Gazetted by the dti in February , it provides a framework for the measuring of BEE in terms of seven elements: ownership; management control; employment equity; skills development; preferential procurement; enterprise development; and socio-economic development, and contains criteria for the exemption of qualifying small enterprises.
Importantly, the Council was to facilitate partnerships between organs of state and the private sector to advance the objectives of the Act. BEE has come a long way since the first empowerment deal back in , and has moved on from a narrow-based approach, where the focus was entirely on black ownership and management, to encompass all the relevant spheres of economic activity.
Even though the private sector need not comply from a legal perspective, there are sufficient economic reasons for large corporations to comply and ensure that their service providers and suppliers are as compliant as possible. Thus, the private sector has an economic incentive to comply, in addition to the moral imperative. We cannot expect to grow and develop as a country if the leadership of the economy is still in the hands of only a small minority of society.
BEE verification agencies will have to work in stricter conditions under the watchful eye of the Independent Board of Auditors. On a more positive note, they are likely to have more clients seeking BEE certificates. It is certainly no secret that South Africa has one of the highest inequality rates in the world. Apartheid widened the gap between the rich and the poor by systematically excluding black people from participating in the economy. The Amendment Bill is a proposal to substantiate the existing BEE Act so as to achieve the objectives of a more equal distribution of wealth, income, skills and employment.
The Codes of Good Practice outlines key dimensions of transformation that, to some extent, indirectly promote the education and training of black people.
For instance, under the Skills Development element, enterprises earn points for training and developing black people. Mentoring and supporting black businesses also contributes towards training in the Enterprise Development element. Furthermore, the Socio-Economic Development initiatives such as donations to predominantly black schools advance the education cause. The only drawback for business enterprises is that all these are done at their own cost.
White-owned businesses have a bigger challenge when seeking tenders. There are only two options for white-owned businesses wanting to win a government contract — accept the rules on black economic empowerment and transform, or cheat.
Although this may sound harsh, the regulations brought about by the Bill are necessary to accelerate economic transformation and empowerment. Economic growth can only be truly meaningful by bringing in previously disadvantaged people into the mainstream of the economy. Another school of thought suggests that these amendments are actually counterproductive.
Consequently unemployment will rise, increasing poverty. It thus becomes imperative that business organisations understand that BEE is not about black people taking over white-or foreign- owned businesses but is about sharing a piece of the pie for mutual benefit. Qualifying small enterprise means an entity with an annual turnover in excess of R50 million in the BEE Codes.
Transport accounts for a fifth of all global greenhouse gas emissions, and for many people the evolution from internal combustion to electric vehicles will be one of the most visible and easy to comprehend facets of the energy transition. Subscribe and stay up to date with the latest legal news, information and events Use of cookies by Norton Rose Fulbright.
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Since its inception, the concept of BBBEE and the legislative framework regulating it have evolved significantly. Prior to , many South African companies took active steps to redress the inequities created by Apartheid. For example, during the s, and in response to international sanctions imposed against South Africa, the Sullivan Principles were adopted by US multi-nationals with operations in South Africa. In other cases, foreign companies disinvested from South Africa or refused to purchase goods produced by South African companies.
In , South Africa's first democratic government was elected with a clear mandate to redress the inequalities of the past. This mandate is embodied in the Constitution of the Republic of South Africa. The Constitution enshrines the right of all South Africans to equality and section 9 2 of the Bill of Rights provides for specific measures to be taken to redress historical imbalances. After , various steps were taken by the State to dismantle Apartheid and progress the goals contemplated in section 9 2 of the Bill of Rights.
The State introduced the Reconstruction and Development Programme the RDP which set out a comprehensive plan for addressing identified socio-economic consequences of Apartheid. The priorities of the national budget were re-orientated in line with the RDP. It is aimed at redressing the imbalances of the past by seeking to substantially and equitably transfer and confer the ownership, management and control of South Africa's financial and economic resources to the majority of its citizens.
It seeks to ensure broader and meaningful participation in the economy by black people in order to achieve sustainable development and prosperity.
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