Conway Williams | 3 July 2025 It is, at its core, a risk management lens — one that helps identify material long-term risks and opportunities. For most of the past decade, ESG analysis was treated as a slow‑burn, almost inevitable evolution of capital markets. ESG finds itself increasingly caught in the crossfire of global politics and trade tensions; 2025 has been a year of reckoning for sustainability-minded investors and businesses. New data from think-tank The Conference Board shows that 80% of corporations are recalibrating their ESG strategies, not because the fundamentals have changed but because the political and regulatory headwinds have grown stronger. In particular, tariffs — once purely economic instruments — are now reshaping how and where sustainability efforts can take root. South Africa has long taken a measured — some would say pragmatic — approach to integrating sustainability factors, yet recent events prove we are not insulated from international pressures. The US tariffs on South African exports have reminded us that global trade decisions have real consequences locally, especially when they clash with long-term sustainability goals. ESG is not a fad. Nor is it a marketing exercise, or a nice-to-have. It is fundamentally a nonfinancial risk management tool that must be systematically incorporated into investment processes. While the terminology may evolve — some companies are even dropping the term “ESG” in response to political backlash — the discipline behind it is here to stay. When trade policy disrupts sustainability According to The Conference Board’s survey of 125 large US and multinational companies, two-thirds believe new trade measures (tariffs) “will hinder progress on achieving sustainability goals”. Nearly half expect trade policy to “delay sustainable investments in sustainable operations”. In addition, 52% of respondents report “reworking their sustainability messaging, including moving away from the term ESG”, while maintaining the substance of it. ESG continues to be highly politicised, framed in some regions as a cost burden or ideological agenda. This distracts from its original and enduring purpose: identifying long-term risks and opportunities that don’t appear on traditional balance sheets. But that raises a deeper, more important question: Is ESG actually to blame here? Or is something else — policy decisions, for instance — getting in the way of progress? Let’s take a closer look. Trade policy, especially in the form of tariffs, is making it more expensive to pursue sustainable outcomes. For example, when clean energy components (such as solar panels or electric vehicle batteries) are subjected to tariffs, their costs rise. That slows down corporate decarbonisation initiatives, not because companies no longer care about climate goals but because the commercial reality has shifted. In emerging markets such as South Africa, where governments are already balancing decarbonisation with urgent developmental priorities, these disruptions cut especially deep. Many companies have spent years building supply chains that aren’t just cost-efficient but also ethical, transparent and carbon-conscious. Tariffs can throw those carefully built systems into disarray. Suddenly, organisations have to restructure global operations under time pressure and cost strain. In that scramble, sustainability can quickly fall down the list of priorities, not because ESG isn’t working but because the broader operating environment is working against it. ESG is not a trend or a label. It is, at its core, a risk management lens — one that helps identify material long-term risks and opportunities that don’t appear in traditional financial models. Whether it’s climate exposure, labour conditions or supply chain fragility, these factors have real financial consequences if ignored. Yes the ESG label has become politically charged in certain markets. And yes, businesses are feeling the heat. But effective ESG integration does not depend on what it is called — it depends on what it does. And what ESG continues to do, when applied correctly and rigorously, is drive more resilient decision-making. That means continuing to push the ESG agenda forward, even when it’s difficult. Especially when it’s difficult. What next? Even in today’s constrained global environment, paths forward still exist. Many South African businesses are pivoting towards regional integration under the African Continental Free Trade Area as a strategic response to global trade uncertainties. This shift strengthens resilience against tariff shocks and may reinforce ESG goals by shortening supply chains, reducing emissions and supporting local economies. Investors are increasingly moving beyond ESG checklists, guided by frameworks such as double materiality, SASB standards, the EU’s sustainable finance disclosure regulation and South Africa’s regulation 28. These developments reflect a more nuanced approach — one that values ESG for its societal and environmental impact as well as its relevance to financial performance and long-term risk management. In private markets, especially infrastructure and clean energy, ESG-aligned investment opportunities are growing. But these aren’t easy wins. They require long-term commitment, patience and an appreciation for both risk and impact. Liquidity trade-offs must be managed carefully. Capital must be allocated with foresight. And above all, communication must be honest — about the complexities of doing ESG properly in a world that often demands speed over substance. The intersection of trade policy and ESG is becoming increasingly complex, but that’s no reason to retreat. Done right, sustainability isn’t a burden — it’s a strategy for resilience. Even when the road gets rough, staying the course matters. Because ultimately, the greater risk lies not in doing too much, but in doing too little, too late. ‘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/fm/opinion/on-my-mind/2025-07-03-conway-williams-why-esg-still-matters/?utm_source=Arena+Holdings&utm_medium=email&utm_campaign=Today%27s+Top+Stories%3A+Why+ESG+still+matters%2C+Jubilee+pivots+to+copper%2C+LETTER%3A+Israel%27s+global+role+in+repression&utm_term=http%3A%2F%2Fwww.businesslive.co.za%2Ffm%2Fopinion%2Fon-my-mind%2F2025-07-03-conway-williams-why-esg-still-matters%2F

Viv Vermaak | 6 July 2025 World attention is increasingly focused on South Africa. In the vast, rich country of extremes and diversity, human dramas are played off every day. It is the country of gold, diamonds, apartheid and Soweto. Despite this, a crucial element of South African political reality has largely escaped detection: the BEE billionaires. The above paragraph is the inside blurb of the best-selling book: The Super Afrikaners . I just changed the words “The Afrikaner Broederbond” with “BEE billionaires”. This highly organised clique of super-rich black businesspeople has, by a sophisticated political intrigue, waged a remarkable campaign to harness political, social and economic power. Again, this sentence is from the book. I only changed the concept of “Afrikaner” to “super-rich black businesspeople”. President Ramaphosa is correct in referencing the economic emancipation of the Afrikaner as a valid comparison when discussing the legislative force behind BBBEE (Broad-Based Black Economic Empowerment). He said to Corné Mulder in Parliament: “The history of your people, they became economically empowered because of the laws that were put in place, the sweet deals they were given, and they became more and more serious economic players.” Mulder could not argue, as Ramaphosa’s observations are valid, and I believe in good faith. We need more black people to become economic players, as well as economic empowerment, to widen. Our bottom 50% of poor people have hardly been uplifted. Who will help them? History has shown that small groups of individuals, an ‘elite’, hold a disproportionate amount of power and influence in society, shaping policies and decisions that affect everyone. According to ‘elite theory’, these small groups are not only present in politics, but in financial institutions, think tanks, corporations and societal