and 15% by the third year.
The charter further aims to promote the growth of technical innovation in the South African defence sector, as well as encourage its growth as a profitable and sustainable industry.
Further, the charter sets out to stimulate local manufacturing capability for local and export purposes. It states that companies must procure a minimum of 40% of goods and services from black-owned enterprises. In instances where this is not possible, exemption may be obtained from the Defence Charter Council.
The charter also seeks to advance the acquisition, retention and transfer of critical, technical and scarce skills in South Africa’s defence industry. It suggests that 4% of skills development expenditure should be spent on learning programmes for black people, 1% should be spent on learning programmes for military veterans and 1% should be transferred to establish a defence skills development fund for purposes of critical and scarce skills.
Negotiations will be held with government to exempt companies in the defence industry that already contribute to the Defence Industry Skills Development Fund, from contributing to the scarce skills programme.
The charter recognises military veterans as a special designated group within the South African defence industry.
The final stage of the consultation process will result in stakeholders’ adoption of the draft sector charter, after which it will be submitted to Minister of Defence and Military Veterans Nosiviwe Mapisa-Nqakula.
After receiving the sector-adopted charter from the defence ministry, Trade and Industry Minister Dr Rob Davies will publish it for public comment and thereafter submit it for publication in the government gazette.