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Broad-Based Black Economic Empowerment Act, 2003 (South Africa)

Category: Legislation
Binomial Name: Government of the Republic of South Africa
Date: 7 January 2004
Sub Category:Legislation
Location:Republic of South Africa
Subject Matter:Economic Development
URL: http://www.dti.gov.za/bee/BEEAct-2003-2004.pdf
Summary Information:
The Broad-Based Black Economic Empowerment Act, 2003 ('the BEE Act'), is the main piece of legislation supporting the South African government's Black Economic Empowerment policy. According to its Preamble, it was enacted to:

  • 'increase broad-based and effective participation of black people in the economy and promote a higher growth rate, increased employment and more equitable income distribution; and
  • establish a national policy on broad-based black economic empowerment so as to promote the economic unity of the nation, protect the common market, and promote equal opportunity and equal access to government services.'
  • Detailed Information:
    Objectives of the Act

    As outlined in s 2, the objectives of the BEE Act are to facilitate broad-based black empowerment by:

    promoting economic transformation and investment programmes in order to enable the broad-based and meaningful participation of black people in the economy;
    achieving a substantial change in the racial composition of ownership and management structures, as well as skilled occupations;
    increasing the extent to which communities, collective enterprises and women own and manage new and existing enterprises, and enhancing their access to economic activities, infrastructure and skills training;
    empowering rural and local communities by improving access to economic activities, land, infrastructure, ownership and skills; and
    promoting access to finance for black economic empowerment.

    In s 1, the BEE Act defines 'black people' as a 'generic term which means Africans, Coloureds and Indians'.

    The Black Economic Empowerment Council

    In s 4, the Act also establishes the Black Economic Empowerment Advisory Council, whose functions include advising the government on the policy and progress of black economic empowerment and facilitating partnerships between the state and the private sector (s 5). The composition of the Council and the appointment of its members, as well as its Constitution and rules, are provided for in ss 6 and 7.

    Codes of good practice

    The Broad-Based Black Economic Empowerment policy is overseen by the Department of Trade and Industry. As per s 9 of the BEE Act, the Minister of this Department may issue codes of good practice that prescribe legally enforceable targets consistent with the Act, as well as time periods in which these targets should be met.

    The Broad-Based Black Economic Empowerment Codes of Good Practice are now in effect, after being issued on 9 February 2007 under the BEE Act. For more information on the Codes of Good Practice, please refer to the links provided below.

    Industry transformation charters

    In the lead-up to the passing of the BEE Act in 2004, a number of industries prepared charters on BEE and transformation. Some of these charters contained scorecards that were loosely based on the Minister's Strategy for Broad-Based Economic Empowerment (2003), while others were merely undertakings of commitment to change (Department of Trade and Industry, Background to, Intention and Application of the Codes of Good Practice, 1).

    In s 12 of the BEE Act, it is stipulated that the Minister must publish and promote an industry transformation charter if he or she is satisfied that it has been developed by the major stakeholders in the sector, and that it advances the objectives of the Act.

    For some examples of industry transformation charters, please refer to the links below.
    Outcomes:
    The policy of broad-based black economic empowerment behind the BEE Act has received a mixed response, especially after the issuing of the Broad-Based Black Economic Empowerment Codes of Good Practice. For an overview of the outcomes and verdicts of this policy, please refer to the ATNS Database entry for the Codes of Good Practice, for which a link has been provided below.

    Related Entries

    Agreement
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  • Sasol Inzalo Black Economic Empowerment ('BEE') Transaction
  • Sasol Mining Pty Ltd and Ixia Coal Pty Ltd Black Economic Empowerment (BEE) Transaction
  • Organisation
  • Financial Sector Charter Council
  • Tourism BEE (Black Economic Empowerment) Charter Council
  • Black Economic Empowerment Advisory Council
  • AgriBEE Charter Council
  • South African Supplier Development Agency
  • Legislation
  • Constitution of the Republic of South Africa 1996
  • Employment Equity Act 1998 (South Africa)
  • Policy/Strategy
  • Black Economic Empowerment
  • Apartheid
  • Broad-Based Socio-Economic Empowerment Charter for the South African Mining Industry
  • Wine-BEE Industry Transformation Charter and Scorecard
  • Broad-Based Black Economic Empowerment Transformation Charter for Agriculture
  • Financial Sector Charter on Black Economic Empowerment
  • Charter for the South African Petroleum and Liquid Fuels Industry
  • Tourism BEE Industry Transformation Charter and Scorecard
  • Construction Sector Broad-Based Black Economic Empowerment Charter
  • Draft Black Economic Empowerment Charter for the Information and Communication Technology (ICT) Sector
  • Broad-Based Black Economic Empowerment Codes of Good Practice

  • References

    General Reference
    South African Government (7 January 2004) Broad-Based Black Economic Empowerment Act, 2003
    South African Department of Trade and Industry South Africa's Economic Transformation: A Strategy for Broad-Based Black Economic Empowerment
    South African Department of Trade and Industry (6 December 2006) Codes of Good Practice for Broad-Based Black Economic Empowerment
    Article
    Stephanie Nieuwoudt (26 August 2009) 'South Africa's Black Economic Empowerment Has Failed'
    Carla Thomaz (21 August 2009) Concerted Mindset Change Stimulus for Success of BEE
    Chris Bathembu (18 February 2011) Zuma Calls for Inclusive Economy
    Media Release
    Department of Trade and Industry (South Africa) (6 April 2010) Minister Davies Says BEE Compliance is Low
    Resource
    SouthAfrica.info Black Economic Empowerment: Codes for Better BEE

    Documents

    Document
    Broad-Based Black Economic Empowerment Act, 2003 - ( PDF)

    Glossary

    Legislation

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