structures. The basic tenet of this theory is that power is concentrated. The elites are unified, the non-elites are diverse and powerless. Elites’ interests are fused due to common backgrounds and positions, and the defining characteristic of power is institutional position. Examples of this might be the Afrikaner Broederbond, the PayPal Mafia, the ‘Tech Bro’ billionaires in the USA, the Russian oligarchy, any government, really, lobby interest groups, and the BEE billionaires. Depending on the group’s vision, its influence might be positive or negative on society at large, and might have an impact on history itself. Motives of the beneficiaries In South Africa, the motives of the beneficiaries of BEE are increasingly being questioned. Wits professor William Gumede is quoted as saying: “Black Economic Empowerment has led to increased poverty, unemployment and inequality in South Africa. Over R1 trillion has moved between fewer than 100 (politically connected) individuals since 1994. The same people have been empowered and re-empowered over and over again for decades.” Genuine South African entrepreneurs who are not politically connected do not benefit from BEE funding. It is a sentiment echoed by the liberal and righter-wing press. In a phenomenon named ‘economic capture’, it is claimed that 100 black businesspeople are capitalising on 1 trillion rand. One can assume the commentariat knows the names of these people; otherwise, they would not be making such confident claims. They should publish these names so we can all be educated. The list can be called: The Super Blacks . Someone can write a book about the B-BBEEB (Broad-Based Black Economic Empowerment Billionaires). Is it economic capture, or is a lot of wealth creation happening, we just don’t know about it? Let us investigate. A trillion rand sure can build a lot of homes, fix a lot of infrastructure, and create many jobs for the lower classes. Marius Roodt, deputy editor of the Daily Friend and regular contributor to the Daily Friend Show, recently jokingly referred to the elite as ‘upper-class twits.’ It is a colourful phrase that demystifies these shadowy groups and points out their disconnect from the majority of the people in the country. Of course, not all twits are upper class, not all upper-class people are twits, and many of us are an upper-class twit to someone else, but South Africans are starting to realise that a form of money hoarding is taking place here in the name of ’empowerment.’ I recall, as a child, the outrage caused when Super-Afrikaners was published. The Afrikaans community had two reactions at the same time; the first a denial that the Broederbond existed, the second that it was a bloody cheek that the names of the non-existent group were made public. Everybody rushed to see if they or their family were on the list. You would be simultaneously relieved if your family was not outed, while also being disappointed that they were not somehow in line to receive some of the largesse. Someone should do it The book published a comprehensive membership list of 7,500 names. So, to print but a  hundred names would not take up that much space, would it? It can fit into a column. Someone should do it. Then we can see what we are dealing with and move the topic out of ‘conspiracy’ territory. The Broederbond list included members in the cabinet, prominent churchmen, school principals, geologists, receivers of revenue, farmers, jewellers, doctors and building contractors. More importantly, it revealed a highly organised mindset of harnessing skill around a single cause – to advance the interest of your group. Nothing wrong with that, and it is clear that BEE initiatives advance the financial interest of black groups. The next step is to make the first two Bs in the B-BBEE real. Trickle-down economics must become a stream. South African billionaire and mining magnate Patrice Motsepe is a great philanthropist and is known for his generosity. He is said to have pledged half (50%) of his wealth to the ‘Giving Pledge’ upon death, which will be distributed to charity. We might ask if he is prepared to consider a type of living pledge where we dedicate a significantly smaller portion of his wealth to helping the government with projects they seem to be struggling with: housing, job creation or infrastructure maintenance. I am not suggesting charity; it is real change. It is a project where the wealthy and successful directly step in and do the work our government is failing to do. We publish their successes and replicate them. He likes fixing things Johann Rupert, while not black, is certainly upper-class, and a right royal twit for telling the American president he sleeps with his doors open in his luxury mansion with security guards, showing exactly the disconnect Roodt was talking about. Rupert can be an honorary member. We can add Rob Hersov; he likes fixing things. Plus − ask Magda Wierzycka to join. We’ll call them the B-BBEEB+. Let those with the means and authority share it with others. Each billionaire or super-rich businessperson can pick an area of contribution and dedicate a year and R10 million, not for profit, but for the future. 100 Billionaires, a hundred fixes. They can pick which projects they want: building a house, fixing schools, assisting with title deed transfers, supporting startup enterprises, upgrading a clinic, anti-corruption fundamentals, basic learning skills, entry-level building skills, projects teaching South Africans how to speak to each other without descending into race arguments, economic growth theory, making a community safer with working lights, patching up a train station, building a community garden, upgrading a road, sponsoring a police vehicle, economic growth basics, lessons in how to be a good councillor, broadening employment opportunities, building another house, creating another job.  A small group like the B-BBEEB+ can change the course of this country in a short space of time – if they set their minds and money to it. We have to get started now. Our country needs the Super Blacks. Call a summit, get them all in the same room. I can imagine the opening speech at such a gathering: “Show me a greater power ….” “Do you realise what a powerful force is gathered tonight between these four walls? Show me a greater power on the whole continent of Africa! Show me a greater power anywhere…” This speech was made by H.J. Klopper at the celebration of the Broederbond’s 50 th anniversary. The wheel turns, as President Ramaphosa correctly points out. It is time for another group to deploy their powerful forces. BEE has transferred enormous capacity and opportunity to its beneficiaries. But with that comes responsibility. It needs to make its circle bigger. If this group can agree on a common vision for economic growth, while opposing enrichment for the few, the future of this country will take a different trajectory. Moreover, if the BEE 100 takes up the challenge, the rest of SA, in all its rainbow colours, will be cheering them on. ‘Disclaimer - The views and opinions expressed in this article are those of the author(s) and not necessarily those of the BEE CHAMBER’. https://dailyfriend.co.za/2025/07/06/the-bee-100-publish-their-names/

