1. 1 – FILENAME South African Port Operations BEE SUPPLIER POLICY AND STRATEGY SOUTH AFRICAN PORT OPERATIONS

2. 2 – FILENAME South African Port Operations SAPO PROCUREMENT POLICY STRIVES TO promote the effective and efficient development of suppliers and contractors from previously disadvantaged communities Ensure that these suppliers build sustainable businesses and in so doing build long term relationships with SAPO’s business units Ensure that SAPO continues to receive a service of the highest quality at competitive prices

3. 3 – FILENAME South African Port Operations TENDER EVALUATION All tenders need to be technically and commercially compliant. Thereafter evaluation weighting is as follows; For contracts of less than R500,000 a weighting of 80% on price and 20% on BEE For contracts exceeding R500,000 a weighting of 90% on price and 10% on BEE

4. 4 – FILENAME South African Port Operations BEE EVALUATION IS BASED ON THE FOLLOWING BEE Shareholding and voting rights Active Management & Employment equity within the company Gender – promotion of female owned business Promotion of business owned by disabled persons Procurement policies within the company Community and social responsibility

5. 5 – FILENAME South African Port Operations SHAREHOLDING & VOTING RIGHTS Require proof of Shareholding eg. Share certificates Joint ventures will be evaluated on effective % of the JV held by HDI’s eg Traditional supplier enters into a 50/50 JV with a company that has 40% BEE shareholding. JV will be rated at 50% of 40% = 20% BEE Voting rights must be reflective of shareholding

6. 6 – FILENAME South African Port Operations ACTIVE MANAGEMENT & EMPLOYMENT EQUITY Preference is given where the BEE shareholders are active participants in the management of the company as opposed to merely “investors” Evidence of genuine skills transfer to promote continued involvement and sustainability of the individuals in the business Employment equity polices of the enterprise

7. 7 – FILENAME South African Port Operations PROCUREMENT POLICIES / SOCIAL RESPONSIBILITY Preference is given to enterprises that also promote the use of BEE subcontractors or service providers Enterprises that play an active social responsibility role are recognised eg. Building of a clinic in a previously disadvantaged community

8. 8 – FILENAME South African Port Operations PRESENT STRATEGY Increasing procurement management resources at SAPO HQ and port level Advertise in appropriate media eg Ilanga, Sowetan, Isolezwe Stipulate BEE participation in tender documents E-procurement business is only awarded to BEE suppliers Relaxation of customary requirements for performance and retention guarantees depending on scope of work and risk

9. 9 – FILENAME South African Port Operations PRESENT STRATEGY (cont) Setting of internal BEE spend targets – for this year it is set at 45% of total spend Certain categories of business is specifically set aside for enterprises owned by females and/or disabled members of the community eg. At Durban port all stationery, refreshments and catering requirements will be allocated to this group

10. 10 – FILENAME South African Port Operations PRESENT STRATEGY (cont) Campaigns to educate the supplier base of our requirements and to create awareness of the opportunities. We have held BEE Open days at Durban – February 2003 Richards Bay – January & September 2003 Saldanah – July 2002 Cape Town – April 2003

11. 11 – FILENAME South African Port Operations CONCLUSION SAPO has achieved our initial objectives for promotion of BEE opportunities in the port operations environment Our intention is to refine and better manage this process going forward to ensure we are assisting in the creation of long-term and sustainable empowerment opportunities We are committed to ensuring that this is a transparent and fair process in compliance with good corporate governance

12. 12 – FILENAME South African Port Operations Thank you