The B-BBEE Act defines black people as South African citizens from African, Coloured & Indian ethnic groupings. In pre-1994 South Africa this majority of citizens were excluded from effective participation in economic activities based on race. No economy can grow by excluding any part of its people and an economy that is not growing cannot economically integrate its citizens in a meaningful way.
Although the political transformation took place during our first democratic election in 1994, South Africans still have a long way to go to create a balanced society. From a socio-economic perspective, there is still very little evidence of real sustainable transformation. The majority of our citizens are still excluded from the economy by the everyday reality of post apartheid South Africa.
Early transformation legislation, known as BEE, resulted in many companies integrating black ownership into their shareholding. This direct empowerment was a direct result of government putting pressure on business through Preferential Procurement Policies. Unfortunately, it has only been benefiting a few people. To create a healthy balanced society the scope must include broader based elements, such as human resource development (including skills development), business development and socio-economic development.
The B-BBEE programme includes various laws and regulations which governs the measurement of companies’ contributions to socio-economic transformation. The programme is not enforced by government but government provides the legislative tools. Developing and implementing a transformation strategy within the framework of B-BBEE is thus encouraged by government but not a legal requirement.
The applicable legislation simply provides an instrument for developing, implementing and measuring of transformation initiatives. This is done by means of a B-BBEE scorecard. The B-BBEE Act of 2003 and the B-BBEE the Codes of Good Practice published in 2007 provides the basic framework. Various sector specific regulations are also available for implementation. Contributions are measured against specific targets and scored out of a total of 100 points.
The program focuses on the following four areas of your business operations:
- Your company’s owners [Ownership Element]
- Your company’s people [Management Control & Employment Equity Elements]
- Your company’s suppliers [Preferential Procurement Element]
- Your company’s projects [Enterprise & Socio-Economic Development]
NOTE: “Black People” is a collective term including South African citizens form African, Coloured & Indian ethnic groups