Seth Thorne | 6 July 2025 The Department of Tourism (DoT) has confirmed that it is investigating allegations of irregularities in its flagship multi-million-rand programme aimed at boosting tourism safety and tackling youth unemployment. The Tourism Monitors Programme (TMP) is under scrutiny after allegations of a manipulated tender process surfaced around a recent contract awarded at KwaZulu-Natal’s (KZN) Ezemvelo Nature Reserve, raising concerns about the broader programme. In KwaZulu-Natal, the company awarded the contract was initially disqualified for failing to meet a requirement to have a physical office in the province – a condition that was amended at the eleventh hour. Despite also falling short of the minimum scoring threshold in Gauteng’s preliminary evaluation, the company was ultimately awarded the contract. Meanwhile, another firm that was earmarked for the project claims that, despite engaging officials regarding an “imminent” official appointment, the bid “was ripped from under [their] feet.” DoT spokesperson Tasneem Carrim confirmed with BusinessTech that all these allegations are currently under investigation. The appointed company maintains that its hands are clean, was never informed of any disqualification, and claims it has successfully implemented the project. Tourism is a critical component of South Africa’s economy, but it continues to be marred by issues related to crime, prompting the development of the National Tourism Safety Strategy. Tourism Monitors collaborate with SAPS and other law enforcement and receive safety training through a National Certificate in General Safety Practices (NQF Level 3). The TMP places unemployed youth at high-traffic tourist sites to boost safety and gain work experience through the Expanded Public Works Programme. Backed by a R174.5 million budget, it trained and placed over 2,300 monitors last year through various implementing agents. Controversy around the bidding A specific controversy centres on the appointment of service providers to manage the programme’s implementation at the Ezemvelo Nature Reserve in KwaZulu-Natal. Thembanathi Group, a skills development and training company, responded to calls for bids for an 18-month contract, bidding for the Ezemvelo and KZN tenders, for R3.17 million and R4.32 million, respectively. Preliminary Bid Evaluation Committee (BEC) minutes from December 2023, seen by BusinessTech, show that Thembanathi Group received an initial average technical evaluation score of 90.33 for Ezemvelo and 90.67 for KwaZulu-Natal – the highest among bidders in that round. In their final round of evaluations among shortlisted companies, Thembanathi placed second in the KZN bid, scoring 93.18 out of 100, trailing behind another bidder who achieved a perfect score of 100 out of 100. For Ezemvelo, they received the third highest score of 82.31. The minutes state that they were “recommended for Ezemvelo as the two highest bidders are already recommended for two sites.” Subsequently, DoT officials contacted and conducted a due diligence site visit at Thembanathi. Thembanathi was later briefly announced as the successful bidder for Ezemvelo on the DoT’s website. However, it was subsequently removed from the site, and no formal appointment letter was sent. According to communications seen by BusinessTech, the DoT sent an invitation to the group on January 10, 2024, for an introductory meeting of appointed service providers scheduled for January 12. Thembanathi was also asked to begin behind-the-scenes tasks, including recruiting learners, to avoid delays. They were introduced to Ezemvelo Wildlife Management and tasked with consolidating online and in-person applications with the reserve’s project manager. According to its CEO, Ntokozo Gwala, Thembanathi invested resources and contracted staff in anticipation of starting the project. On 22 January 2024, they were informed that the DoT planned to offer an induction workshop for service providers on 29 and 30 January 2024, to which they had initially been invited. Just after this, Gwala was allegedly instructed by a senior official to put everything on hold. Project “ripped from under our feet,” say Thembanathi According to Thembanathi, they learned that their “imminent appointment” had been withdrawn because the department said that its own Terms of Reference (ToRs) requiring service providers to have a physical office in the province of operation were “discriminatory”. “We were literally on the road to collect CVs when we received this call. No reasons were provided for this instruction,” said Gwala. A 21 December 2023 Departmental Bid Adjudication Committee meeting noted Thembanthi as the recommended bidder for Ezemvelo, but they decided to reconsider disqualified bidders. In the initial meeting in early December 2023, the BEC disqualified MMC Business Solutions JV Siva Security Services from Ezemvelo for failing to provide proof of office in the province they applied for, instead submitting proof for Gauteng.  According to paragraph 3.3 of their ToR, “bidders… must have a physical office within the province they are applying for and submit proof thereof.” However, during a BEC meeting on 24 January 2024, the disqualification of unsuccessful bidders was reconsidered. They said that they did not explicitly “state in the ToRs that… Ezemvelo requires proof of office in KZN.” Applicants for ACSA and SANBI sites were not held to the office requirements. The minutes stated that the Departmental Bid Adjudication Committee “requested that the principle used for disqualifying and qualifying bidders should be applicable across.” The January 2024 BEC meeting resolved to recommend MMC Business Solutions Joint Venture with Siva Security Services for the Ezemvelo Nature Reserve project, saying that they were the “third highest bidder,” and not Thembanathi. They approved the award at a cost of R2.86 million, lower than Thembanthi’s. Other allegations Gwala contends that if the ToRs were discriminatory as stated by the committee, “the correct and ethical” procedure would have been to re-advertise the bid with revised terms, not to change the process internally, alleging it to be “flawed and corrupt.” According to discussions among individuals familiar with the department, there are allegations that the BEC chairperson heavily influenced the decision to change course. He allegedly had a connection with someone involved with the service provider through their church. In response to questions from BusinessTech, the chairperson said that although he knows of the person given that they attend the same denomination, he does “not have a personal relationship with him.” Asked whether the fact that they knew of each other influenced the awarding of the bid, the chairperson categorically stated, “absolutely not.” “I was involved in the BEC, [and the accused’s] profile was not featured in any of the documents I evaluated,” he said. “The BEC does not award bids. It merely evaluates and recommends to the BAC.” “The Department has clear and robust supply chain management policies in place, which include the declaration of interest forms, oversight by multiple governance structures such as the BAC.” Gwala also questioned how “someone who was deemed technically weak to run the project in Gauteng, would suddenly be good enough to run the same project in KZN (Ezemvelo).”  According to BEC minutes, the joint venture’s preliminary evaluation score for Gauteng was 74.67. As such, it was “disqualified for further evaluation, as they failed to meet the minimum required score of 80 points,” for further evaluation, according to the minutes. Thembanathi Group has lodged complaints with the Public Protector, the Minister’s office, and the Presidency. The matter is now being pursued through legal channels. Responses to the accusations Pearl Maluleke, Director of Siva Security and MMC Joint Venture, told BusinessTech that “at no point were we informed by the Department of Tourism of any disqualification from the procurement process.” “The Joint Venture did not receive any official communication indicating disqualification or any internal procurement findings of that nature.” “Our first formal communication from the Department was the appointment letter, which we received in good order, confirming our successful bid,” added Maluleke. Maluleke said that as no disqualification was formally communicated to them, there was likewise no indication of any change in status that required clarification or justification by the Department. They proceeded in accordance with the appointment and the contractual obligations outlined therein. Maluleke added that the joint venture demonstrated a “commitment to transparent, effective project delivery in support of national tourism development goals.” She added that the project was successfully implemented over a 12-month period, in line with the contract and the Department’s objectives, which the DoT echoed. A total of 150 Tourism Monitors received classroom-based theoretical training, followed by structured workplace experience at various Ezemvelo sites across KwaZulu-Natal. Carrim reiterated that the abovementioned alleged irregularities in the tender process, including interactions between officials and bidders, are currently under investigation.  She said that any allegation of maladministration in the department is taken very seriously, with consequences for any findings of impropriety. She also said that contractual obligations with appointed service providers were “executed satisfactorily,” and stressed that such accusations should not mar the entire project. The project “provides some skill sets to our youth and opens up employment opportunities for them,” along with safety improvements for tourists, added Carrim. Democratic Alliance MP and party tourism spokesperson Haseena Ismail raised “critical concern” about the TMP, calling the programme’s implementation “deeply flawed.” She cites alleged poor oversight, limited training, and procurement irregularities. Her party has called for a full audit of the programme. ‘Disclaimer - The views and opinions expressed in this article are those of the author(s) and not necessarily those of the BEE CHAMBER’. https://businesstech.co.za/news/government/826428/r174-5-million-tourism-safety-tenders-under-the-spotlight-after-serious-allegations/

