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Moonstone | 24 April 2025 In a twist on the old movie industry saying of “hurry up and wait”, designated employers who have been waiting for clarity on the employment equity regulations must now shift into high gear. The long-awaited regulations have officially come into effect, signalling a move from voluntary to mandatory compliance as of 15 April. The 2025 Employment Equity Act (EEA) Regulations significantly raise the bar for compliance, introducing stricter enforcement mechanisms and placing a sharp focus on sector-specific numerical targets that must be met over a five-year period. Designated employers – those with 50 or more employees or organs of state, regardless of staff size – are now required to develop and implement an Employment Equity Plan for the period 1 September 2025 to 31 August 2030. Employers who become designated after 1 April 2025 will need to draft a plan covering the remainder of this five-year timeframe. According to the fifth edition of the Employment Equity Amendments and 2025 EEA Regulations Guideline , published by law firm Cliffe Dekker Hofmeyr (CDH), employers have until 31 August 2025 to conduct a workplace analysis and either draft new or amend existing Employment Equity Plans to align with the amended legislative framework and prescribed sector targets. The 2025 reporting period opens on 1 September 2025 and runs until 15 January 2026. During this window, the Department of Employment and Labour (DoEL) will begin issuing the first certificates of compliance. However, employers will not be assessed on their progress towards achieving the five-year sectoral targets during this initial cycle. That changes in 2026. From 1 September 2026 to 15 January 2027, employers will undergo their first evaluation against the annual targets as part of assessing their progress in achieving the five-year goals. Designated employers and sectoral targets On 15 April, the Minister of Employment and Labour, Nomakhosazana Meth, released the final versions of the Determination of Sectoral Numerical Targets and the Employment Equity Regulations 2025 . Together, these are referred to as the 2025 EEA Regulations. They replace the 2014 regulations and follow the implementation of the Employment Equity Amendment Act of 2022, which officially came into force on 1 January 2025. According to CDH, the EEA applies broadly to all employers operating in South Africa, excluding the military, intelligence services, and secret service. However, sections 12 to 27 – covering affirmative action – apply only to “designated employers”, a group now narrowed by the Amendment Act. The revised definition excludes employers with fewer than 50 employees, regardless of turnover, easing the compliance burden on small businesses. Although these smaller employers are exempt from submitting equity plans and reports, they may still apply for a compliance certificate under section 53 of the EEA – but more on that later. The updated General Administrative EE Regulations provide standardised forms for reporting (EEA2 and EEA4), templates for equity analysis and planning (EEA12 and EEA13), and details about compliance certification. These tools aim to help employers understand and apply the new rules more easily, whether they are designated or non-designated employers. The final sector target regulations set out five-year numerical employment equity targets for “designated groups” across 18 economic sectors, including finance, manufacturing, healthcare, education, and construction. Each sector has a single set of targets based on gender and covering four upper occupational levels: top and senior management, professionally qualified and middle management, and skilled technical roles. People with disabilities are also included, without further breakdown by race or gender. No targets have been set for semi-skilled and unskilled positions. However, employers must consider national or provincial Economically Active Population (EAP) figures when developing equity plans for these levels. The targets aim to increase representation of “designated groups” – black South Africans (including Africans, Coloureds, and Indians), women, and persons with disabilities – defined in the EEA. Legal experts from Werksmans note that the new approach moves away from the previous method of setting targets per racial group using EAP data. “This is a departure from the manner in which designated employers previously had to set targets using the Economic Active Population, whereby designated employers had to set targets based on each specific racial group,” write Anastasia Vatalidis, Kerry Fredericks, and Gracie Sargood. Importantly, the targets are not meant to total 100%, acknowledging that white men and foreign nationals will continue to be employed. Bowmans ’ Talita Laubscher and Melissa Cogger note that designated employers must set annual numerical targets aligned with the five-year sectoral goals, the EAP, and the representation of persons with disabilities. “The General Administrative EE Regulations state that the manner in which designated employers must take the sector targets into account and apply the affirmative action measures is set out in the EEA, the General Administrative EE Regulations, and the codes of good practice issued under the EEA.” Laubscher and Cogger add that over-representation must be addressed: “The 2025 General Administrative EE Regulations discourage designated employers from perpetuating the over-representation of any group if their representation exceeds the applicable EAP in a particular occupational level.” In cases where a designated group’s target is already met or exceeded, employers must still set targets to maintain EAP compliance. Notably, the final regulations remove the draft 2024 ban on “regression” in representation. Employers operating across multiple provinces can now apply different provincial EAPs to reflect regional workforce demographics – a flexibility absent from the previous draft regulations. Certificates of compliance From 1 September 2025, designated employers will begin the first reporting cycle under the amended EEA, which ends on 15 January 2026. For the first time, certificates of compliance will be issued by the DoEL – a requirement for doing business with the state. These certificates, valid for 12 months, confirm that an employer has met its employment equity obligations, including adherence to the sectoral numerical targets or providing valid reasons for not doing so. Additional requirements include submitting an annual report, having no findings of unfair discrimination or minimum wage breaches in the past year, and complying with the National Minimum Wage Act. Section 53 of the Act, now operationalised by the 2025 Regulations, outlines the application process for a compliance certificate, which must be submitted online . Both designated employers and non-designated employers may apply. Non-designated employers must declare compliance with relevant legislation using the EEA15 form. If an employer falls short of any requirement, it must provide justifiable reasons in its application. Once approved, certificates will be issued as EEA16A (for designated employers) or EEA16B (for non-designated employers). Certificates may be withdrawn by the minister, a labour inspector, or a delegated DoEL official if issued based on misrepresentation or if the qualifying conditions no longer exist. However, withdrawal can only occur after the employer is given 14 days to respond to a formal notice. Justifiable reasons protect employers from penalties for missing EE targets If an employer falls short of either the annual numerical targets or the five-year sectoral numerical targets, it must provide justifiable reasons in its application. Werksmans notes that a designated employer will incur no penalty or disadvantage if there are reasonable grounds to justify its failure to comply with any target. The justifiable reasons for non-compliance are repeated in the General Administrative EE Regulations, which remain unchanged from the Draft 2024 Sector Targets. There are seven justifiable reasons for a designated employer’s failure to comply with its targets as set out in its Employment Equity Plan. These are: insufficient recruitment opportunities; insufficient promotion opportunities; insufficient target individuals from designated groups with relevant formal qualification, prior learning, relevant experience or capacity to acquire, within a reasonable time, the ability to do the job, as contemplated by sections 20(3) to (5) of the Act; the impact of a CCMA award or court order; a transfer of a business; mergers or acquisitions; and the impact of economic conditions on the business. Steep fines under new rules Designated employers that fail to meet sectoral numerical targets under the amended EEA could face financial penalties if they cannot provide valid reasons for their non-compliance, according to Werksmans. CDH adds that although the EEA allows labour inspectors to issue compliance orders for certain failures – such as not consulting with employees or not submitting employment equity plans – sections 15 and 15A, which deal specifically with sectoral targets, are excluded from this enforcement mechanism. This means non-compliance with these targets cannot be addressed through a compliance order. However, an amendment to section 42 of the EEA now requires the Director-General to assess whether an employer has met the sectoral targets. If not, and the employer cannot justify its non-compliance, section 45 empowers the Director-General to seek an order from the Labour Court compelling compliance – or to impose fines as outlined in Schedule 1 of the Act. These penalties follow a sliding scale based on the employer’s previous contraventions and effectively treat failure to meet sectoral targets as seriously as failing to implement an employment equity plan. Werksmans has cautioned that failure to comply could result in substantial monetary penalties and other enforcement actions. Bowmans has echoed this sentiment, noting that the enforcement of sectoral targets will significantly affect designated employers, particularly those seeking to do business with the state. Understanding these targets – and how they apply to individual businesses – will be critical for employers hoping to avoid sanctions and maintain eligibility for government contracts. ‘Disclaimer - The views and opinions expressed in this article are those of the author(s) and not necessarily those of the BEE CHAMBER’. https://www.moonstone.co.za/new-employment-equity-regulations-raise-the-stakes-for-employers/

