Black Economic Empowerment
Black Economic Empowerment (BEE) is a policy of the South African government which aims to facilitate broader participation in the economy by black people. A form of affirmative action, it is intended especially to redress the inequalities created by apartheid. The policy provides incentives – especially preferential treatment in government procurement processes – to businesses which contribute to black economic empowerment according to several measurable criteria, including through partial or majority black ownership, hiring black employees, and contracting with black-owned suppliers. The preferential procurement aspect of BEE has been viewed as paradigmatic of a sustainable procurement approach, whereby government procurement is used to advance social policy objectives.[1] So-called "BEE deals" – transactions aiming to increase black ownership of large businesses – have been conducted on a large scale, with BEE transactions concluded between 1994 and 2005 valued at between R150 billion[2] and R285 billion.[3]
For the employment equity in South Africa, see Affirmative action § South Africa.
The government has subscribed to an explicit policy of black economic empowerment since 1994, but BEE was relaunched as the more comprehensive, and less ownership-focused, Broad-Based Black Economic Empowerment (BBBEE) programme around the time of the passage of the BBBEE legislation in 2003.[1][4] However, although earlier initiatives were governed by different legislation and sets of arrangements, the underlying principles and policy are very similar, and BBBEE is often still referred to as "BEE" in common parlance.
In June 2021, President Cyril Ramaphosa announced that South Africa's BEE strategy and legislation would be reviewed, especially to ensure that they are not exploited for corrupt purposes.[5]
Broad-based Black Economic Empowerment Act, 2003
History[edit]
Early policy[edit]
When the African National Congress (ANC) came to power in 1994, the new government's priorities included redressing apartheid's legacy of economic exclusion. Under apartheid, legislation and practice had restricted the access of non-Whites to job opportunities, capital, business and property ownership, and other forms of economic advancement, leaving vast racial inequalities in wealth and income.[1] The new Constitution, finalised in 1996, emphasised protections against unfair discrimination and against disadvantage arising from the same. This was complemented by a 1997 Green Paper on Public Procurement Reform, which called for affirmative action measures in government procurement processes.[1]
Definition of "black"[edit]
The BBBEE Act defines black persons as "Africans, Coloureds and Indians,"[10] who, as of an amendment to the act in 2013, are South African citizens by birth or descent or were naturalised as South African citizens prior to 27 April 1994 (or would have been eligible for naturalisation prior to that date).[16] This definition excluded ethnically Chinese citizens from becoming beneficiaries of the legislation. The government argued that, although Chinese people had been subject to discrimination under apartheid, that discrimination had been applied inconsistently and was less clearcut than that experienced by other non-white groups.[17] For example, although Chinese people were treated as coloured under some legislation, from 1984 they were exempt from the discriminatory provisions of the Group Areas Act.[18] In 2008, arbitrating a legal challenge by the Chinese Association of South Africa, the Pretoria High Court ruled that the South African Chinese community were "black" for the purposes of the BBBEE Act, as well as the Employment Equity Act.[17][19]