Gcwalisile Khanyile | 3 July 2025 Land reform beneficiaries in South Africa are experiencing major challenges in making land productive and benefiting from it, due to the lack of post-settlement support. This is because the country’s land reform focuses solely on redistribution, but not equipping beneficiaries with the necessary technical, infrastructural, and financial support to sustain that land, which is an important component in making land redistribution successful but is ignored, according to experts. Dr Shenelle Lottering, from the University of KwaZulu-Natal’s College of Agriculture, Engineering and Science, said inputs such as seeds and fertilisers, even basic farming equipment and training, are either limited or absent.  She said this creates a situation where, despite having land, many beneficiaries struggle to farm it productively.  “Customary land tenure adds another layer of complexity, because it is governed communally as well as by traditional authority. So, although it is providing access to land, it is not giving secure land tenure, like what private land ownership would; there is no title deed.  “This becomes an issue when land needs to be used as collateral or to invest long-term in the land, such as through infrastructure, irrigation, or improved soil management practices. In terms of agricultural investment and productivity, the lack of formal land rights in communal areas discourages both public and private investment. Investors are often hesitant to support projects where land tenure is unclear or where there may be disputes over ownership and access,” Lottering said. She added that land reform has had an uneven impact on agricultural productivity. While the moral and political imperatives of land reform are clear, the economic outcomes, particularly in terms of productivity, have been mixed and, in many cases, underwhelming.  “Nationally, what we’ve observed is that while land has been redistributed, in many instances it has not remained as productive. This is not because beneficiaries are incapable, but largely due to the lack of coordinated post-transfer support; things such as access to capital, training, and markets are often missing. As a result, many redistributed farms experience a decline in productivity, especially in the early years. “Regionally, the picture is more nuanced. In some provinces like Limpopo and KwaZulu-Natal, where communal tenure systems and traditional leadership structures are strong, you often see different dynamics playing out. Here, land may be accessed more easily by communities, but long-term investment is often stifled due to unclear tenure arrangements,” Lottering said.  Conversely, in provinces like the Western Cape, where some reform projects have been better supported, often with stronger partnerships between the state, NGOs, and commercial farmers, we’ve seen relatively more successful models of land reform that maintain or even improve productivity. But these are still the exception rather than the norm, she said. She added that land reform should be approached not just as a political or economic issue, which is happening in South Africa, but as a long-term investment in building inclusive, resilient rural economies that can contribute meaningfully to national food security and poverty reduction. “New interventions should include stronger support for beneficiary selection and preparation, structured post-settlement support packages, and partnerships with experienced commercial players and NGOs. Importantly, policies must actively promote the inclusion of women, youth, and marginalised groups. Without this inclusion, there will be no success as women are the backbone of agriculture and the youth are the future of agriculture,” Lottering said. In 1994, total farm land with title deeds, thus outside what the apartheid government set aside for black people, covered 77.58 million hectares of South Africa’s total surface area of 122 million hectares. During his 2024 State of the Nation Address, President Cyril Ramaphosa said: “Through redistribution, around 25% of farmland in our country is now owned by black South Africans, bringing us closer to achieving our target of 30% by 2030.” A total of 19.3 million hectares, or 24.9% of all freehold farmland in South Africa, previously owned by white landowners, has been restored, redistributed to black South Africans, or moved to state ownership, according to agricultural experts from Stellenbosch University. Professor Johann Kirsten, the Director of the Bureau for Economic Research at Stellenbosch University said that although the number may look heartening, given that it is close to the 30% target set out in the National Development Plan, the issue of concern is that the state is now a major owner of agricultural land with more than 2.5 million hectares. This is through the Agricultural Land Holding Account Trading Entity, which acquires land and property under the Proactive Land Acquisition Scheme, implemented in 2006, to allow state ownership for programme lessees. Kirsten said by June 2023, the state had acquired 2.5 million hectares of productive farmland through the programme. “Most of the roughly 2,500 beneficiaries have a 30-year lease agreement with the state. There are several farms where no agreement has been signed. The arrangement makes reference to the leasing of land. But there’s no mention of the transfer or sale of land to beneficiaries,” he said. The acquisition strategy was a noble attempt at land reform. It had some clear objectives: acquire land of high agricultural potential; integrate black farmers into the commercial agricultural sector; improve beneficiary selection; improve land use planning; and ensure optimal productive land use, Kirsten said. “But the programme has been disappointing. Virtually no land has been transferred to individuals. Most is leased to beneficiaries, and in some cases, the farms are illegally occupied. More than half of the current beneficiaries on the leased land have not shown any substantial agricultural production,” he highlighted. Kirsten added that land should be in the hands and control of entrepreneurs, not the government. “It is of the utmost importance that the government must act on this ineffective and politically charged system of land leases and ensure that beneficiaries are getting secure rights to the land. If not, the question about why there are so few successful black commercial farmers in South Africa will continue to be asked,” he said. According to Stellenbosch’s Bureau for Economic Research, the factors behind this failure include poor beneficiary selection, inadequate support and infrastructure, and rampant crime. Inadequate post-settlement support, stakeholders appointed to support the new farmers were poorly monitored and not working in an integrated manner, and agricultural infrastructure, both off-farm and on-farm, needed attention. The Bureau based its piece on a 2019 research report by the Agricultural Research Council for the Department of Rural Development and Land Reform, which was not publicly disclosed. The Bureau also noted that the failures mentioned suggest that the state will always be a poor player in redistributing land, as it will always hold on to it. In a piece co-authored by Kirsten and Wandile Sihlobo, a senior fellow at the Department of Agricultural Economics at Stellenbosch University, and published by The Conversation , they highlight that calls for the state to redistribute the 2.5 million hectares of land to black farmers have been falling on deaf ears, and black farmers continue to despair. “The government has been slow to distribute the land it has acquired. This shows that the problem of South Africa’s land reform is not only about acquisition but also the distribution of land with title deeds to beneficiaries,” Kirsten and Sihlobo said. The experts also clarified that there are more black farmers in South Africa than white farmers.  “And not all white commercial farm operations are ‘large-scale’, and not all black farmers are ‘small-scale’, ‘subsistence’ or ‘emerging’. Most farm operations can be classified as micro or small in scale. “Indeed, we are a country of two agricultures with black farmers mainly at a small scale and accounting for roughly 10% of the commercial agricultural output. Still, this doesn’t mean they are not active in the sector. They mainly still require support to expand and increase output, but they are active,” Kirsten and Sihlobo said. They said that the government’s Blended Finance programme, in collaboration with the development finance institutions and other financial institutions, should provide financial support to the selected beneficiaries.  Kirsten and Nick Vink, a professor of Agricultural Economics at Stellenbosch University, said South Africa used to have an extensive support system for farmers, and under apartheid, white farmers received a host of subsidies. South Africa reached high levels of overall subsidisation of agriculture in the late 1980s. These were so pervasive that the country was on a par with the EU and US when measured on a per capita basis, the experts said.  A request for comment was sent to the Department of Land and Rural Development three weeks ago. Linda Page, the department’s spokesperson, did not respond despite multiple promises to do so. Reminders were also ignored. ‘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/news/south-africa/2025-07-03-land-reform-challenges-hindering-black-farmers-from-thriving-in-south-africa/

Shaun Smit | 2 July 2025 With South Africa’s skills shortage, the high cost of employee turnover and increasingly mobile skilled professionals, retention of top talent remains a cornerstone of organisational success. This is even more relevant in the context of the recently gazetted Employment Equity Amendment Act, Sectoral Targets and Employment Equity Regulations. To keep their best people, South African businesses must employ multifaceted strategies, including long-term incentives, such as Employee Share Ownership Plans (ESOPs). Retention challenges that businesses encounter include an ageing workforce, the emigration of professionals, and younger employees who increasingly seek purpose-driven work and flexibility. The job market is extremely competitive, especially in finance, IT, and engineering. The Employment Equity Amendment Act, effective from 1 January 2025, introduces five-year sectoral targets for black people, women and people with disabilities, and makes retention more important than ever. Companies with 50 or more employees must comply with these regulations to avoid penalties and ensure business continuity. Non-compliance can result in significant penalties and exclusion from public contracts. This means organisations need to rethink their approach to attraction and retention, and implement a blend of strategies that resonates with their employees' needs and aspirations. Key tools that can help in achieving this goal include: Competitive compensation and benefits - Include retirement benefits, performance bonuses, and wellness programmes. Provide flexible work arrangements to support employees seeking work-life balance. Long-term incentives - Use deferred bonuses and Employee Share Ownership Plans (ESOPs) to align employee interests with the company’s success, building loyalty and motivation. Career development opportunities - Encourage upskilling through leadership programmes, mentorship, and tuition support, allowing employees to invest in their growth. Workplace culture and engagement - Promote inclusivity and recognition to improve employee satisfaction. Use engagement initiatives like regular feedback sessions and diversity strategies to create a sense of belonging. Employee ownership as a retention tool Employee ownership is increasingly recognised as a powerful strategy for businesses seeking to attract and retain skilled professionals and key talent. This approach has gained traction globally, and offers significant benefits for retaining employees. Employee Share Ownership Plans (ESOPs) and Management Share Ownership Plans (MSOPs) are particularly powerful retention tools in the South African context. They allow eligible employees to acquire equity, directly or indirectly, in the company, resulting in several benefits: Alignment of interests: Employees become co-owners, which deepens their commitment to the company’s goals. Financial upside: The potential for financial gain motivates employees to stay longer. Retention through vesting: Ownership benefits that vest over time – common in MSOPs - encourage long-term employment. Structuring ESOPs to support B-BBEE objectives can improve compliance and enhance competitiveness. Retaining Black talent positively impacts the Management Control B-BBEE pillar and supports meeting Employment Equity requirements. Employee ownership doesn’t just aid retention and support B-BBEE compliance though. It also transforms organisational culture. When employees have a stake in outcomes, their goals align with those of the business. This alignment boosts engagement and productivity, with employees being more motivated and committed. Ownership also drives innovation, leading employees to share ideas and collaborate. A culture of shared ownership lowers turnover rates and strengthens the internal knowledge base. By adopting employee ownership strategies, businesses can become more resilient and create a committed workforce that contributes to success. The retention challenge Amid a skills shortage, South African businesses must prioritise talent retention. This pressure is exacerbated by the Employment Equity Amendment Act, which underscores the importance of retaining historically disadvantaged talent as a moral, strategic, and legislative priority. While short-term incentives are valuable, long-term strategies, such as career development and equity participation, provide the greatest returns. Well-structured ESOPs serve as an effective means to retain talent and create shared value. They enhance employee engagement and loyalty while delivering measurable benefits in business performance. Retaining skilled talent won’t come from a single fix, but from a deliberate mix of strategies that reflect the complex, human side of work in the 21st century. ‘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.bizcommunity.com/article/no-one-stop-solution-to-successful-talent-retention-259077a