Pieter Steyn | 23 April 2025 On 19 March 2025, the Department of Trade, Industry and Competition (“DTIC”) issued a draft Transformation Fund Concept Document for public comment. The proposed Fund was first announced by the Minister of Trade, Industry and Competition (“Minister”) in January 2025 and involves raising R100 billion over 5 years for the purposes of supporting firms that are majority owned and controlled by black people as defined in the Broad-Based Black Economic Empowerment Act (“BBBEE Act”). The concept document provides that the proposed Fund will be administered through a Special Purpose Vehicle (“SPV”). The SPV will be a tax-exempt entity and a registered Financial Services Provider in terms of the Financial Advisory and Intermediary Services Act. It will have an eight member board of directors appointed by the Minister which will include two representatives from the private sector. The Fund will be financed by the Government, public entities, donor agencies (including international organisations and development banks) and the private sector. Regarding funding from the private sector, two main sources are identified in the concept document – 1) the Equity Equivalent Investment Programme (“EEIP”) which allows the local subsidiaries of certain multinationals to score BBBEE ownership points without having an actual black shareholding. Funds are instead contributed to BBBEE initiatives approved by the DTIC. It is not clear if the DTIC will request changes to existing EEIPs to require them to contribute to the proposed Fund or whether contributions to the Fund will only be required for new EEIPs; 2) allowing firms to score Enterprise and Supplier Development (“ESD”) points for the purposes of their BBBEE rating by making a contribution to the proposed Fund. In this regard, the DTIC will amend the current Codes of Good Practice (“Codes”) issued under the BBBEE Act with regard to the measurement of a firm’s score for ESD. The concept document does not give much detail regarding the proposed amendments to the ESD provisions of the Codes. In terms of the BBBEE Act, any amendments to the Codes must be published by the Minister in the Government Gazette for public comment for at least 60 days. The current framework for measuring a firm’s ESD score in terms of the Codes involves assessing a firm’s supplier development (“SD”) and enterprise development (“ED”) contributions to firms which are at least 51% black owned and have a total annual revenue of R50 million or less (contributions to firms exceeding such threshold may be recognised for five years if they first received assistance while their annual revenue was under the threshold). A firm’s SD and ED score is measured having regard to targets based on its net profit after tax (2% for SD and 1% for ED). The key difference between SD and ED is that a SD beneficiary is an existing supplier whereas an ED beneficiary is not an existing supplier. The Codes provide that if a firm fails to score at least 40% of all the available points for SD and ED, its BBBEE rating will automatically be downgraded by one level if its total annual revenue exceeds R50 million. ESD accordingly constitutes a key part of determining a firm’s BBBEE rating. The current framework involves establishing a direct business relationship between the firm seeking ESD points and ESD beneficiaries identified by it. This has several commercial benefits for the beneficiary especially as the Codes contemplate both monetary and non-monetary SD and ED contributions like investments, loans, grants, guarantees, credit facilities, training , mentoring, discounts and other preferential terms with a view to integrating the beneficiary directly into the firm’s supply chain. The contributions are made directly to the beneficiary and generally requires significant time and resources from the firm which develops and implements the ESD program. Significantly, the beneficiary must receive the contributions during the firm’s financial year in order to contribute to the firm’s ESD score for that financial year. This incentivises the quick delivery of contributions to beneficiaries. The concept document however indicates that a firm could earn ESD points “immediately” by merely contributing to the proposed Fund. This could save the firm significant time and costs if it did not have to implement its own ESD program. The concept document is not clear on this point but states that a “participation agreement” will have to be concluded with the SPV. The terms and conditions of such agreement will have to be carefully considered especially if it seeks to impose obligations in addition to the contribution to the Fund. The concept document states that contributions to the Fund will generally be exempt in terms of section 56(1)(h) of the Income Tax Act and would qualify for a deduction in terms of section 18(A) of the Income Tax Act. There may accordingly be a tax incentive in contributing to the Fund. Compliance with the current SD and ED targets in the Codes are not obligatory and ESD points are scored on a pro rata basis having regard to whether or not a firm meets the target. This means that a firm has the flexibility to decide how much to spend on SD and ED ( bearing in mind the risk of the automatic downgrade referred to above). It is not clear from the concept document whether a firm’s contribution to the Fund may be less than the target. The concept document states that a firm may decide whether or not to contribute to the Fund ie contributions will be voluntary. Presumably a firm will be able to choose not to contribute and rather continue with its own ESD program although the concept document is not clear in this regard. Much will depend on the detail of the proposed amendments to the Codes. The current framework envisages direct business relationships between private sector firms and ESD beneficiaries. The concept document envisages interposing the SPV as a third party between the private sector and ESD beneficiaries. The SPV will collect and distribute funds and implement its own ESD initiatives. This adds complexity to the delivery of ESD contributions to beneficiaries and may adversely affect the benefits for beneficiaries of such direct business relationships. There are several existing entities and programs tasked with promoting BBBEE and supporting majority black owned and controlled business and small, medium and micro enterprises (SMMEs) including the National Empowerment Fund, the Industrial Development Corporation, the DTIC’s Black Industrialist Scheme, the Small Enterprise Development and Finance Agency (SEDFA) and the Department of Small Business Development. A key question is whether the funds earmarked for the proposed Fund should not rather be provided to existing entities and programs rather than establishing a new entity. The proposed Fund should operate in conjunction with and supplement (rather than duplicate and overlap with) existing entities and programs. The effect of the Fund on existing ESD programs being implemented by the private sector should also be carefully considered. Ultimately the Fund’s success will depend on its delivery, efficiency , credibility and good governance. ‘Disclaimer - The views and opinions expressed in this article are those of the author(s) and not necessarily those of the BEE CHAMBER’. https://www.polity.org.za/article/proposed-r100-billion-transformation-fund-will-have-significant-implications-for-broad-based-black-economic-empowerment-bbbee-regulation-in-south-africa-2025-04-23

