AgriBEE applies to the entire South African agricultural sector, including primary production, distribution, provision of services, processing and allied activities. However, the Charter will apply in a qualified manner with regards to enterprises with a total revenue between R5 million and R35 million ('Qualifying Small Enterprises'), and enterprises with a 5 year moving average turnover of less than R5 million ('Exempted Micro Enterprises').
The Charter was adopted under section 12 of the Broad Based Black Economic Empowerment Act 2003 on 9 February 2007, which renders it a statement of intent but does not create legally binding obligations.
The vision of AgriBEE is of 'a united and prosperous agriculture sector designed to meet the challenges of constrained global competitiveness and low profitability, skewed participation, low investor confidence, inadequate support and delivery systems and poor and unsustainable management of natural resources' (AgriBEE, Introduction). Specific objectives of AgriBEE include achieving extensive change in the racial composition of ownership and management structures, as well as improved representation of black women, persons living with disabilities and youth in ownership and management of new agricultural enterprises.
The seven key indicators included in the Charter are:
enterprise development; and,
rural development, poverty alleviation and corporate social investment.
The ‘Indicators’ include specific obligations for government, farming enterprises and Agri-Industry participants (defined as established agribusiness and farming enterprises with a predominately white management, ownership and control structure).
Implementation and the Scorecard
The Charter will be monitored and implemented by the AgriBEE Charter Council ('the Charter Council') who will report to the Black Economic Empowerment Advisory Council. The scorecard, which will test compliance with the Charter, is an important component of the Framework. The scorecard shall determine a business’ likelihood of attracting contracts. Qualifying Small Enterprises will be subject to a variation of the targets contained in the Scorecard.
The Scorecard includes indicator targets under each BEE element. Targets include:
25% exercisable voting rights by black people (including 10% by black women);
Contribution to achieving 30% land transfer, with one bonus point per percentage of land transferred above 30%;
50% Executive Members of the Board who are black people (including 25% black women);
80% black people employed by the enterprise at skilled technical and academically qualified workers, junior management, supervisors, foremen and superintendents as a percentage of these employees;
2% investment in skills development spent on black employees as a percentage of leviable amount.
The Sanlam Cobalt Website explains that although there will be no prosecutions for non-compliance, ‘market forces will determine compliance as those agribusinesses that don't comply will increasingly be marginalized, and eventually be influenced negatively by the rest of the economy.’
Criticism and Support
According to a News 24.com report, the Draft Framework for Agriculture of July 2004 was criticised by TAU SA, a farmer representative body, who asserted that the Framework would 'destroy the principle of property rights and the free market system which will result in the loss of valuable assets to individuals and groups.' TAU SA viewed the use of the term black as 'blatant racism.'
In contrast, AfricaNews reports that the National African Farmers Union (NAFU) President has praised AgriBEE and stated that coupled with the use of biofuels, AgriBEE presented an 'excellent opportunity to involve emerging farmers as crop producers and at the same time fulfilling black economic empowerment imperatives.'