Introduction

As of 6 June 2025, the CIPC and DTIC have introduced Sector Charter Councils into the B‑BBEE certification framework. These councils oversee sector-specific charters, monitor compliance, and require businesses to submit B‑BBEE certificates or affidavits according to their SIC code and sector council designation South African Tourism+14CIPC+14Accounting Weekly+14.

These changes elevate sector compliance obligations—especially for Emerging Micro Enterprises (EMEs) and small businesses. Let’s explore what sector councils are, how they impact you, and what you must do.

What Are Sector Charter Councils?

Sector Charter Councils are industry-specific regulatory bodies—each aligned to a sector charter or code approved under the B‑BBEE Act. They are tasked with:

Setting and monitoring sector-specific empowerment rules
Collecting annual compliance reports from measured entities
Submitting transformation status reports to the Minister and B‑BBEE Commission Accounting Academy Accounting Weekly Webber Wentzel+3CIPC+3Beeratings+3 Beeratings+1Webber Wentzel+1

Only charters gazetted under Section 9 or 12 of the B‑BBEE Act carry legal weight—binding businesses within the sector DTIC.

Why This Matters for Your Business

✅ Sector-Driven Compliance

Your SIC code, now required on B‑BBEE filings, determines which sector charter applies to your business. Using an incorrect code could misalign your compliance obligations and impact your certificate validity Wikipedia+14Accounting Weekly+14CIPC+14.

✅ Mandatory Submissions

All measured entities must file their B‑BBEE certificates, affidavits, or verified scorecards with both CIPC and their relevant Sector Charter Council annually Beeratings+6CIPC+6Accounting Academy+6.

✅ Improved Oversight

Sector Charter Councils report the state of transformation in their industries to the Minister, who then submits it to the B‑BBEE Commission. Non-compliance can lead to audit requests or remedial measures Beeratings+1Accounting Academy+1.

What Changes for EMEs and Small Businesses

⚙️ New Certification Process via CIPC

EMEs (≤ R10 million turnover) can continue applying for B‑BBEE certificates via CIPC. However, the application now requires:

Selection of the appropriate Sector Charter Council
Accurate SIC code designation
Distinction between South African Black citizens and permanent-resident Black individuals CIPC+9Accounting Weekly+9Accounting Academy+9 Beeratings

🧾 Affidavits for Foreign Directors

If your EME includes foreign directors, you’re not eligible for online certificates. Instead, you’ll complete a commissioned affidavit, which serves as your B‑BBEE certificate. Fabricating statements or data is a criminal offense under B‑BBEE legislation Accounting Academy+2CIPC+2Accounting Weekly+2.

Sector Charter Councils: Operational Overview

✔️ Charter Creation and Application

Charter Councils develop codes through stakeholder consultation and must align to the Generic Codes of Good Practice. For instance, sector charters for ICT, finance, and property include specific targets for black ownership, management control, procurement, and training investment DTIC.

📅 Annual Reporting Duties

Entities operating under a sector code must file compliance reports annually with their Sector Charter Council, as mandated by Section 10(4) of the B‑BBEE Act. Councils aggregate these reports, highlight industry transformation gaps, and forward them to the Minister for review Webber Wentzel.

📊 B‑BBEE Commission Oversight

The B‑BBEE Commission reviews sector council reports, provides feedback, and can require entities to align with Section 13G obligations—particularly for public entities and JSE-listed firms. Non-compliance may lead to rejection or enforcement action Beeratings.

Sector Examples and Charter Highlights

Financial Sector Charter: includes unique additional indicator “Access to Financial Services” and mandates transformation across ownership, procurement, skills development, and socio-economic investment Wikipedia+2BBBeewise+2Wikipedia+2.
ICT Charter: aims for 30% black ownership and mandatory net‑profit enterprise development spend of 5%, plus socio‑economic contributions BBBeewise.
Agriculture Charter: prioritises land reform participation and enterprise development beyond the generic 30% targets BBBeewise nda.gov.za.

How It Affects Your B‑BBEE Compliance Journey

Step-by-Step Checklist

Identify your SIC code via SARS and confirm your relevant Sector Charter Council CIPC+1Accounting Weekly+1.
Complete B‑BBEE affidavit or certificate application via CIPC, ensuring correct SIC and charter fields are completed.
Submit your certificate or affidavit to both CIPC and the Sector Charter Council.
Prepare sector-specific compliance reports annually, following the charter matrix requirements.
Monitor feedback from councils or the B‑BBEE Commission (e.g., revisions to scorecards or transformation plans).

Common Pitfalls & How to Avoid Them

Misclassifying your SIC code → misaligned targets or invalid certification
Not submitting B‑BBEE docs to sector council → non‑compliance flagged
Ignoring sector-specific elements outside generic codes (e.g. access to finance, land reform)
Missing annual reporting cycles → B‑BBEE Commission intervention possible

Tips to Make Compliance Simpler

Seek assistance from a B‑BBEE consultant familiar with your sector charter
Keep detailed records showing compliance progress and transformation initiatives
Align your supplier development and procurement policies with sector obligations
Archive your annual scorecards, affidavits and submission receipts for audit purposes

Frequently Asked Questions (FAQs)

Do all businesses need to submit to a Sector Charter Council?

Only those measured under a sector code. Generic-code businesses remain under the standard frameworks.

What if my business is in multiple sectors?

Choose the primary SIC code that reflects your main line of business. You may require multi-sector reporting if you operate widely.

Are sector charters mandatory?

Yes—once gazetted under Section 9 of the B‑BBEE Act, sector codes become fully binding on entities in that industry Beeratings DTIC.

Can a business voluntarily comply if not required?

Yes. Voluntary adoption of sector charters may strengthen scorecards and support industry reputation, especially for public contracts.

Final Thoughts

The introduction of Sector Charter Councils marks a significant evolution in B‑BBEE compliance. Correct SIC classification, timely reporting, and adherence to sector-specific codes are no longer optional—they’re legally required for credible B‑BBEE status.

Sector Charter Councils and Their Role in B‑BBEE Compliance