Creamer Media | 30 June 2025 South Africa’s rural and peri-urban areas are home to a vibrant informal economy—an enterprising ecosystem of spaza shops, street vendors, barbers, mechanics, and countless micro-enterprises that shape daily life in the townships. It’s a space defined not only by survival, but by creativity and community-rooted resilience. And there’s a name for it: kasinomics. Coined by South African marketer and author GG Alcock, kasinomics speaks to a R1 trillion economy built on grit, trust, hustle, and lived experience. On International Micro-, Small and Medium-sized Enterprises (MSME) Day (27 June), Sappi Southern Africa is proud not just to acknowledge the impact of kasinomics—but to be an active partner in sustaining its momentum and unlocking its true potential. “MSMEs are the oxygen of the South African economy,” notes Lesiba Lamola, Regional ESD Sourcing Manager at Sappi. “They create jobs, they drive innovation, and most importantly, they uplift entire communities. Our mission has been to move beyond handouts and into meaningful partnerships.” That mission is reflected in the Abashintshi programme launched in 2018, which introduced 120 young people to Asset-Based Community Development (ABCD) principles, equipping them with the skills and confidence to spot opportunities and ignite enterprise in their own backyards. From that initiative, a wave of local entrepreneurs has emerged—each with a compelling story. In Hlokozi, KwaZulu-Natal, Patrick Gcina Khumalo evolved from a self-taught welder into the owner of a certified carpentry and welding business. With tools, equipment, training, and ongoing mentoring from Sappi’s Enterprise and Supplier Development (ESD) team, Patrick now takes on larger contracts and employs others in his community. “This support has transformed my business, giving me the confidence to take on bigger projects, build a better future, and even create jobs in my community,” he says. Equally inspiring is Nonkululeko Zimba, based in Vimbukhalo near Winterton. A former Abashintshi participant, she used her ABCD training to launch Sehlukaniso (Pty) Ltd, a brickmaking business that helps community members build dignified homes. With funding and technical support from Sappi, her business has expanded its reach—and its purpose. “I still can’t believe my dream has come true,” Nonkululeko shares. “This is how I bring change to my community.” Sappi’s broader ESD strategy, formalised in 2018, continues to catalyse grassroots development with tangible outcomes. In FY2024 alone, the company spent ZAR372 million procuring from SMEs—surpassing its target by ZAR250 million—while sustaining over 1,500 jobs. A further ZAR57 million was spent through subcontracted SMEs, and ZAR900,000 was invested in SME training and development. The results speak volumes. From logistics to construction, lives are changing. Through a strategic partnership with the Ithala Development Finance Corporation, transport entrepreneur Sanele Mkhize took ownership of three new Mercedes-Benz trucks valued at R11.6 million. Meanwhile, Mpume Gumede of Thuba Construction was able to acquire heavy machinery after being awarded a five-year Sappi contract to transport bagasse at the Stanger Mill. “I cried tears of joy when the loan was approved,” she says. “Now I know I’ll meet Sappi’s specs and grow my company.” The company’s renowned Khulisa programme is an anchor of inclusion across the forestry value chain. In 2024, over 4,100 growers delivered 318,116 tons of timber to Sappi operations—resulting in ZAR332.6 million paid to these small-scale suppliers. Over 550 of them completed forestry training during the year, covering everything from safety to silviculture management. Beyond timber, some Khulisa participants—like Baleti Estate in Mpumalanga—have begun to diversify their enterprises. With Sappi’s support, Baleti now produces and sells honey at the Ngodwana Farm Stall, while receiving continuous training and certification assistance. “Our perspective has completely changed,” says Director Mandla Mooko. “Sappi’s guidance helped us expand and see new possibilities.” Back in KwaZulu-Natal, the Inkanyezi Yamahobe Trust in Richmond has grown into a successful community-based enterprise with 468 hectares of timber-producing land. With Sappi’s help, they’ve established market access, improved productivity, and now deliver annual dividends of R40,000 per household—with ambitions to double that figure. “Sappi’s partnership has been a game-changer for us,” says Chairperson Thando Nxele. “It’s enabled us to grow, thrive, and contribute meaningfully to the local economy.” There’s also the story of Nhlanhla “Mhlekazi” Phoswa, who began as a forestry labourer in 1985 and now runs one of the largest silviculture contracting firms in the KZN South region. Awarded a five-year contract with Sappi in 2022, his company, Mhlekazi Forestry, has grown from 50 to 80 employees—all but one from surrounding communities. “Our goal is to upskill and employ even more people,” he explains. Through it all, the unifying thread is opportunity—the kind that’s shared, earned, and scaled. With 942 MSMEs actively participating in Sappi’s supplier value chain, the message is clear: when corporate South Africa builds deliberate, values-led partnerships, transformation takes root. And that’s the spirit of MSME Day—celebrating not just small businesses, but the outsized impact they have in reshaping industries, empowering households, and creating intergenerational legacies. Because kasinomics isn’t just a buzzword—it’s a blueprint for a more inclusive future. And together, brick by brick, hive by hive, tree by tree, that future is already being built. ‘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/sappi-powers-township-enterprise-with-strategic-msme-investment-fuelling-south-africas-kasinomics-transformation-2025-06-30

Hope Ntanzi | 1 July 2025 President Cyril Ramaphosa has reaffirmed South Africa’s commitment to broad-based economic transformation, emphasising that the country’s empowerment laws are practical, effective, and central to fostering inclusive and sustainable growth. In his weekly letter to the nation, Ramaphosa highlighted that the Broad-Based Black Economic Empowerment (B-BBEE) framework and the Equity Equivalent Investment Programme (EEIP) are key to both economic redress and development. “Amongst the most salient features of our country’s empowerment laws are their practicality, feasibility and responsiveness to economic conditions without deviating from the objective of redressing the economic injustices of exclusion of the past,” said Ramaphosa. He explained that South Africa’s transformation agenda is guided by two complementary goals: changing the racial ownership and control of the economy, and ensuring inclusive, long-term economic growth that brings black South Africans, women, and the youth into the mainstream. The EEIP, designed for multinational firms whose global structures may not allow equity ownership transfers, enables impactful investments in skills development, enterprise support, and innovation. Addressing misconceptions about the programme, Ramaphosa clarified: “Some in the public space have recently sought to suggest that the EEIP represents a circumvention of B-BBEE laws -and that it is a response to the conditions of a particular company or sector. ''Neither is factually correct. Firstly, the EEIP is not new and has been in existence for a decade.'' He reaffirmed that EEIP is “firmly embedded in our laws” and comes with stringent requirements and government oversight to ensure meaningful, broad-based impact. ''The Broad-Based Black Economic Empowerment legal framework applies to all companies wishing to invest in and do business in our economy, whether they are local or foreign.'' This comes as Elon Musk’ s satellite internet company, Starlink , has expressed interest in entering the South African market, despite Musk's previous criticism of the country’s B-BBEE legislation. Companies like Microsoft, Amazon, IBM, Samsung, and global automakers including Toyota and BMW have successfully used EEIP to fund socio-economic development, support black-owned enterprises, and advance South Africa’s digital and industrial transformation, he said.  ''By way of example, last year IT giant Microsoft announced a R1,32 billion investment over ten years in skills and supplier and 4IR research and development - under the EEIP. ''These firms have leveraged the EEIP to direct investment into local development, to incubate black, youth and women-owned businesses, and to fund skills development. This has in turn assisted government in achieving a number of policy and also infrastructure goals''. “Equity Equivalents have been proven to be a practical B-BBEE compliance tool for multinationals operating in South Africa, and we will continue to leverage them in pursuit of economic growth and job creation.” Ramaphosa further highlighted that B-BBEE compliance should not be seen as a burden, but as an investment in the country’s future.  ''Not only do we have to move away from the perception that we must make a choice between growth and transformation – we also have to shift the mindset that compliance with B-BBEE is punitive or burdensome.  “By supporting firms with compliance they are able to embrace empowerment as a meaningful investment in South African’s long-term economic stability. This is a sound strategy that recognises that a transformed South African economy is one in which their investments are safe and guaranteed.” He also highlighted the need for South Africa to adapt to changing global economic dynamics.  “Just as our economy has evolved since our B-BBEE laws were first conceptualised, so has the playing field.” “The emergence of new industries, whether it is digital technology, advanced manufacturing, AI or renewable energy, means South Africa must actively position itself to attract greater foreign and domestic investment in these sectors or risk being left behind.” As the country works to strengthen competitiveness in emerging sectors, Ramaphosa reiterated that transformation remains non-negotiable. “Our empowerment laws remain central to our goal of economic transformation in South Africa and are here to stay.” Ramaphosa called on all sectors, business, labour, and civil society, to unite in building an inclusive economy: “Our focus going forward must remain creating an enabling policy environment, driving key structural reforms, supporting innovation, and reducing regulatory barriers to harness the potential of emerging industries and support existing ones.” ‘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/news/politics/2025-07-01-ramaphosa-reaffirms-b-bbee-and-eeip-as-essential-to-economic-redress-and-transformation/

Under Statement 400 of the Amended General B-BBEE Codes of Good Practice , clause 3.7 identifies the requirements for Enterprise and Supplier Development Beneficiaries.   Clause 3.7 states the following:   3.7 Beneficiaries of Supplier Development or Enterprise Development are EMEs, QSEs or Generic Entities which are at least 51% Black Owned or at least 51% Black Women Owned utilizing the flow through principle. However, in terms of Generic Entities, this is based on the provision that at the first instance of receiving assistance from the Measured Entity, it was identified that such suppliers were EMEs or QSEs. This recognition for Generic Entities will only be allowed for 5 years from the first time of receiving assistance from the Measured Entity.   Enterprise & Supplier Development Services  are available to assist Members with understanding these requirements.

Under B-BBEE Legislation the concept of Miliary Veteran Is found under the definition of Designated Group Supplier and linked to the Miliary Veterans Act 18 of 2011  which identifies a Military Veteran as follows:   “military veteran means any South African citizen who--   (a) rendered military service to any of the military organisations, statutory and non-statutory, which were involved on all sides of South Africa's Liberation War from 1960 to 1994;   (b) served in the Union Defence Force before 1961; or   (c) became a member of the new South African National Defence Force after 1994, and has completed his or her military training and no longer performs military service, and has not been dishonourably discharged from that military organisation or force: Provided that this definition does not exclude any person referred to in paragraph (a), (b) or (c) who could not complete his or her military training due to an injury sustained during military training or a disease contracted or associated  with military training;”   B-BBEE Verification Services  are available to Members in order to understand the definition of a Miliary Veteran.

Statistics South Africa is the source used to determine the Net Profit After Tax (NPAT) for calculating the targets for Enterprise Development, Supplier Development and Socio-Economic Development. The latest statistics were published during June 2025. The statistics in this version will be for the 1st quarter of 2025. Any B-BBEE Verification from hereon would most commonly apply the latest Industry Norm published by Statistics South Africa. For example, if a B-BBEE Verification takes place in July 2025, the latest published stats to be used would be those posted during June 2025.   Technical Compliance Services  is available to guide members in calculating their Targets.

Adriaan Kruger | 30 June 2025 The unemployment rate depends on your definition of employment … It happens from time to time that someone questions the integrity of the survey methods and accuracy of the figures produced by Statistics SA. The result is always the same – the head of Stats SA comes out all guns blazing to prove the statistical validity of his team’s work. The most recent debate around Stats SA’s figures erupted when Capitec CEO Gerrie Fourie remarked that the unemployment rate in South Africa could be as low as 10%. Stats SA sticks to its estimate of an official unemployment rate of nearly 32.9% – and the expanded unemployment rate of 43.1%. Fourie argues that Stats SA does not count everyone who is working in the informal sector. His view is probably influenced by the fact that Capitec has 24 million clients. He noted that nearly three million of Capitec’s clients earn an income without formal employment, and more than one million use their bank accounts to operate a small business. Fourie says the data suggests that some four million people are earning an income in the informal sector. In addition, the latest figures from the different banks in SA show that Standard Bank has around 12 million local clients, Absa has 12.7 million, FNB has 8.6 million, and Nedbank has 7.6 million. TymeBank states that it has 10 million clients. The total comes to nearly 75 million. It raises the question of why anybody would need a bank account – and apparently multiple accounts at more than one bank – if they don’t have money or don’t earn money somehow. Perhaps these figures support Fourie’s argument. Not so, says Stats SA head But the Capitec CEO received more criticism than support. Statistician-General Risenga Maluleke issued a statement saying that Stats SA does measure the informal sector. “The informal economy is not ignored,” says Maluleke. “Stats SA produces several statistical products that measure this sector, including the Quarterly Labour Force Survey (QLFS) and the Survey of Employers and the Self-Employed. The informal sector is measured, tracked and reported on consistently. Stats SA follows the guidelines set by the International Labour Organisation (ILO) for defining the informal sector, which is characterised primarily by the registration status and size of enterprises or businesses. “Our methods stand open to rigorous examination, inviting scrutiny to ensure integrity and trustworthiness. “The data we produce is publicly accessible, fostering a culture of openness,” he adds. “Our concepts, definitions and classifications are meticulously crafted, guided by the highest global standards and best practices. We take pride in our commitment to transparency, clearly articulating what we measure, and the methods employed to derive our insights.” Maluleke appeared on national television to assure people that the statistics are accurate. He took Fourie on: “If he says unemployment is sitting at 10%, it means 10% of 25 million, we’d have 2.5 million people who are unemployed in South Africa and then it means that we have 22.5 million people who are employed. The Sars [South African Revenue Service], from personal income tax doesn’t even have such numbers for starters." He says it is incorrect and misleading to suggest that Stats SA somehow “misses” those who are employed in the informal sector. The latest QLFS for the first quarter of 2025 estimates the working age population at 41.7 million of which slightly more than 25 million are considered to be in the labour force. The rest of the people are not working and not looking for work, including those still at school or studying, in jail