Creamer Media | 22 April 2025 In a powerful move to advance inclusion, mobility, and employability for persons with disabilities, Engen, in partnership with the Disability Economic Empowerment Trust (DEET), has successfully equipped 200 beneficiaries across five provinces with essential life and career skills through its Job Readiness Programme. Launched in September 2024, the initiative spanned KwaZulu-Natal, Eastern Cape, North West, Limpopo, and Mpumalanga, offering 100 participants hands-on driver training and enrolling all 200 in a comprehensive job readiness programme. This included CV writing, digital skills, workplace etiquette, and interview preparation. To date, 40% of driver training participants have obtained their drivers licences through the programmes Driver Training Programme with testing ongoing.  Notably, Limpopo achieved a remarkable 95% pass rate. The programme’s success is rooted in its commitment to accessibility. Modified vehicles, assistive devices, and sign language interpreters ensured that no participant was left behind, regardless of physical or sensory challenges. “This programme has opened doors that were previously shut,” says Thabiso Phetuka, CEO of DEET. “It’s about restoring dignity, agency, and access to economic opportunity.” Engen also supplied over 30 assistive devices, further enhancing participants' mobility and independence. “This initiative reflects our commitment to creating meaningful, long-term impact,” says Olwethu Mdabula, Engen CSI Manager. “By addressing key barriers like mobility, we’re building pathways to employment and entrepreneurship.” Aligned with the UN Convention on the Rights of Persons with Disabilities and South Africa’s 2015 White Paper on Disability, the programme reinforces Engen’s role as a champion of disability inclusion and social transformation. "Our partnership with Engen provides real hope to people with disabilities who have struggled to access the job market due to a lack of skills or mobility," added Phetuka. Affirming Engen’s dedication to disability inclusion, Mdabula added: "It’s not just about non-discrimination but about creating tangible opportunities that enable people with disabilities to become active members of society.” ‘Disclaimer - The views and opinions expressed in this article are those of the author(s) and not necessarily those of the BEE CHAMBER’. https://www.engineeringnews.co.za/article/engen-and-deet-empower-persons-with-disabilities-through-life-changing-skills-programme-2025-04-22

Frik Boonzaaier | 23 April 2025 The BEE Chamber welcomes the Department of Employment and Labour’s release of the 2025 Employment Equity (EE) Regulations and sector-specific numerical targets on 14 April 2025, and says it's a step which is intended to more effectively address historical disparities experienced by designated groups (Black people, women and people with disabilities), by accelerating the pace of South African workforce transformation. The 2025 EE Regulations introduce five-year numerical targets across 18 economic sectors including engineering; financial and insurance activities; mining and quarrying; information and communication, manufacturing and construction to ensure fair representation of designated groups. “These targets should be viewed as milestones to guide employers toward equitable representation,” explained Frik Boonzaaier, Human Capital Transformation Specialist, at The BEE Chamber.  He noted that some flexibility remains for designated employers, those with 50 or more employees, to set their own annual EE targets, provided they align with the five-year sectoral targets and Economically Active Population (EAP) statistics. “Finding this balance will ensure employers can tailor their strategies to their unique workforce dynamics while contributing to national transformation objectives. The BEE Chamber sees this as an opportunity for businesses to lead by example, integrating diversity into their growth strategies.” “Since 1 January 2025, all small businesses with fewer than 50 employees, irrespective of their annual turnover, are exempt from Chapter III of the EE Act, and do not need to implement the duties of a designated employer (consultation, EE Plan, EE Reports, etc), a move designed to alleviate administrative burdens and to encourage job creation. However, these businesses must still comply with the anti-discrimination provisions under Chapter II. The BEE Chamber supports this exemption, noting it allows emerging enterprises to focus on growth while larger firms drive transformation at scale.” “Compliance is further incentivised through the recent promulgation of Section 53 of the EE Amendment Act, which mandates a Certificate of Compliance, strongly linked to the Sectoral Targets, for designated employers that want to participate in state tenders. This measure ensures that only businesses committed to transformation can access public contracts, a critical step for sectors like construction that rely heavily on government projects.” “The 2025 EE Regulations mark a significant stride toward a more representative economy. We urge businesses to view these targets as an opportunity to drive meaningful change. Many questions still exist regarding specifics of the implementation of the new Regulations. The BEE Chamber therefore encourages its clients to leverage its consultancy services to navigate these requirements seamlessly. The 2025 EE reporting season opens on 1 September 2025,” Boonzaaier concluded.   https://www.crown.co.za/modern-mining/industry-news/32389-bee-chamber-welcomes-2025-employment-equity-regulations

In the realm of economic empowerment, Broad-Based Black Economic Empowerment (B-BBEE)  stands as a cornerstone initiative aimed at redressing imbalances of the past and fostering inclusive growth. However, even with its noble intentions, there lies a persistent challenge: Fronting Practices.   Fronting Practices refer to the practice of misrepresenting the true nature of B-BBEE compliance, often undermining its objectives and perpetuating economic inequality. At its core, B-BBEE seeks to empower Black People and promote their meaningful participation in the economy. It encompasses various measures such as Ownership, Management Control, Skills Development, Enterprise and Supplier Development, and Socio-Economic Development; all aimed at broadening economic participation and socio-economic empowerment. However, Fronting Practices undermine these objectives by creating a facade of compliance while circumventing the spirit of B-BBEE and transformation initiatives.   Fronting Practices manifests in various forms, ranging from the creation of superficial empowerment structures to the exploitation of loopholes in B-BBEE legislation. One common tactic involves the establishment of so-called "front companies" or "token Black Ownership" structures, where Black individuals or entities are used as figureheads without genuine involvement or control in the business operations. In other instances, companies may engage in window-dressing tactics, such as inflating Procurement Spend with Black-owned suppliers without genuine economic empowerment outcomes.   The prevalence of Fronting Practices poses significant challenges to B-BBEE compliance  and undermines the credibility of the entire empowerment framework. It not only erodes trust between stakeholders but also perpetuates a culture of non-compliance and impunity. Moreover, Fronting Practices distort market dynamics by allowing entities to unfairly compete for business opportunities meant for genuinely empowered enterprises, thereby stifling economic transformation and exacerbating inequality.   Addressing Fronting Practices requires a multifaceted approach that combines robust enforcement mechanisms, increased transparency, and enhanced public awareness. Regulatory authorities such as the B-BBEE Commission and the Department of Trade, Industry and Competition ( the dtic ) must strengthen enforcement measures to detect and penalise instances of Fronting Practices effectively. This may involve conducting thorough investigations, imposing severe penalties on offenders, and implementing measures to deter future violations. Moreover, collaboration between government agencies, industry associations, and civil society organisations is essential to share best practices, raise awareness, and promote compliance with B-BBEE principles.   Transparency and accountability are critical in combating Fronting Practices and restoring trust in the B-BBEE framework. Companies must adopt a culture of transparency and disclosure, providing clear and accurate information about their empowerment initiatives and outcomes. This includes publishing detailed B-BBEE Scorecards, where possible, disclosing Ownership structures, and demonstrating genuine efforts towards economic empowerment. By driving transparency, companies can mitigate the risk of Fronting Practice allegations and demonstrate their commitment to genuine transformation.   Furthermore, public awareness and education play a vital role in addressing Fronting Practices and promoting compliance with B-BBEE principles. Stakeholders across the public and private sectors must engage in proactive outreach efforts to educate businesses, investors, and the general public about the importance of economic empowerment and the consequences of Fronting Practices. This may involve hosting workshops, disseminating informational materials, and leveraging digital platforms to raise awareness about B-BBEE compliance requirements and best practices.     Ultimately, Fronting Practices represents a significant challenge to B-BBEE compliance and undermines efforts to achieve meaningful economic transformation in South Africa. Addressing Fronting Practices requires a concerted effort from regulatory authorities, businesses, and civil society to strengthen enforcement measures, promote transparency, and public awareness. When we tackle Fronting Practices head-on and uphold the principles of genuine economic empowerment, we can pave the way for a more inclusive and equitable society, where every citizen can thrive.

