This is the first of a series of circulars examining the
development of Broad-Based Black Economic Empowerment
(BBBEE) in South Africa.
Since its inception, the concept of BBBEE and the legislative
framework regulating it have evolved significantly. The purpose of
this circular is to provide you with an understanding of the
history of BBBEE in South Africa.
HISTORY OF BBBEE
Prior to 1994, many South African companies took active steps to
redress the inequities created by Apartheid.
For example, during the 1980s, and in response to international
sanctions imposed against South Africa, the Sullivan Principles
were adopted by US multi-nationals with operations in South Africa.
In other cases, foreign companies disinvested from South Africa or
refused to purchase goods produced by South African companies.
In 1994, South Africa's first democratic government was
elected with a clear mandate to redress the inequalities of the
past. This mandate is embodied in the Constitution of the Republic
of South Africa. The Constitution enshrines the right of all South
Africans to equality and section 9(2) of the Bill of Rights
provides for specific measures to be taken to redress historical
After 1994, various steps were taken by the State to dismantle
Apartheid and progress the goals contemplated in section 9(2) of
the Bill of Rights.
The State introduced the Reconstruction and Development
Programme (the RDP) which set out a comprehensive
plan for addressing identified socio-economic consequences of
Apartheid. The priorities of the national budget were re-orientated
in line with the RDP.
Various key new Acts of Parliament were passed including the
Restitution of Land Rights Act, the Extension of Security of Tenure
Act, the Employment Equity Act, the Preferential Procurement Policy
Framework Act and the Minerals and Petroleum Resources Development
BBBEE was defined formally, for the first time, in the 2001 BEE
Commission Report as:
"an integrated and coherent socio-economic process...
It is aimed at redressing the imbalances of the past by seeking to
substantially and equitably transfer and confer the ownership,
management and control of South Africa's financial and economic
resources to the majority of its citizens. It seeks to ensure
broader and meaningful participation in the economy by black people
in order to achieve sustainable development and
prosperity." (BEE Commission Report, page 2)
The BBBEE process culminated in the passing of the Broad-Based
Black Economic Empowerment Act 53 of 2003 (BBBEE
Act) into law on 7 January 2004.
CURRENT BBBEE LEGISLATIVE FRAMEWORK
The BBBEE Act provides the legislative framework for BBBEE in
South Africa. The objectives of the BBBEE Act include the
facilitation of BBBEE by promoting economic transformation in order
to enable meaningful participation of black people in the
The Broad-Based Black Economic Empowerment Amendment Act
(BBBEE Amendment Act) was assented to by the
President on 23 January 2014 and came into operation on 24 October
2014. The BBBEE Amendment Act will bring about significant changes
to the way in which BBBEE is regulated in South Africa.
These changes are considered in the next circular in this
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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