Black Economic Empowerment (BEE) is an important factor in the South African business environment and still a subject of debate. However, there is consensus that national wealth should be more widely created and evenly distributed among all population groups. Laws have been put in place and funds made available for black people to own businesses. But ownership is only one facet of the empowerment progress; in order to be meaningful, empowerment must be broad based. More black people are becoming professionals, managers, technicians or engineers through active learnerships and skills development programmes. Both the private and the public sectors are involved in reaching BEE objectives and measuring progress in reaching a more equitable society.The Broad Based Black Empowerment Act (2003) aims at achieving BEE objectives.
Codes of Good Practice
The Codes of Good Practice on B-BBEE were gazetted on the 9th of February 2007 making them binding on all organs of state and public entities. This means that, as per section 10 of the BEE Act, government must apply the Codes when entering into decisions affecting the following areas:
Procurement
Licensing and concessions
Public private partnerships (‘PPP’s’)
The sale of state-owned entities
In order to do business in South Africa, companies must satisfy empowerment criteria. Sectoral charters and the balanced scorecard are the main elements in achieving goals and assessing progress. However, the government is flexible in dealing with foreign investors on a case-by-case basis. It is possible to compensate for business ownership by ensuring that black business is supported in procurement and training. In addition, socially responsibility initiatives should be emphasized.
The recently introduced Black Economic Empowerment Codes aim to bring more black players into the ownership and running of companies.
Companies with turnovers of under R5 million annually will be exempt from the BEE measures. Those with turnovers of between R5 and R35 million will have to adhere to four of the seven codes. Large companies will be scored according to all seven. http://www.thedti.gov.za/bee/Inside.pdf