On Sunday, 27 April 2024, we commemorate Freedom Day.   Freedom Day is the commemoration of the first democratic elections held in South Africa on 27 April 1994.  These were the first post-apartheid national elections to be held in South Africa where anyone could vote regardless of race.   It symbolises our Country’s journey towards equality, justice, and freedom for all its citizens. Broad-Based Black Economic Empowerment (B-BBEE)  is intricately linked to this historic day, representing efforts to address the economic disparities inherited from apartheid. B-BBEE initiatives aim to empower Black People, by promoting their participation in the economy.   Together, Freedom Day and B-BBEE signify South Africa's ongoing commitment to creating a more inclusive and equitable society.

IT- Online | 22 April 2025 The news around President Cyril Ramaphosa signing the National Small Enterprise Amendment Bill into law has been widely welcomed, writes Viresh Harduth, vice-president: small segment at Sage Africa & Middle East. This development promises to streamline access to financial and non-financial assistance for small and medium businesses (SMBs) as well as offer smaller businesses better protection from unfair commercial practices. The newly signed Act aims to reduce red tape and bureaucratic challenges for SMBs, levelling the playing field with larger organisations, including big businesses and public sector entities. This comes at a crucial time, with a break from load-shedding and expected interest rate cuts boosting business confidence. The Act is poised to foster a more inclusive economy, creating more opportunities for SMMEs and cooperatives, which in turn should enhance job creation and economic diversity. Despite contributing 40% to South Africa’s GDP and providing 87% of employment opportunities, SMBs have historically been underrepresented in government policymaking. It’s encouraging to see a renewed focus on supporting and growing this sector through interventions such as the new Act.   Providing critical support for SMBs By providing a more supportive and predictable business environment, the Act aims to encourage innovation and growth within the SMB sector. This could lead to increased competitiveness, job creation, and overall economic development. However, the speed and quality of the implementation of the Act’s provisions will determine how effective it is in meeting its objectives. One of the key components of the Act is the merger of the Cooperative Banks Development Agency (CBDA), the Small Enterprise Development Agency (SEDA), and the Small Enterprise Finance Agency (SEFA) to create the Small Enterprise Development Finance Agency (SEDFA). This consolidation will provide SMBs with a single point of entry to seek financing and other assistance. Such a move is particularly important given that 42% of SMBs cite financial pressures and cash flow issues as significant challenges, according to Sage’s recent SBBO report. Combining these agencies will be a complex task that could take months or even years and is essential to ensure that the services the existing agencies provide are not disrupted during the transition. The report additionally states that 51% of SMBs globally stated rising operational costs, highlighting the importance of reducing red tape and improving access to affordable financing. In South Africa, where economic disparities are pronounced, the ability of SEDFA to deliver streamlined support will be vital to ensuring that SMBs can overcome these barriers and thrive.   Addressing unfair practices SMBs are likely to support the establishment of a Small Business Ombudsman under the Act, as it aims to ensure fair treatment by larger businesses and government entities. The Ombud would address common challenges such as late payments and unfair contract terms—issues that smaller businesses often lack the resources to contest in court. By providing a dedicated channel for dispute resolution, the Ombud could help level the playing field. The Act also empowers the Small Business Minister to declare certain practices as unfair, but careful implementation will be essential to protect SMBs without stifling healthy market competition.   Bridging the digital divide Digital transformation is no longer optional for SMBs. Globally, 70% of SMBs expect revenue growth, and 67% plan workforce expansions in the next six months, driven largely by investments in digital tools and AI. If South African SMBs are to follow this trajectory, they need both the resources and the skills to embrace digitalisation. As SMBs increasingly adopt digital tools to drive efficiency and growth, the Act must also address the skills gaps that prevent many businesses from fully leveraging technology. While 85% of SMBs globally view technology as central to achieving their business goals, South Africa lags behind, with only 78% of local SMBs recognising digital technology as important. This digital lag is compounded by a lack of skilled talent. Globally, 33% of SMBs call for enhanced training opportunities to address digital skills shortages. South African SMBs would benefit greatly from targeted skills development programmes to help them unlock the full potential of digital transformation. By investing in training initiatives, the government can ensure that SMBs are equipped to compete in an increasingly digital economy.   Levelling the playing field It is also essential for the government to accelerate the structural reforms of Operation Vulindlela in lockstep with the implementation of the Act to unlock the full potential of the SMB sector. As important as the new Act is, challenges such as logistics bottlenecks and poor local government performance continue to constrain the growth of SMBs. South African SMBs have shown remarkable resilience, with 78% expressing confidence in their future success despite the challenges they face. However, this optimism must be matched with tangible support to ensure their sustainability. Creating a more enabling environment for SMBs in South Africa will help ensure their sustainability, which in turn can contribute significantly to the country’s economic growth. By addressing financial constraints, bridging digital skills gaps, and ensuring fair treatment through the Ombud Service, the new Act has the potential to transform the SMB landscape in South Africa. The National Small Enterprise Amendment Bill represents a major step forward in empowering South African SMBs. With effective implementation, it could address many of the challenges facing this vital sector. By fostering a more inclusive and supportive business environment, the Act can help unlock the full potential of SMBs, driving economic growth, job creation, and innovation across the country. ‘Disclaimer - The views and opinions expressed in this article are those of the author(s) and not necessarily those of the BEE CHAMBER’. https://it-online.co.za/2025/04/22/unlocking-smb-potential-with-the-new-enterprise-act/#:~:text=The%20newly%20signed%20Act%20aims,rate%20cuts%20boosting%20business%20confidence .

