LOCAL CONTENT VERIFICATION
Local content is Government initiative driven by the National Treasury, the dti and the Department of Mineral Resources, aimed at stimulating the manufacturing industry with a view to improving South Africa’s economic performance and increase job creation. This policy is premised on the impact the government and Mining companies spending has on the economy of the country if directed at industrialisation and job creation.
For public procurement, South African National Standard (SANS) 1286:2017 defines local content as “that portion of the tender price that is not included in the imported content, provided that local manufacturing takes place and is calculated in accordance with the local content formula”. (Standard available at https://store.sabs.co.za/. Whereas in the Mining sector is defined as the percentage local value add, the sales price in rand of the capital good, component or consumable excluding mark-up and indirect overheads and imported inputs/components used in the assembly or manufacturing.
This initiative was first introduced in the Preferential Procurement Framework Act in 2011, with an amendment that made provision for the dti to designate certain sectors for local production and content, in line with national development and industrial policies for local production. In September 2018 the Department of Mineral Resources issued the Broad-Based Socio-Economic Empowerment Charter for the Mining Industry (Mining Charter#3), which were subsequently followed by its guidelines (December 2018). Both the Charter and the Guidelines affirms the SABS as an agency appointed by the Department of Mineral Resources to carry out local content verifications.
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