Black economic empowerment and economic performance

Advantages and disadvantages of black economic empowerment pdf

At Norton Rose Fulbright we intend to use the BEE strategies that we devise for you to help achieve this goal and to ensure that our services brings the BEE Level result you desire as well as helping to transform South Africa. For example, in terms of the Mineral and Petroleum Resources Development Act, an entity must have 26 per cent Black ownership in order to be issued with a mining right. Assist in the development of the operational and financial capacity of BEE enterprises, especially small, medium and micro enterprises SMMEs and black- owned enterprises. The Constitution of the Republic of South Africa, , provides all people in South Africa the right to equality and fulfils the formal element of equality by creating a basis for equal treatment. In such cases, the codes allow for contributions in lieu of a direct sale of equity. BEE objectives Through its BEE policy, the government aims to achieve the following objectives: Empower more black people to own and manage enterprises. The definition is the same as that of the Black Economic Empowerment Act of which states that "black people" is a generic term which means Black Africans, Coloureds and Indians and included provisions to ensure that they must have been South African citizens prior to Based on public and stakeholder comments, the final codes were adjusted and gazetted. Accordingly, one should not simply focus on a BEE score but, rather, the interplay between the level of Black ownership, BEE score, and commercial attractiveness to customers. Transacting with private entities With regards to interactions with private entities, a company will score better for BEE itself if it procures goods and services from other entities with high BEE ratings.

In addition, entities in certain industries may be asked to indicate their transformation initiatives which can be different to a BEE score in terms of the BEE Codes in order to obtain concessions to, for example, export. These new Codes provided for a transitional period of 1 year 6 months.

A high BEE score can, therefore result in the bidder achieving a better total score than another bidder with a low BEE score even though the bidders have similar scores for the pricing portions of their bids.

impact of bee on south african economy

Increase the extent to which communities, workers, co-operatives and other collective enterprises own and manage existing and new enterprises, and increase their access to economic activities, infrastructure and skills.

Private companies must apply the codes if they want to do business with any government enterprise or organ of state — that is, to tender for business, apply for licences and concessions, enter into public-private partnerships, or buy state-owned assets.

Obtaining licences, consents, or concessions from organs of state Certain industries require an entity to have a particular percentage of Black ownership or BEE level in order to receive and maintain a licence to operate.

advantages and disadvantages of black economic empowerment pdf

BEE objectives Through its BEE policy, the government aims to achieve the following objectives: Empower more black people to own and manage enterprises. A company is measured against the scorecard in order to determine its BEE score.

Broad-based black economic empowerment BEE is a government policy to advance economic transformation and enhance the economic participation of Black people African, Coloured and Indian people who are South African citizens in the South African economy.

black economic empowerment criticism

Suppliers to mining companies should also be aware that mining companies have specific BEE procurement obligations. The changes include the consolidation of duplicate elements such as Employment Equity and Management Control and Preferential Procurement and Enterprise Development.

Black economic empowerment and economic performance

Assist in the development of the operational and financial capacity of BEE enterprises, especially small, medium and micro enterprises SMMEs and black- owned enterprises. Companies are also encouraged to apply the codes in their interactions with one another, since preferential procurement will affect most private companies throughout the supply chain. Equity Equivalent Investment Programme for multinationals The codes of good practice allow foreign multinational companies that do business in South Africa some flexibility in how they structure their empowerment deals. At Norton Rose Fulbright we intend to use the BEE strategies that we devise for you to help achieve this goal and to ensure that our services brings the BEE Level result you desire as well as helping to transform South Africa. Broad-based black economic empowerment, or B-BBEE, is a strategy to ensure all South Africans are able to meaningfully participate in the mainstream economy. Due to the nature of the preferential procurement element, a customer may prefer to procure from an entity with a low overall BEE score but high Black people and Black women ownership as that supplier will provide the customer with more preferential procurement points towards its own BEE score than a supplier with low Black ownership but a higher BEE score. The legislation was developed through numerous task teams and have taken more than 3 years to be gazetted since the first Act December and the first Codes of Good Practice released in November which addressed Statement and Private companies must apply the codes if they want to do business with any government enterprise or organ of state — that is, to tender for business, apply for licences and concessions, enter into public-private partnerships, or buy state-owned assets. Download the codes of good practice from the Broad-based black economic empowerment page on the DTI website The codes require that all entities operating in the South African economy make a contribution towards the objectives of BEE. Tweet on Twitter Black economic empowerment BEE is not simply a moral imperative to redress the inhumane policies of apartheid. Whilst these obligations do not bind the suppliers themselves, suppliers should ensure that they have appropriate corporate structures so that they are commercially attractive suppliers to mining companies. The history of South Africa has resulted in an economic and opportunities disparity based on race and has resulted in many Black people in South Africa not enjoying the same opportunities and so being substantively equal to the remainder of South Africa. Obtaining licences, consents, or concessions from organs of state Certain industries require an entity to have a particular percentage of Black ownership or BEE level in order to receive and maintain a licence to operate.

Based on public and stakeholder comments, the final codes were adjusted and gazetted. Our second focus is to create sustainable and multi-year BEE strategies which allow you to grow your supply chain over time to assist in the transformation of your sector, whilst ensuring quality and competitive suppliers and service providers for you to procure from in the future.

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Black economic empowerment