Melissa Cogger and Talita Laubscher | 23 April 2025 On 15 April 2025, the Minister of Employment and Labour published the ‘Determination of Sectoral Numerical Targets’ ( Final Sector Target Regulations ) and the  ‘ Employment Equity Regulations, 2025’ ( General Administrative EE Regulations ),   which repeal the Employment Equity Regulations, 2014 (collectively,  the 2025 EEA Regulations ). The 2025 EEA Regulations are published, following the Employment Equity Amendment Act, 2022 ( Amendment Act ) coming into effect on 1 January 2025, and the purported consultations that took place between the Department of Employment and Labour ( DoEL ) and representatives of various sectors. In the Final Sector Target Regulations, the Minister has identified 18 national economic sectors and set numerical targets for each sector. The ultimate purpose of these sector targets is to ensure the equitable representation of suitably qualified people from designated groups. In terms of section 20(2A) of the Employment Equity Act, 1998 ( EEA ) the numerical goals set by an employer must comply with any sector target that applies to that employer and is, in terms of section 42(1)(aA), one of the measures that is considered in the assessment of compliance. Further, the Minister may only issue a certificate of compliance in terms of section 53 of the EEA if the Minister is satisfied that, among other things, the employer has complied with a sector target that applies to that employer, and if it did not, there were justifiable reasons for non-compliance. The enforcement of these sector targets will have significant impact on designated employers and their ability to do business with the State. Further, fines and penalties may apply for non-compliance with sector targets unless a justifiable reason exists for such non-compliance. History behind the targets The timeline and process leading to the finalisation of the sectoral targets involved several stages, as set out below: 18 sectors were identified by the DoEL on 21 September 2018 through the publication of draft regulations ( Draft 2018 EEA Regulations ). These 18 sectors have remained unchanged, and are based on the broad categorisation in the Standard Industrial Classification Codes. Following the tabling of the Employment Equity Amendment Bill in Parliament, various meetings were held with stakeholders during the period from 2019 to 2022 regarding the proposed sector targets, which were initially based on the sector charters published under the Broad-Based Black Economic Empowerment Act, 2003 ( BBBEE Act ). The President only signed the Employment Equity Amendment Bill into law on 6 April 2023. The promulgation and coming into effect of the Amendment Act would be on a later date, which we now know to be 1 January 2025. Draft targets were published for public comment on 12 May 2023 ( 2023 Draft Sector Targets ) as well as on 1 February 2024 ( 2024 Draft Sector Targets ). Such publication took place even though the Amendment Act had not yet come into effect. The Amendment Act came into effect on 1 January 2025, and section 15A of the EEA empowers the Minister (following a multi-stage process of consultation) to set sector targets. During February 2025, the DoEL conducted virtual meetings with stakeholders in the 18 sectors and invited written representations within an expedited timeframe on new proposed draft targets ( 2025 Draft Targets ). These 2025 Draft Targets were not published for public comment. Following the virtual meetings, and during February and March 2025 various stakeholders requested and held bilateral engagements with the DoEL as a means to discuss the rationale underlying the 2025 Draft Targets, as well as the rationale pertaining to the identification of the sectors. The sectors had remained unchanged since the sectors were first identified in the Draft 2018 EEA regulations, despite representations by various organisations that these were over-broad and did not take into account the unique circumstances of sub-sectors. Finally, the sector targets were published in final form on 15 April 2025 ( Final Sector Targets ), with no further period for public comment provided, and without prior publication of these Final Sector Targets in draft form. As with the 2024 Draft Sector Targets, the Final Sector Targets are set for males and females from 'designated groups' generally and are not broken down further per population group. Further, and as previously recorded in the 2024 Draft Sector Targets, the five-year sector targets are not intended to add up to 100%; as the sector numerical target excludes white males with no disabilities and foreign nationals as part of the workforce profile. When determining annual employment equity targets towards achieving the five-year sector numerical targets, a designated employer must set numerical targets for all designated groups in each of the four upper occupational levels in relation to the applicable sector targets and Economically Active Population ( EAP ), and for persons with disabilities. The General Administrative EE Regulations state that the manner in which designated employers must take the sector targets into account and apply the affirmative action measures is set out in the EEA, the General Administrative EE Regulations and the codes of good practice issued under the EEA. Comparison of the 2024 Draft Sector Targets and the Final Sector Targets In comparing the 2024 Draft Sector Targets and the Final Sector Targets, the following is notable: Overall, the Final Sector Targets are significantly higher than the 2024 Draft Sector targets, with significant increases particularly for females in the designated groups. For instance, the target for females in senior management in the Finance and Insurance sector has increased by 21.3% when compared to the 2024 Draft Sector Targets. Targets set for females in senior management have similarly significantly increased in the Professional, Scientific and Technical Activities sector by 23.1%. Conversely, there have been some decreases in the targets for males in the designated groups. The target for people with disabilities has been increased from 2% to 3% across all sectors. Some of the principles agreed to between the South African Government and Solidarity trade union during 2023, which were previously included in the Draft 2024 Targets are absent in the 2025 EEA Regulations. For example, the 2025 EEA Regulations do not explicitly contain the principle " No employment termination of any kind may be effected as a consequence of affirmative action ." The principle that “ affirmative action shall be applied in a nuanced way ” is also missing from the 2025 EEA Regulations, however the regulations do outline guidelines for implementing affirmative action. Unlike the 2024 Draft Sector Targets, the DoEL has not explained in the Final Sector Targets what factors it took into account when setting the five-year sector targets. For example, it does not refer to the latest workforce profile statistics, the EAP, the various sector codes published under the BBBEE Act, or the unique sector dynamics. Similar to the 2025 Draft Sector Targets, guidance is provided on the over-representation of any particular group. The 2025 General Administrative EE Regulations discourage designated employers from perpetuating the over-representation of any group if their representation exceeds the applicable EAP in a particular occupational level. Further information is provided in circumstances where a designated employer exceeds the sector target. For example, if a designated employer has exceeded the numerical target set for a particular designated group at an occupational level, it should continue to set targets that maintain compliance with the EAP. There is no longer a prohibition on “regression” in a particular race/gender group, which was contained in the Draft 2024 Sector Targets. It is possible for designated employers that operate in more than one province to adopt multiple provincial EAPs, taking into account the nature of their operations and geographical area. This was not previously permitted in the Draft 2024 regulations.   