SEDSA
Sustainable Economic Development SA

What is BBBEE?     

Black Economic Empowerment (BEE) is part of the South African government’s overall strategy to develop the economy in a way that can meet the needs of all South Africans in a sustainable manner. It has been launched by the  to redress the inequalities of Apartheid by giving previously disadvantaged groups (black Africans, Coloureds and Indians) economic opportunuties previously not available to them. It includes measures such as Employment Equity, skills development, ownership, management, socio-economic development and preferential procurement. 

In a comprehensive BBBEE Strategy Document (which you can read on the DTI’s website) – government explains how the strategy aims to redress the economic discrimination of the past and stimulate growth, employment and equity in the economy.  

After the end of Apartheid in 1994 and with the advent of majority rule, control of big business in both the public and private sectors still rested primarily in the hands of white individuals. According to Statistics South Africa, Whites comprise just under 10% of the population, meaning that most of the country's economy was controlled by a very small minority. BEE is intended to transform the economy to be representative of the demographic make-up of the country. 

The process of BBBEE really got started with the RDP Program (1994) and over the years has been fuelled by numerous other laws like the Employment Equity Act;  Competition Act; Preferential Procurement Policy Framework Act and others. But many of these strategies were fragmented and resulted in BEE lacking real focus. This all changed with the promulgation of the Broad-Based Black Economic Empowerment Act 2003 (Act No. 53 of 2003) which was passed into law on 6 January 2004. The BBBEE Act empowered the Minister of Trade and Industry to issue Codes of Good Practice on BBBEE (the Codes).

The BBBEE Act does not enforce legal compliance to BEE (it is only law for State enterprises to comply). It is an enterprise’s customers that are driving compliance! Customers (and government – if it is your customer) are the ones that want to know your BEE score as it will contribute to their score. If you don’t get a score, there are no fines or other penalties, it simply means that it will be more difficult to win business.