BROAD BASED BLACK ECONOMIC EMPOWERMENT ACT 53 of 2003

1. BROAD BASED BLACK ECONOMIC EMPOWERMENT ACT 53 of 2003 Assented to 1 January 2004 Commencement – to be proclaimed

2. Aim of Act • To creating a legislative framework for promoting black economic empowerment • To empower minister to issue code of good practice and publish charters • To establish BEE Advisory Council

3. Preamble • Whereas: • Under apartheid, race was used to control access to SA’s resources and access to skills • SA economy still excludes majority from assets and advanced skills • SA economy performs below its potential because of low level of income earned and generated by this majority • Unless steps taken, SA’s stability and prosperity may be undermined for all

4. The legislation is enacted to address: • The constitutional right to equality • Increase broad based participation of black people in the economy • Promote a higher growth rate • Increase employment • promote equitable income distribution; AND • To establish a national policy on BBBEE to • Promote the economic unity of the nation • Protect the common market • Promote equal opportunity • Promote equal access to government services

5. Definitions • Black people– African Coloured and Indian • Broad based black economic empowerment –means empowerment of all black people – including – women, youth ,disabled, rural people, by way of: • Increasing black people in managing, owning and controlling enterprises and assets • Facilitating ownership and management by communities, workers, co-operatives etc • h.r.and skills development • Achieving equitable representation in all occupational categories • Preferential procurement • Investment into black enterprises

6. cont • Organ of state – national/provincial department • Municipality • Parliament • Provincial legislature • etc

7. Objectives of the act • To facilitate bbbee by: • Promoting economic transformation enabling meaningful participation of blacks in the economy • Changing racial composition of ownership and management and skilled occupations of existing and new enterprises • Increasing community, worker ownership – and their access to economic activities, infrastructure and skills training

8. Objectives of the act cont • Increasing black women ownership and management -and their access to economic activities, infrastructure and skills training • Promoting investment programmes that lead to blacks fully participating in the economy • Empowering rural an local communities by enabling access to economic activities land ownership and skills • Promoting access to finance for black economic empowerment

9. interpretation • Interpret so as to give effect to these objectives • So as to comply with the Constitution

10. BEE ADVISORY COUNCIL • MUST: • Advise gov’t on black economic empowerment • Review progress • Advise on codes of good practice • If requested advise on draft charters • Facilitate partnerships between state and the private sector • COMPOSITION INCLUDES: • The president = chairperson • Minister of Trade and Industry • 3 cabinet ministers • Between 10 and 15 members representing: • Unions • Business • Community organisations • academics

11. CODES OF GOOD PRACTICE • Minister may issue codes that may include: • Interpretation of bee and definition of different categories of black empowerment entities • Preferential procurement qualification criteria • Indicators to measure bee and the weighting to be attached to these indicators • Guidelines on drafting of charters • Codes may specify • Targets consistent with the objectives of the act • Period within which to achieve targets • To promote S9(2) of the Constitution – and to promote equality of woman, code targets can distinguish between black men and black women

12. Code cont • Code Status – state and public entities to apply if and where possible, in: • Considering issuing of licences, concessions, or other authorisations • Implementing preferential procurement policy • Determining qualification criteria for sale of state owned enterprises • Criteria for partnerships with the private sector

13. Strategy for BEE • Minister must issue a BEE strategy which must: • Provide an integrated approach to BEE by state, public entities, the private sector, NGO’s, local communities • Develop a plan for financing BEE • Provide a system for preparation of BEE plans and to report on the plans

14. Transformation Charters • Minister will publish and promote a charter if satisfied it has: • Been developed by major stakeholders in the sector • Advances the Act

15. Support an Services of Council • The DTI to support the Council with funds approved by Parliament