New BEE code for defence sector

Trade & industry minister Rob Davies has gazetted the broadbased BEE sector code for the defence sector in a bid to accelerate the pace of transformation in the industry.

The code requires companies to procure at least 60% of their defence materials and technologies from local producers. Another 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 emphasised the importance of localisation to improve industry and grow the economy. “We therefore applaud the defence sector for creating a link between localisation and empowerment in this sector code.

“All entities operating in the SA defence industry in its entirety, including national or provincial departments, stateowned and private enterprises, will from the date of gazette of the sector code be measured according to its provisions,” he said on Monday.

Defence & military veterans minister Nosiviwe Mapisa-Nqakula will appoint a sector charter council to monitor implementation of the code.

The preamble notes the decline in local spending in the industry, exclusion of black military veterans, the inability of SA defence businesses to expand into Africa, and over-reliance on foreign enterprises.