A model corporate social investment policy should contain the following elements: - Introduction
- Definitions
- Policy
- Procedure
- Responsibility
- Policy Review
Each one of these sections will be explained individually. The explanation will be followed by a model example using Dream Holidays as the name of the fictitious company for whom the policy applies. 1) Introduction The introduction defines why the policy is necessary and what the company hopes to achieve through the use of the policy. - To steer the economy towards a stable environment that nurtures growth and increases the country's economic competitiveness.
- To foster a synergistic relationship between private and public sector to embrace social investment as a common vision.
- To develop a wider economic base and maintain profitable business standards.
- To broaden the tax base.
- To enlarge the supplier base to reflect the dynamics of the consumer/customer base.
- To indirectly create jobs and raise the standard of living.
- To assist with the transfer of skills and technology to previously disadvantaged individuals.
- To foster an entrepreneurship culture amongst previously disadvantaged groups.
- To create a climate where diversity is valued and regarded as strength.
Dream Holidays will employ the guiding principles outlined in the Tourism Charter. This will give the company the opportunity to encourage activities that will foster socio-economic growth and development in the Tourism Sector. Thus, providing gain for black communities geared at social development. Back to Top 2) Definitions Definitions should clearly and unambiguously define terms and abbreviations that are used in the document. BEE: Black Economic Empowerment Black people: refer to African, Indian and Coloured South African citizens.
CSI: Corporate Social Investment DEAT: Department of Environmental Affairs and Tourism
Employees with no prior working experience: refer to those employees who have no formal employment experience prior to joining an enterprise in tourism. Formal employment does not include learnerships, traineeships or short-term and temporary assignments.
Indicators:represent the key measurement yardsticks included to determine the BEE contribution made by tourism enterprises within each broad-based BEE factor of Ownership, Strategic Representation, Employment Equity, Skills Development, Preferential Procurement, Enterprise Development, Social Development and Industry Specific.
NGO: Non Governmental Organisation
Social Development Contributions: whether by spend or employee time contributions of Dream Holidays, which is measured by the Scorecard, relates solely to initiatives targeted for the benefit of black people. This can include, but is not limited to the following: - Education programmes;
- Community programmes;
- Job creation initiatives;
- Health programmes;
- Conservation;
- Community tourism initiatives; and
- Participation in marketing initiatives to develop the local black tourist market, especially those initiatives accredited and recognized by DEAT and TBCSA.
Targets: represent the ideal scenario at which the tourism enterprise will score full points for the respective indicator. Tourism enterprises under measurement may score proportional points on each indicator, according to the proportion of the relevant target achieved for that particular indicator. Two targets were set for each indicator, namely: a 2009 milestone to be used during the first five years of implementation, ending on 31 December 2009 and a 2014 target, ending on 31 December 2014. The 2009 targets should be used by all companies measuring the BEE status of a tourism enterprise until 31 December 2009. The overall BEE targets for 2014 should be used when one measures the BEE status of a tourism enterprise in the five-year period between 1 January 2010 and 31 December 2014.
TBCSA: Tourism Business Council of South Africa
TOMSA: Tourism Marketing South Africa
TOMSA Levy Collectors: refers to tourism enterprises that are registered to raise funds on behalf of the trust. Total Employee Time: refers to the total working hours calculated as the product of the total number of employees and their standard working hours. Weightings of each factor: reflect the relative importance that the Sector places thereon. The seven core factors of BEE are weighted to bring the Scorecard to a maximum of 100 percent. Back to Top 3) Policy The Policy should clearly and unambiguously outline what the exact corporate social investment policy of the company is. Additionally, the policy will clarify the motivation for and merits of adopting it. Dream Holidays has developed a corporate social investment policy and guidelines that will contribute towards overall economic growth and transformation of the country. The company is committed to establishing relations that will uplift the black communities through education, health and other social investment activities. The CSI spend can be of two forms: the post-tax profits spent or else the percentage of management time over the total employee time that is spent on education, community and industry specific programmes, job creation, training, health, conservation, community tourism and marketing activities to develop the local black tourist market. Recruit permanent employees with no prior working experience and by registering Dream Holidays as an enterprise to raise funds on behalf of TOMSA, will enhance the company's CSI efforts. Back to Top 4) Procedures Procedures will outline the method that the company will implement in order for it to realise the aims as outlined in the policy. Ensure that levies to TOMSA are collected and recorded. Identify areas in which Dream Holidays would be able to employ staff with no prior work experience at all. These recruits need to account for 10% of all new recruits. Ways of identifying such recruits include sourcing from high schools in surrounding areas. Working together with the principals of these schools and the co-operation and input of principals and teachers will help to source staff on their recommendation, which will increase the company's chances of employing the right people and will help it reach its BEE targets. Dream Holidays will need to spend 1% of post-tax profits (or 1% of total employee time) on education, community programmes, job creation, training, health and conservation and on community tourism and marketing activities to develop the local black tourist market. It is important to remember that the majority of the beneficiaries of this social development spend should be black. One of the most efficient ways of meeting this target is to identify charity organisations and NGO's whom the company can co-operate with to identify beneficiaries and projects. Social Development is weighted at 3 percent for the first five years, for the period ending 31 December 2009 and at 6 percent for the last 5 years, for the period ending 31 December 2014.
