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Wine-BEE Industry Transformation Charter and Scorecard

Category: Policy/Strategy
Date: Adopted on 30 July 2007 by the South African Wine Industry Council.
Sub Category:Policy/Strategy (South Africa)
Place:
State/Country:Republic of South Africa
Alternative Names:
  • Wine-Black Economic Empowerment Charter
  • Subject Matter:Agriculture | Collaboration / Partnership
    Summary Information:
    The Wine-BEE Industry Transformation Charter was adopted by the South African Wine Industry Council on 30 July 2007 after over three years of drafting and negotiation. The development of the Charter was driven by the South African Wine Industry Council (formerly the South African Wine and Brandy Company) and the South African Wine Industry Trust (WOSA Website, 2009). The Charter contains a statement of intent to transform the South African wine industry into one which incorporates the principles of the South African government's Black Economic Empowerment (BEE) policy. This policy is one of a range of measures being used to counteract the economic effects of apartheid in South Africa.
    Detailed Information:
    According to an Engineering News article titled 'Wine Industry Presses Ahead with BEE Charter Plan' (3 November 2003), the BEE Charter is intended to 'address racial inequality' in an industry where black ownership remains low. To this end, the Charter sets a long-term goal of 25% black ownership for the wine sector (Engineering News, 21 November 2003). It also provides frameworks for compliance with BEE policy, which are guided by the following key principles:

    - A focus on the creation of growth and new business opportunities rather than the redistribution of existing opportunities alone.
    - Encouragement of local participation as a vehicle to form meaningful partnerships.
    - A focus on the specific characteristics of various sectors along the value chain.
    - The creation of investor confidence by establishing growth with an enquiry focus, ensuring greater transparency and clear rules of the game.
    - A focus on human development as a key driver of sustainable empowerment.
    - The establishment of partnerships between industry and government.
    - A flexible approach enabling enterprises of various sizes to advance towards the targets at an appropriate pace within the Charter's overall guidelines and the law.' (The Wine Industry Transformation Charter, 14).

    In practice, the Charter aims to address:

    - direct empowerment through ownership, control of enterprises and assets;
    - human resource development and employment equity;
    - indirect empowerment through preferential procurement and enterprise development; and
    - industry-specific factors (Wineland, 2005).

    The Charter applies to the entire South African wine industry and supply chain. It also operates in conjunction with the Wine BEE Scorecard, which provides a means for evaluating the BEE performance of individual enterprises. (The Wine Industry Transformation Charter, 15).

    Implementation and Monitoring

    A Wine Industry Charter Council (the Council) will be established in accordance with the BEE Codes of Good Practice (see link below), and will be representative of stakeholders in the South African wine industry.

    Under the Charter, the Council will be responsible for the monitoring and review of the Charter, which includes various reviews, establishing an executive team which will administer guidance on the Charter and a database recording the status of BEE evaluated enterprises. The Council will also engage with the government, public sector financial insitutions and other related organisations in the promotion of the Charter's implementation. Further, the Council will produce a business plan outlining support measures for evaluated enterprises.
    Outcomes:
    The legal status of the Charter depends on its approval as a charter under s 9 of the Broad-Based Black Economic Empowerment Act (see link below. As of June 2010, however, the Charter was still waiting on approval from the government. In an article by Sasha Planting, Wine Industry Development Association CEO Denver Williams remarked that the Charter had 'died a slow death' (Planting, 2010). Meanwhile, 38% of South Africa's wine operations have succeeded in introducing empowerment initiatives in areas such as land reform and enterprise development (Planting, 2010). Furthermore, winemaker Thandi has become the world's first fully black-owned wine company, with 250 families assuming full ownership of the business (Smith, 2009).

    Aside from setbacks in the implementation of the Charter itself, there has also been criticism of the capacity of the BEE policy to address worker exploitation in the wine industry. In an article titled 'Deracialising Exploitation? 'Black Economic Empowerment' in the South African Wine Industry', Andries du Toit et al argued that BEE provides the South African wine industry with an easy way to avoid more burdensome means of addressing racial inequality, such as land redistribution and worker empowerment measures (Du Toit et al, 2008, 6, 29, 30). It did so by fostering an 'essentialist racial discourse' that allowed a few black entrepreneurs to become the beneficiaries of change while legitimating exploitative conditions for the majority of workers (6, 30). According to this article, the BEE policy's preoccupation with branding and image-building has moved the focus away from real broad-based empowerment in the wine industry - placing 'debates about change in the industry...on a conservative terrain' (7).

    Related Entries

    Organisation
  • South African Wine Industry Council (WIC)
  • Legislation
  • Broad-Based Black Economic Empowerment Act, 2003 (South Africa)
  • Policy/Strategy
  • Black Economic Empowerment
  • Apartheid
  • Broad-Based Black Economic Empowerment Codes of Good Practice

  • Glossary

    Policy/Strategy (South Africa)

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