Financial+Sector+Charter+Council+Dec+13+statement

=**FINANCIAL SECTOR CHARTER COUNCIL**=


 * 14 December, 2005**


 * Media statement – for immediate release**

The Financial Sector Charter Council held its final meeting of the year on 13 December, 2005. The Council reached agreement on a number of key issues which will enable companies in the sector to fully implement all Charter commitments and prepare 2005 Charter reports.

The Charter Council was established in 2004 as a representative body bringing together established industries in the financial sector, government, black business and professionals, and the Nedlac Community and Labour constituencies. Its mandate is to oversee and monitor the implementation of the charter.

In the past year, the Council has focused on finalising definitions, interpretations and  measurement parameters, as well as reviewing and setting Charter targets.

The principle commitments made by the sector, amongst others, include:
 * Improving access to financial services for low income communities;
 * Increasing investment in low-income housing (R42bn), small and medium black-owned enterprise (R5bn), agriculture (R1.5bn) and transformational infrastructure (R25bn);
 * Increasing funding for BEE transaction financing;
 * Accelerating employment equity and skills development within the sector;
 * Increasing procurement from BEE-accredited enterprises; and
 * Achieving BEE ownership and control targets.

Ten committees were set up by the Charter Council to address these and other aspects of implementing the Charter. Most of the committees have completed their work and reported their findings and recommendations to the Council. While some issues remain outstanding and require further discussion, in general there is agreement on definitions, measurement and targets, including the following:

In all areas of targeted investment financing, the Charter Council will continue to work closely with government to design risk sharing and risk mitigation mechanisms. While partnerships with government are important, companies in the sector are committed to demonstrating greater levels of innovation in doing business in targeted investment areas.

In particular, in transformational infrastructure, the sector will fast track its planning, to identify projects and financing models to enable to contribute to meeting infrastructure requirements. In relation to its low-income housing target, the Council confirmed its commitment to providing R42 billion in low-income housing finance by 2008 and to working with government and other Charter participants to achieve this target.

The standards for access to banking, long-term, short-term and collective investments were approved by the Council. The standards include physical accessibility, appropriateness, affordability and fair value, simplicity and understandibility and non-discrimination. The standards give companies the opportunity to design new products and services to address access needs. The access committee has also completed work on standards to measure consumer education. In terms of these standards, it has been agreed that the Charter Council will co-ordinate integrated and appropriate consumer education initiatives across the sectors. A scoring mechanism has been agreed for access which lays the basis for each company to measure their contributions from 2006.

It was also agreed that the Council will ensure that research on the needs of the target market and the impact of Charter initiatives will be undertaken on an ongoing basis to better inform the Charter access product offerings. In BEE transaction financing, it has been agreed that R1bn will go towards funding co-operatives. The Charter Council also noted the important role black private equity funds could play in achieving Charter’s objectives. To this end a meeting of key participants will be convened to define how to incentivise the sector to utilise black private equity partners. Subsequent to the issuing of the final version of the Codes of Good Practice 000, 100 and 200, by the Department of Trade and Industry, the Charter Council has applied for the conversion of the charter into a Code under Section 9 of the BBBEE Act (No. 53 of 2003). The Council is mindful of the fact that the Charter may have to be aligned to the codes, insofar as definitions and measurement is concerned. In principle a commitment has already been made from next year to voluntarily align to the employment equity and procurement elements of the Codes. All financial sector companies are required to submit reports for the 2005 calender year to the Council by 31March 2006. To assist in the finalisation of the reports, the Council will issue guidance notes by 16 January indicating: The Council elected a new chairperson to succeed inaugural chairperson Ronnie Napier of the SA Insurance Association, whose term of office had expired. Jan Mahlangu of the Nedlac Labour constituency was unanimously elected chairperson of the Council for 2006. The Charter Council is confident that all stakeholders remain committed to the spirit of the Charter and its full implementation. The Charter is a breakthrough in efforts to develop strategies for stronger growth, higher investment, black economic empowerment and extending financial services to all Moreover, it has forged a critical partnership between civil society, the private sector business and the state, which will ensure the achievement of the Charter’s goals by 2014.
 * The manner in which companies will report and are measured based on the FSC as it currently stands; and
 * A process and criteria for accrediting verification agencies to perform FSC audits.

Enoch Godongwana Principal Officer FS Charter Council For further information, please contact: Email	enochg@fscharter Tel 	011 838-6966 Fax 	011 838-6965 Cell 	0823352748