The indicators for Social Development are similar to the measures for Enterprise Development. The indicators measure the percentage of post-tax profits that a company contributes toward Social Development or employee time invested in Social Development as a percentage of total employee time. The target set for the periods ending 31 December 2009 and 2014 respectively, is 1 percent. Two Industry Specific indicators have been identified by the tourism sector. These relate to the ability of the industry to create jobs and to market South Africa as a preferred tourism destination. These indicators are: - Recruitment of employees with no prior working experience; and
- The status of the tourism enterprise as a TOMSA levy collector. In this regard, the implementers of the Tourism Charter will urge marketing bodies benefiting from TOMSA funds to ensure that these funds are used to further the interests of black people in all aspects of tourism.
Industry Specific factors are weighted at a total of 5 percent in the first five years, for the period ending 31 December 2009, and 4 percent during the second five-year period, ending 31 December 2014. Three percent of the weighting is allocated to the status of a tourism enterprise as a TOMSA levy collector for both periods, ending 31 December 2009 and 31 December 2014 respectively. Two percent of the weighting has been allocated to the recruitment of black people with no prior work experience for the period ending 31 December 2009 and 1 percent has been allocated to this for the period ending 31 December 2014. A target of 10 percent has been set for the percentage of new recruits with no prior work experience during the 12 months prior to their prospective employment, within ten years of the commencement of this Charter, for the period ending 31 December 2014. This indicator is proposed to decrease the number of unemployed people who have had no prior work experience, through participation in the industry. Calculating the Corporate Social Investment Score of Dream Holidays: Social Development and Industry Specific Information | Social Development Spend | R 300 | Post-tax Profit | R 100 000 | New recruits with no prior work experience | 1 out of 8 employees | TOMSA Levy collector | Yes |
Before calculating raw scores to discover whether targets have been met or not, first calculate the actual percentages, as described by each indicator to measure BEE achievement: Sub-Indicator Calculations | % Spend of Post-Tax profits on Social Development: = Social Development Spend/ Post-tax profits = R300/ R100 000 = 0.3% | % of New Recruits with no Prior Work Experience = No. of new recruits with no prior work experience/ total employees = 1/8 = 12.5% | Target % New Recruits with no prior work experience: 10% | Target % Social Development Spend: 1% |
Calculating Social Development | Social Development Spend Calculation | Raw Score = % social development spend/ social development target 2009 = 0.3%/ 1% = 30% Target has not been met in full. | BEE Score = raw score X sub-weighting = 30% X 3% = 0.9% | % New Recruits Calculation | Raw Score = % new recruits with no prior work experience/ new recruits target 2009 = 12.5%/ 10% = 125% (capped at 100%) = 100% Target has been met in full. | BEE Score = raw score X sub-weighting = 100% X 2% = 2% | Status of TOMSA Levy Collector | Raw Score = Is the enterprise a TOMSA levy collector? Yes/ No = Yes = 100% Target has been met. | BEE Score = raw score X sub-weighting = 100% X 3% = 3% |
To calculate the overall BEE score for Social Development & Industry Specific, add up the points for each sub-indicator: = (Social Development Spend) + (% New Recruits) + (Status as TOMSA Levy Collector) = 0.9% + 2% + 3% = 5.9% Dream Holidays did not meet all of their targets for Corporate Social Investment and therefore achieved 5.9% out of a possible total of 8%. Back to Top 5) Responsibility
Responsibility outlines the person who is responsible for ensuring that policies are abided by. It is the responsibility of departmental heads and the document owner to ensure that the CSI Policy and Procedure is adhered to and all employees are fully briefed and acquainted with the procedure. Back to Top 6) Policy Review The section outlines if and when a reassessment of the policy will take place. This policy will be reviewed as and when business dictates such a review. Back to Top |