Rationale for revised targets For various sectors, the Final Sector Targets are the same as those targets shared by the DoEL during the virtual meetings held in February 2025 and are unchanged despite representations and bilateral engagements. Importantly, those draft targets shared in February 2025 were not published in the  Government Gazette  for public comment. The DoEL explained in the meetings that the 2025 Draft Targets were based on the feedback received in the prior public participation process, the latest workforce profile statistics and sector dynamics. The DoEL indicated that the rationale for the change in draft targets was due to various sectors comparing well and exceeding the 2024 Draft Sector Targets in the last reporting period, which appears to explain the markedly increased and different Final Sector Targets. During engagements and in some of the bilateral engagements, the DoEL further explained its rationale and ‘formulae’. The DoEL considered the workforce profiles of the various sectors for 2023 and 2024. It then set the target for the top four occupational levels at 6%, 7%, 8% and 9% respectively. This appears to be based on the DoEL’s view that these are appropriate targets. The Final Sector Targets therefore do not appear to have been formulated on any scientific or empirical basis. The challenge arises when the workforce profiles of subsectors are considered. In some instances, the targets are then much higher than the 6%-9% principle applied by the DoEL, which makes compliance with the sector targets a challenge for these subsectors. Some comfort for designated employers Whilst section 20(2A) contemplates peremptory compliance with the Final Sector Targets when setting numerical goals, comfort should be taken in the well-established principles in employment equity law that have been interpreted and developed by our courts. In this regard, section 15(3) explicitly states that affirmative action measures include preferential treatment and numerical goals, but exclude quotas, and that there should not be absolute barriers to the appointment or promotion of over-represented groups. Regard should also be had to the justifiable reasons for non-compliance which are repeated in the General Administrative EE Regulations, which remain unchanged from the Draft 2024 Sector Targets. ‘Disclaimer - The views and opinions expressed in this article are those of the author(s) and not necessarily those of the BEE CHAMBER’. https://iol.co.za/business-report/2025-04-22-unpacking-the-final-employment-equity-sector-targets-in-south-africa/

Piet Le Roux & Gerhard Papenfus | 21 April 2025 Companies face another attempt by the state to exert centralised control over economic activity in SA Last week the SA government published its new racial hiring quotas, which instruct businesses to reduce white males to as little as 4% of its workforce.  The regulations herald perhaps the most sweeping racialisation of the SA labour market, seeking to impose racial hiring quotas on local and international companies alike and threatening to destroy hundreds of billions of rand in economic value if diligently enforced.  According to the Employment Equity Act, the purpose is to “ensure equitable representation” of “designated groups” in employment across the country. But what this really means — according to the likes of the Employment Equity Commission, President Cyril Ramaphosa and the ANC — is the forced change of the workforce of every company of consequence to one that mirrors the racial composition of the country.  Such totalitarian intervention in company hiring decisions would be an absolute disaster for job numbers and employment by itself. But failing to comply with the mostly impossible regulations is similarly ruinous.  Missing the “numerical targets” comes with a debilitating 10% of turnover fine, among other penalties. There is the theoretical possibility that the department of labour may issue sanctioned companies a temporary pardon, on a case-by-case basis, but this only underscores the capricious nature of the regulations, making business and investment planning a nightmare.  The act craftily avoids calling these “racial quotas”, preferring the more euphemistic, and seemingly more flexible, “numerical targets”. The distinction between quotas and targets is only semantic. The fact is, missing them carries punitive sanction.    The labour department wants compliance to commence in September this year. As much as five years may be allowed for complete implementation, provided the regulator is satisfied with your “progress”.  The quotas currently apply to companies with 50 or more employees, but that threshold can be lowered at a legislative whim. The government’s track record of shifting the goalposts in racial economic policy makes this more a matter of when, not if.   The official regulations divvy the economy up into 18 ill-defined “sectors”, and then employment into four categories called “top management”, “senior management”, “professionally qualified and middle management” and “skilled technical”. Each category is then assigned three percentages — one for “designated groups” males (that is, males as long as they are not white), one for “designated groups” females (including white females) and one for “disability only”. Able-bodied white males do not appear in the regulations — they are the remainder after the designated groups are subtracted from 100.  So we have 18 sectors, four employment categories, various racial group quotas, gender quotas and disability quotas for a matrix of at least 576 variables to be optimised by labour department central planners.  In the case of “financial and insurance” businesses, “top management” is allowed to be 37% white males, which declines rapidly through other categories until it bottoms out in the “skilled technical” category allowing for white males to make up no more than 4%. In healthcare companies, white males should max out at respectively 29% and 4%; in administrative and support services (such as security companies), 30% and 4%; mining companies, 29% and 4%; education institutions 26% and 4%, and so on.  Agricultural operations get limited (for now) to between 66% and 6%, which is a not-very-subtle way of telling a white farmer that there’s no place for his sons on the team. The sector that really reveals the goalpost-shifting endgame for all sectors though, is “public administration and defence”. Here, white males must be reduced to a maximum of 8% of top management employees, and 4% of the rest.  Targeted domestic sanctions and expropriation   In short, the new employment equity regulations aim to push white people in general, and white males in particular, out of jobs. In practice, this is a targeted economic sanction against a section of the domestic population.  Moreover, in the language of another controversial statute in this country today, these forced hiring directives are a form of expropriation, in which the state attempts a race-based transfer of a company’s effective control without compensating the existing owners. Such targeted domestic economic sanctions are unacceptable and harmful enough, but where strict enforcement compels companies to hire people without the requisite skills or suitability, less value will be produced at more cost. Business efficiency will be greatly harmed. Declining productivity will ripple out with a colour-blind negative multiplier effect, affecting business viability, investment undertakings and hiring across the economy.  International repercussions   To the extent that international companies have participated in employment equity since the original act was passed in 1996, they may have developed some tolerance for the SA government’s unusual insistence on race. Many would have outsourced to human resources (HR) consultants the periodic “employment equity plans” they were required to submit, having been assured that the company may determine its own flexible targets and that missing the targets wasn’t a major problem.  However, it will soon become clear to these companies that the amended act and regulations now prescribe specific and onerous race, sex and disability quotas — to be met under penalty of fine, and eventually personal prosecution and prohibition of trading. Before long, the boards of international companies operating in SA will conclude that they are facing the most outrageous — and impossible — diversity, equity & inclusion programme in the world.   Some will guts it out because returns are that good, trusting that impossible programmes like these always have loopholes and eventually fail. They will keep their expansion plans limited though.  Others will leave, not having signed up for such absurd and fluid risk vectors, which also expose their owners and senior management to extensive ethical, moral and legal risk both inside and outside SA.  Either way,  many international companies will be getting in touch with their embassies. Every one of those conversations will be fuel on the fire of international controversy in which SA finds itself around racialised economic policies.  What happens next?    