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2005-11-08
What is BEE?
Black Economic Empowerment (BEE) is a government strategy to increase the participation of historically-disadvantaged black people in all sectors of the economy.
By transferring more management, ownership and control of the country's businesses into black hands, the government hopes to ensure broader participation in the economy by black people, and thereby redress the imbalances of the past.
Through apartheid, black people were historically excluded from full participation in the South African economy, and BEE is an important part of the country's transformation process, by redistributing wealth and opportunities to the previously disadvantaged, including women and the disabled.
BEE is also furthering economic growth, and both South African and international investors have realised the importance of the programme, investing heavily in empowerment ventures and seeking BEE partners in order to secure more business, especially government tenders. Public-private partnerships have also proved successful.
The Broad-Based Black Economic Empowerment Act No. 53 of 2003, and the Department of Trade and Industry's Broad Based BEE strategy document and Codes of Good Practice provide the legislative framework for the implementation of the government's BEE
Through the Employment Equity Act of 2000, affirmative action policies have increased the number of black people employed at most large companies and parastatals, especially at management level. To address the lack of skilled black jobseekers, the Skills Development Act of 1998 seeks to develop employment prospects for previously disadvantaged people.
Organisations such as the BEE Commission and Black Management Forum seek to increase the level of black participation in the economy, creating economic opportunities to promote empowerment.
Definitions
A black company is at least 50.1 percent economically owned by black people, and has substantial management control of the company.
A black empowered company is at least 25.1 percent owned by black interests, and has substantial management control in terms of non-executive directors.
A black woman-owned enterprise has at least 21.5 percent representation of black women at equity and management level.
A community or broad-based enterprise is one which has a shareholder which represents a group of members, such as a community, and supports a specific target group, such as community members.
A collective enterprise or co-operative is an association jointly-owned and controlled by a group.
Who can benefit?
In terms of the legislation, black people include African, Coloured and Indians. Broad-based empowerment refers to the economic empowerment of all black people, including women, youth, the disabled, and those in rural areas.
Codes
The Codes of Good Practice provide a standardised definition and framework for the measurement of broad-based BEE across the different sectors of the economy. The scorecards cover the seven elements of broad-based BEE.
Charters
Various industries came up with their own transformation charters, which express the industry's commitment to transformation. Depending on how they were gazetted, they are either not legally binding, or become legally binding and thus the same status as codes.