28 October 2005
Click here to view the Revised Draft of the Health Charter - 28 October 2005 (PDF)
We appreciate the opportunity to brief you on the progress that has been made towards the finalization of the Charter for the Health Sector.
Our approach in developing the Charter has been to ensure that this becomes an inclusive process that allows all stakeholders an opportunity to make inputs. Our goal is to have a document that should be adopted by all health stakeholders as a statement of our collective commitment to improving access, equity and quality of healthcare and overall transformation of this sector.
As you are aware, the initial draft of the Charter was published for comment in July this year. Thereafter, the Task Team that developed the Charter took account of some 61 written submissions and in addition, heard presentations from 28 stakeholder organisations. The inputs represented the views and interests of a wide range of sub-sectors that exist in this field.
The most important question today would be what has changed in this document as compared to the earlier draft. There has been an effort to harmonize the Charter of the Health Sector with other charters that have already been adopted in other sectors.
The Health Charter is unique in that it makes provision for a replacement offering of up to 5% of the ownership target for Broad Based Black Economic Empowerment with a view of strengthening the public health sector. It therefore encourages stakeholders who may not, for some valid reason be able to attain the full extent of the targets, to benefit the public health sector as an alternative. In this way, there will be a very direct link between the implementation of BBBEE and the strengthening of the public health sector.
SMMEs for instance, constitute 35% of the SA market for medical devices. Due to their relative size and resources, SMME may find it impossible to comply with some of the targets. Therefore, companies that can demonstrate that compliance with the Charter scorecard will cause inherent commercial harm to their business are exempted particularly with regard to ownership and discretionary and non-discretionary procurement targets.
However, these companies can make contribution towards the objectives of the Charter in terms of funding, skills and time dedicated towards collaborative projects with the public sector. Such replacement offerings may include skills development within the enterprise, funding of training and development of health professionals or active participation in Public Private Initiatives.
A similar approach will apply to independent professional practices, not-for-profit and non-governmental organisations. Independent practices are also bound by legal and ethical rules with regard to ownership and involvement in certain enterprises to discourage perverse incentives and undesirable business practices.
Foreign owned companies face limitations in terms of implementation of Broad-Based Black Economic Empowerment and therefore they have an option of replacement offerings to support the objectives of the Charter. These companies should:
Our ultimate goal as a nation with a history of segregation and inequalities is to transform all of our socio-economic activities to reflect the demographics of the country relating particularly to employment, ownership and procurement. However, the current reality is that there are still limitations in terms of skills supply, financing of ownership transfers and local options for discretionary and non-discretionary procurement. We have, therefore, set the targets in these areas at what we believe is achievable under the current circumstances.
The Charter commits all parties to develop programmes that should ensure our workplaces will be 40% black across the value chain and will comprise 30% women by 2010. This representation should rise to at least 60% black and 50% women by 2014.
Black people must have 31% of the total economic interest in enterprises within the health sector by the year 2014. Black women must hold at least 15% of the share to be held by black people by the year 2014. If the target cannot be met in full, up to 5% of that economic interest may be in the form of replacement offerings aimed at strengthening the public health sector.
At least 40% of all procurement shall be from black empowered firms or black persons by 2010 and this should increase to 60% by 2014. The private sector also commits to spend a fixed proportion of their annual income on social responsibility projects.
We are grateful to all the organisations that made submissions and presentations, for the commitment they have demonstrated in seeking to enrich this document. The changes that have been made reflect clearly the due consideration of all inputs and efforts made to accommodate as much as possible the interests of various sub-sectors in the transformation of the health sector.
We are releasing this document today to allow all stakeholders an ample opportunity to consider it. We are planning to have a meeting within the next month where we will be asking the stakeholders to consider this document for adoption as a Charter of the Health Sector.
Dr Manto Tshabalala-Msimang
Minister of Health