The new employment equity regulations seek to impose completely unreasonable operational obligations on thousands of businesses. Minimum possible compliance and maximum appropriate noncompliance will be widespread as businesses prioritise the reality of looking after their customers, employees, and owners over practically impossible bureaucratic fantasies. Countless businesses and their employees oppose this harmful and destabilising hyper-racialisation of their workplaces in principle and in practice. Meanwhile, opposition from foreign companies and their representative embassies can be expected to escalate, with the possibility of diplomatic consequences.  Moreover, groups like Sakeliga, the National Employers’ Association of SA (Neasa) and others are preparing comprehensive litigation strategies to oppose the employment equity regulations on constitutional and practical grounds.  Together, this forms a wave of strong and principled opposition that should act as an encouragement to companies as they confront another irresponsible attempt by the state to exert total centralised control over economic activity in SA.  • Le Roux is CEO of Sakeliga, and Papenfus CEO of Neasa.   ‘Disclaimer - The views and opinions expressed in this article are those of the author(s) and not necessarily those of the BEE CHAMBER’. https://www.businesslive.co.za/bd/opinion/2025-04-21-piet-le-roux-and-gerhard-papenfus-new-race-quotas-a-full-scale-attack-on-business-freedom/

Philippa Larkin | 15 April 2025 South African businesses now face a crucial compliance challenge after the Department of Employment and Labour on Tuesday gazetted two sets of Employment Equity (EE) Regulations effective January 1, 2025. The Department of Employment and Labour said in a statement, "The publication of these EE Regulations represents a pivotal step toward advancing transformation and inclusivity in the South African labour market. Employers are encouraged to familiarise themselves with the new regulatory framework to ensure compliance and alignment with employment equity objectives." The regulations mandate designated employers to meet sector-specific equity targets by 2030, with hefty fines for non-compliance. Non-compliance carries penalties of up to R1.5 million or 2% of annual turnover. Over 200 employers have already faced Labour Court for prior violations.  The published regulations include: General Administrative Regulations: These regulations provide standardised reporting forms (EEA2 and EEA4 forms); templates for EE Analysis (EEA12) and EE Plans (EEA13); enforcement tools; and templates for the EE Certificate of Compliance, including the intention to withdraw the EE Certificate of Compliance.These regulations offer implementation guidelines to assist employers and employees in interpreting and applying the provisions of the EE Amendment Act, of 2022, including streamlining compliance processes for designated and non-designated employers. Regulations on Sector Numerical EE Targets: These Regulations establish the actual five-year sector numerical EE targets for designated groups across 18 economic sectors for the four upper occupational levels (such as top management,senior management, professionally qualified/middle management, and skilled technical/junior management), including for persons with disabilities. The regulations are expected to have a significant impact on South African businesses. However, many industry stakeholders have raised concerns that the targets are unattainable, citing the current economic climate and South Africa’s low-growth economy as barriers to their achievement. Jonathan Goldberg, the chairman of Global Business Solutions, said, “The new regulations create both significant challenges and opportunities for South African businesses. While many will find these targets difficult to achieve, those who strategically align their practices with these requirements can emerge as leaders in transformation.” The regulations, following the Employment Equity Amendment Act, No. 4 of 2022, include General Administrative Regulations, providing standardised reporting tools and compliance templates, and Regulations on Sector Numerical EE Targets, setting five-year goals for designated groups across 18 economic sectors at top occupational levels. Designated employers with 50 or more employees must align their EE plans with these targets to ensure equitable representation. “The regulations present a complex challenge for many sectors, especially those that are already facing economic headwinds,” said Thembi Chagonda, Joint-CEO of Global Business Solutions and an Employment Equity Commissioner. “However, those businesses that embrace these changes head-on and innovate their approach to compliance will find themselves better positioned for the future.” Small employers with fewer than 50 employees are exempt from preparing EE plans and annual reports but are encouraged to remain in the Department’s database for compliance certification. Labour union Cosatu has prevously said the reforms will help address South Africa’s persistent inequalities and improve compliance with labour laws. Meanwhile, the Department of Employment and Labour, the Commission for Employment Equity and the Commission for Conciliation Mediation and Arbitration (CCMA) - as part of advocacy initiatives, intend to conduct national workshops/roadshows to engage with various stakeholders in the labour market about the implication(s) of the new legislation. The 2025 EE workshops will be held under the theme:  “Bridging the Equity Gap Through Diversity & Inclusion”  . These will be held during May and June 2025 across all nine provinces. More information on the EE workshops, including updates on the venues to be used, will be available on department's and the CCMA's social media platform as well as the Department’s website:  www.labour.gov.za The workshops will focus on:  How to implement the EE Amendments contained in the EE Amendment Act, 2022 and its EE Regulations?  Five-year Sector EE targets for 18 economic sectors;  Practical demonstration of how to utilise the EE system online facilities to capture EE reports and request EE Certificate of Compliance; and  Presentation on discrimination disputes referred to the CCMA and the various Courts, in particular, harassment cases, including dispute resolution mechanisms in terms of the EEA.   ‘Disclaimer - The views and opinions expressed in this article are those of the author(s) and not necessarily those of the BEE CHAMBER’. https://www.iol.co.za/business-report/companies/sas-new-employment-equity-regulations-a-compliance-challenge-for-businesses-by-2030-49b72884-a827-497e-a07d-56d2d348fcf0

Prof. Arthur G.O. Mutambara | 11 April 2025 The AI-driven 4IR presents an unprecedented and unique opportunity for the Global South to exert its influence, assume agency, actively participate, and leverage technology to achieve inclusive development and shared prosperity. The Global South refers to a socio-economic and geopolitical concept rather than a precise geographical location. It describes emerging economies and countries that are least industrialised. Consequently, the Global South is also known as the developing world or as a grouping of developing economies. The Global South broadly comprises Africa, Latin America, the Caribbean, Asia (excluding Israel, Japan, and South Korea), and Oceania (excluding Australia and New Zealand). The Global North includes North America, Europe, Israel, Japan, South Korea, Australia, and New Zealand. The world’s highly industrialised countries constitute the Global North, whereas the Global South comprises emerging and least industrialised economies. Comparing the populations of the Global South and Global North, it is evident that there are more people in the former than the latter. Hence, the term Global Majority is sometimes used instead of Global South. The phrase Global Majority has the utility of emphasising the primacy, centrality, and importance of the demands, aspirations, and ambitions of the Global South ahead of those of the Global North – the Global Minority. Development is often associated with progress in areas such as income, education, health, human rights, and industrialisation. The objective is to improve a population’s standard of living through factors such as wealth creation and distribution, social differentiation, industrial transformation, and economic growth. AI can play a critical role in achieving such ambitions and aspirations. However, given its history of rabid colonisation and exploitation by the Global North, extreme inequalities, and abject poverty, the Global