The History of BEE in South Africa

What is BEE?

BEE refers to measures, actions or programmatic steps geared to enable meaningful participation of black people in the economic mainstream. It is a response to our particular reality born of racial capitalism, the fusion of apartheid with the capitalist system.

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Rationale for BEE

The BEE commission, chaired by Cyril Ramaphosa, and assisted by Saki Macozoma, Derek Cooper, Patrice Motsepe, Gloria Serobe, Danisa Baloyi, Buhle Mthethwa, Vuyo Jack, Ronnie Ntuli, Loyiso Mbabane, Imogen Mkhize, Alan Hirsch, Philisiwe Buthelezi and Lionel October, broadly outlined BEE in a 2000 report, which led to the government's implementation of BEE.

Many companies see it not only as a moral obligation, but also as a business reality. Its aim is to incorporate a substantial amount of skilled black workers (African, Coloured and Indian) into the workforce.

Black Economic Empowerment led to the creation of Broad Based Black Economic Empowerment, as many groups felt BEE did not live up to its objectives. The government introduced the Broad Based Black Economic Empowerment Act 53 of 2003.

With BBBEE, ownership is only one of seven criteria upon which a company's empowerment score is calculated.The purpose of BBBEE is to create economic empowerment for the many groups who were not on an equal footing: all black people, women, youth, the disabled, and those in rural areas.

A company's Employment Equity policy is just one way in which to measure its transformation. Affirmative Action exclusively led to more positions being filled by black candidates; BBBEE, however, strives toward the implementation of the following seven pillars:

Equity Ownership Management Employment Equity Skills Development Preferential Procurement Enterprise Development Residual Element/Corporate Social Investment

Of these, Employment Equity account for only 10 percent.

The first set of Codes of Good Practice, released on 1 November 2005, dealt mostly with Ownership and Management. The second set was released on 20 December 2005 and these dealt with special codes for SMMEs (small, medium and micro enterprises).

The final Codes of Good Practice, which deals with Scorecards, Small Enterprises and Skills Development, amongst others, were released on 9 February 2007.

Definitions

A black company is one that is at least 50.1 percent owned by black people.

A black empowered company is at least 25.1 percent owned by black groups.

A black woman-owned enterprise is represented by at least 21.5 percent of black women at equity and management level.

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The History of BEE in South Africa

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