State of transformation and empowerment in the South African construction Sector

Port Harcourt

The baseline report is an important process and milestone intended to assess the accurate state of transformation and empowerment in the construction sector for the period June 2009 and June 2013 (the reporting period). In particularit is intended to provide substantive clarity on levels of compliance with construction sector code by designated Measured Entities.

The release of the baseline report on the 24th April 2014 by the Construction Sector Charter Council (CSCC) has revealed the state of empowerment and transformation in South Africa and the challenges that still need to be addressed.

The construction industry is showing progress towards transformation as well as showing enhanced and significant levels of compliance with the construction sector (CSC). In respect of QSEs- the overall BBBEE level contributor status has increased to an average level 3 (three) status and is showingan upward movement.In respect of Large Enterprises- Overall BBBEE contribution showing an average Level 4 (four contributor status, but none has so far achieved a level 1 (one), explainedFelix Fongoqa, Construction Sector Charter Council (CSCC) Chairperson.

The study further indicates that Black and Black Women Ownership has increased in all sizes of the construction sector measured entities over the reporting period but shows polarization in both extremes (either no black ownership or there is 100 percent black ownership).

Significant progress has been noticed on Employment Equity [EE], Preferential Procurement [PP] and Enterprise Development [ED] elements that have increased popularity across the entire construction sector, added Fongoqa.

Despite the progress indicated by the baseline study, the data and information presents a number challenges which the CSCC needs to tackle as a matter of urgency. The absence of reliable data and scorecard information to assess levels of detailed compliance, as well as the insufficient data to analyze the movement of construction sector utilities.

The study also revealed glaring areas of inaccurate industry classification of Measured Entities, and lack of industry insistence to be measured in terms of the Construction Sector code, which is a serious cause for concern.

There is a wide belief amongst South Africans that the construction sector is the least transformed industry, despite the efforts by the government to redress the imbalances caused by years of apartheid.
The 2010 collusion by the major South African construction companies who were involved in anti-competitive practices during the construction of South Africa’s world cup stadiums further strengthened the idea that the sector is the least transformed industry.

“Ordinarily, any collusive behavior and conduct will have a negative impact on the participation and entrance of new players. Though the Construction Industry Development Board (CIDB) is yet to complete its own investigation, from the Construction Sector Charter Council (CSCC)’s point of view, collusion generally has a negative effect on growth and transformation in the sense that it robs the state of the opportunity to use construction projects to allocate work to empowered black companies, especially black women owned firms’, Explains Thabo Masombuka, CEO for the Construction Sector Charter Council.

After the baseline report, the CSCC will engage in effectively enforcing and monitoring interventions that will not only ensure that there is effective monitoring of the implementations of the Construction Sector Codes (CSC), but there are best practice initiatives to drive broad based participation.

Building sustainable industries within the context of the country’s empowerment imperatives is a complex process that requires more than simply ticking the right boxes. Meaningful socio-economic transformation is essential to the future viability of South Africa, especially in relation to the levels of social and economic inequality that persists in South Africa.

He Construction Sector Charter was initiated by construction industry stakeholders and a former Minister of Public Works, the late Ms Stella Sigcau at the beginning of 2006, and thus applies to all stakeholders in the creation, expansion and maintenance of fixed assets related to residential or non-residential buildings, infrastructure or other form of construction in South Africa.

In addition,the Construction Sector Code was gazette by the Minister of Trade and Industry in June 2009 in Section 9 (1) of the Broad Based Black Economic Empowerment Act 53 of 2003, and then inOctober 2012 Construction Sector Charter Council was registered in order to oversee and monitor the implementation of the Construction Codes of Good Practice by the industry.

The objectives of the Construction Sector Charter include, but are not limited to promoting the achievement of a transformed, empowered and a vibrant, competitive and sustainable construction sector.

Compounding the problem was the absence of reliable data to map the changes in transformation, hence the Construction Sector Charter Council initiated a detailed assessment of the industry’s transformation, which will inform future programs and interventions.In addition, the report is vital for broad and consolidated understanding of where the industry (its sub-layers) has performed, as well as providing the Department of Trade and Industry (DTI) and the Public Works with the information on the transformation progress on an annual basis, adds Masombuka, the CEO.

A concerted effort is needed from all role players in the construction industry. Leading construction companies have a role to play in transforming the construction sector, though the extent to which these are meaningful and effective remain arguable, but it is possible.


Please enter your comment!
Please enter your name here