South requires a special type of development – inclusive development. This emphasis seeks to ensure that the benefits of development are shared broadly across all segments of society, particularly the marginalised and vulnerable. Economist Amartya Sen proposed this approach to human development within the broader thesis articulated in his seminal book, “Development as Freedom.”Economic and social inequality can hinder development and lead to social unrest. Corruption, incompetence, and poor governance undermine development by diverting resources away from public goods and services, underutilising capacity, and leading to a lack of accountability. While globalisation and technology can drive economic growth, they can also exacerbate inequalities, lead to cultural homogenisation, and create a digital divide. Political instability and conflict can disrupt development efforts, leading to setbacks in economic and social progress. Indeed, there are potential obstacles to the developmental ambition and trajectory of the Global South. Shared prosperity and development are linked. Prosperity encompasses various dimensions of well-being, including economic wealth, social stability, health, and overall quality of life. Indeed, prosperity is often associated with material abundance, but it also includes non-material aspects such as happiness, satisfaction, and the ability to lead a fulfilling life. In most Global North countries, economic performance is not shared among the general population.This is hugely problematic. Africa and the rest of the Global South require inclusive development, leading to shared prosperity. GDP per capita is more important than GDP. The Gini coefficient is more important than the GDP growth rate. In a country, the size of the middle class as a percentage of the population is a critical metric that should be closely monitored and tracked. However, this is never done. Only traditional economic metrics such as GDP and GDP per capita are measured and analysed. It is instructive and prudent to note that key countries in the Global North, such as the United States, the United Kingdom, and France, have not achieved inclusive development or shared prosperity. The Gini coefficient, also known as the Gini index or Gini ratio, is a statistical measure of economic inequality within a population. It measures the income dispersion or wealth distribution among a country’s citizens. The Gini coefficient is one of the most frequently used measures of economic inequality. The coefficient takes values between zero and one. A coefficient of zero indicates perfect equality in the distribution of income or wealth within a population, while a coefficient of one represents perfect inequality or absolute disparity, where one person in a population receives all the wealth or assets. In contrast, the rest of the population gets nothing. South Africa has the world’s highest Gini coefficient for income, at 0.67. This explains the country's perennial challenges of staggering inequality, abject poverty, and unrelenting unemployment despite being Africa’s most industrialised country and biggest economy in terms of GDP. One of the most potent tools for shared economic growth is quality education, characterised by quantifiable skills, competencies and capabilities anchored by financial literacy and entrepreneurial skills. Financial literacy, computer literacy, entrepreneurship, digital skills, and AI literacy should be mandatory subjects for every university student, regardless of their degree programme. Even better, these subjects must be introduced in Secondary School, if not Primary School. This training must be grounded in learning how to learn and unlearn, critical thinking, and problem-solving skills. The Global South doesn’t just want development. It seeks inclusive development. The economic growth must be shared. People in developing and least industrialised countries don’t just desire prosperity. They demand shared prosperity – the creation of societies where everyone can improve their lives and benefit from economic growth. Indeed, opportunity economies must characterise the Global South. This involves reducing inequality, ensuring equitable access to resources and opportunities, and promoting sustainable development. The questions are: What is the potential role of AI in igniting and powering the pursuit of inclusive development and shared prosperity in the Global South? In which economic sectors, and in what ways? What are the use cases, AI tools, expected impact, and associated risks? Prof. Arthur G.O. Mutambara is the Director and Full Professor of the Institute for the Future of Knowledge at the University of Johannesburg. This is an excerpt from his book: Artificial Intelligence: A Driver of Inclusive Development and Shared Prosperity for The Global South. ‘Disclaimer - The views and opinions expressed in this article are those of the author(s) and not necessarily those of the BEE CHAMBER’. https://www.iol.co.za/pretoria-news/opinion/why-the-emphasis-on-inclusive-development-and-shared-prosperity-5315d48c-5928-4854-8bda-acf2a009ca93

Darren Parker | 11 April 2025 Since the Department of Public Works and Infrastructure (DPWI) hosted its Construction Summit on Crime-Free Construction Sites in November last year and key officials signed the Durban Declaration pledging to tackle crime in the sector, more than 745 extortion cases have been reported and 240 arrests made, Public Works and Infrastructure Minister Dean Macpherson has revealed. “We are . . . cracking down on the criminality that has plagued this sector. The so-called construction mafia has, for too long, operated with impunity – extorting contractors, disrupting worksites and chasing away investment. But . . . progress is being made,” he said at the Built Environment Indaba, in Midrand, on April 10. Macpherson said the DPWI was working closely with the South African Police Service (Saps), the National Treasury and the Construction Industry Development Board to ensure construction mafia criminals were brought to book. He criticised the existing government procurement policy that mandates 30% of certain public sector contracts, particularly in construction and infrastructure projects, be subcontracted to designated groups, such as black-owned small- to medium-sized enterprises, youth, women, people with disabilities and cooperatives, where feasible. This policy, which is aligned with the goals of broad-based black economic empowerment and implemented through government procurement regulations, arises from the Preferential Procurement Policy Framework Act regulations, most notably the 2017 amendments. Macpherson said the current structure of this 30% requirement had inadvertently created an entry point for criminal syndicates to exploit the system. The syndicates use threats or violence to force their way into projects under the guise of claiming this 30% subcontracting opportunity, thereby displacing legitimate black-owned businesses and causing chaos and extortion on construction sites. He commended the Black Business Council for the Built Environment (BBCBE) for recognising that unless the 30% set aside is restructured or better regulated, it will continue to serve as a loophole for these criminal elements, rather than uplifting genuine black-owned enterprises as intended. “It is after all, black-owned businesses that have suffered the most as a result of being forcibly and violently removed from sites by these mafia outfits. To this end, I am incredibly grateful to the BBCBE for their support in recognising that the way the 30% set aside is structured, is the gateway for this construction mayhem to continue. “We must get back to first principles to ensure genuine inclusion and participation is achieved, and not just paying off those with the biggest guns,” Macpherson said. He said that, just last week, construction company WBHO had informed him that it had seen an 80% decline in lost construction hours year-on-year owing to the actions taken by the DPWI and Saps to secure sites.  “Our work is paying off. We will be shortly releasing our proposal for a national facilitation framework to institutionalise a single model of social facilitation to ensure a uniformed approach to working with communities and local businesses in a bid to replicate successes we have seen in [some] provinces,” Macpherson added.  ‘Disclaimer - The views and opinions expressed in this article are those of the author(s) and not necessarily those of the BEE CHAMBER’. https://www.engineeringnews.co.za/article/more-than-240-construction-mafia-arrests-made-since-november-macpherson-says-2025-04-11