The construction sector has been caught with its pants down after failing to reach agreement on the alignment of its sector specific code with the Department of Trade and Industry’s amended generic codes of good practice.

This follows the department last week gazetting a notice repealing with immediate effect the construction and chartered accountancy sectors codes because these codes had not been submitted for approval and were not aligned with the amended codes.

Differences of opinion between the established and emerging construction sectors on ownership percentages are believed to have been the major reason for agreement not being reached on a new construction sector code.

Companies kept in the dark

Deon Oberholzer, the chief executive of VeriCom, an accredited verification and black economic empowerment (BEE) consultancy agency, said with most companies facing their fiscal year end in 10 days’ time, they have been kept in the dark about whether they should be complying with their original or an amended sector code.

“Those companies that opted to wait until things are finalised, now face the grim reality that they will most probably see their BEE score reduced dramatically due to the more stringent requirements of the amended codes with little or no time to react,” he said.

But Chris Campbell, the chief executive of Consulting Engineers South Africa, said it was fortuitous many companies in the sector were believed to have been gearing their businesses up to comply with the new generic codes because there was a clear indication the new proposed construction codes would not be ready in time.

Campbell said the sector was still working on a code for the construction sector and most stakeholders were concerned about the uncertainty caused by this situation.

Certainty

“Many members are running a business and most would have wanted some form of certainty and to have been given more direction on how to plan for the coming period,” he said.

Pierre Fourie, the operations directors at Master Builders South Africa (MBSA), said BBBEE certificates had a 12-month validity period and those companies whose certificates were close to or past their validity date would now be measured against the amended generic codes.

But Fourie believed some companies anticipated the sector codes would be repealed and had recently updated their ratings certificates against the sector code.

Fourie said the codes were complex and it was not possible to lift out any specific problematical issues that had resulted in agreement not being reached on a new sector code.

The initial deadline for the sector charters to be aligned with the new generic codes of good practice was the end of April last year.

The department extended the deadline until November 15, but warned that all existing sector codes that had not been submitted by this date would be repealed.

–IOL (Roy Cokayne)