or those who have a (wealthy and generous) spouse or family to provide for them. Around 16.8 million are classified as employed, including 3.3 million in the informal sector and more than one million in private households (domestic workers and gardeners). That leaves 8.3 million unemployed and looking for work. There are another nearly 3.5 million people who are classified as discouraged workseekers. The Stats SA report defines a discouraged workseeker as “a person who was not employed during the reference period, wanted to work, was available to work or to start a business, but did not take active steps to find work during the last four weeks” preceding the date of the survey. The employed, by gender and hours of work Source: StatsSA How Stats SA gets its data Stats SA says its sampling method is statistically correct and representative. The QLFS surveys households directly and collects information from approximately 30 000 dwelling units. It collects data on the labour market activities of all individuals aged 15 years and above in the selected dwellings. Desiree Manamela, chief director of labour statistics at Stats SA, says data collectors visit the selected dwelling units once every three months and interview all the people residing in the dwelling. “There can be multiple households within a dwelling unit. Everybody in those households will be interviewed,” she says. “The survey is structured in such a way that we don’t simply ask people whether they are employed or unemployed. There is a series of questions that we ask people within households and then we analyse the answers based on international standards to classify them according to different labour force statuses – meaning individuals are classified into three mutually exclusive and exhaustive categories following ILO hierarchy. “We have employed persons, we have unemployed persons, and we have people that we call inactive. These three labour market statuses are supposed to sum up to the working age population,” she says. “Employment takes priority over unemployment, and unemployment takes priority over inactivity. The first status that we derive is employment. “We first want to know, of the people who are in the working age population, how many are employed. Then, once you have classified the people that are employed, we move on to the next status, which is unemployment. Now we ask people questions where we are going to classify them into the unemployed or the inactive. Unemployment will take priority over inactivity.” Odd jobs regarded as employment It is quite a lengthy questionnaire that collects a lot of data. One should keep in mind, though, that the questionnaire has been designed to ensure that, based on individual responses, respondents are only asked questions that are relevant to them. Questions are arranged in six sections totalling approximately 30 pages. The questionnaire starts by identifying the respondents and covers basic aspects such as age, population group, sex, marital status, and education. The questions on employment details are asked of all persons aged 15 years and above who indicated that they did work for pay or profit – even if a person worked only for an hour during the week preceding the interview – or if they were temporarily absent. Odd jobs for payment and even unpaid work in a household business is regarded as employment. Stats SA asks about the type of work, main tasks at work, working hours, type of business, type of products produced, income, and participation in public work programmes. Time-related underemployment The QLFS collects data on how many people worked and for how many hours. A single hour of paid work during the past week classifies a person as employed. Some employed persons may report that they would like to work additional hours if the extra hours are paid. This information assists in deriving persons in time-related underemployment. The QLFS report for the first quarter of 2025 discloses that of the 16.8 million employed persons, only 9.4 million work a standard work week of 40 to 45 hours. Approximately 518 000 “employed” persons worked less than 15 hours a week. Stats SA measures this time-related underemployment by the more than 781 000 workers who said that they would like to work more hours for additional pay. We asked Manamela for a simple explanation of these statistics to confirm the information. “We don’t say a person who is working 40 hours a week is employed and somebody who is working only 20 hours is half-employed. You are either employed, unemployed or inactive; and for those employed, if they work less than 35 hours a week and are available and want to work more hours, then they are regarded as underemployed,” she says. These statistics prove Fourie wrong. If anything, most people may actually think that Stats SA is underestimating unemployment. People lie or leave out information There is also the possibility that the respondents in the survey are lying to the data collectors when asked whether they are employed. There are many reasons to lie, including those among the 18 million social grant beneficiaries who also work a day or two per week. Evading income tax is another reason to lie. And criminals wouldn’t be honest. Robbery, hijacking, drug dealing, cigarette smuggling, rhino poaching, investment scams, and prostitution generate an income, but these ‘self-employed workers’ won’t reveal their employment status. They simply bank the cash quietly. ‘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.moneyweb.co.za/news/south-africa/debate-around-unemployment-rate-grinds-on/

Cyril Ramaphosa | 30 June 2025 Among the most salient features of South Africa’s empowerment laws are their practicality, feasibility and responsiveness to economic conditions without deviating from the objective of redressing the economic injustices of exclusion of the past. This stems from the need to meet two separate but interdependent objectives. The first is to achieve substantial change in the racial composition of ownership, control and management of the economy to overcome a history of exclusion. The second is to achieve growth that is not only inclusive but sustainable in the long-term, by broadening the economic participation of enterprises owned by black South Africans, women and young people. The broad-based black economic empowerment legal framework applies to all companies wishing to invest in and do business in our economy, whether they are local or foreign. Empowerment laws are not unique to South Africa. These laws are often referred to as indigenisation or localisation measures. They exist in various forms in other emerging market economies with similar histories of race-based economic exclusion such as India, Zambia, Indonesia, Nigeria, Malaysia and Brazil. A number of these jurisdictions compel foreign investors or multinationals who wish to invest in the economies of those countries or in certain sectors of their economy to fully set aside equity stakes in their companies to local entities as a prerequisite for operating in the country. Barrier to entry This can serve be seen as a barrier to entry for investment in certain environments. However, we have found that many would-be investors do embrace these measures as they enhance inclusiveness, lead to broad acceptance of their companies and tend to grow market share. South Africa’s empowerment laws are distinct in that our empowerment or indigenisation measures are practical and innovative. In addition to having a pure equity participation measure, we have introduced the Equity Equivalent Investment Programme (EEIP). It was created to accommodate multinationals whose global practices or policies prevent them from complying with the B-BBEE ownership element through the “traditional” sale of equity or shares. It allows multinationals to invest in socioeconomic, skills and enterprise development in South Africa without selling equity in their local subsidiaries. Some in the public space have recently sought to suggest that the EEIP represents a circumvention of B-BBEE laws – and that it is a response to the conditions of a particular company or sector. Neither are factually correct. Firstly, the EEIP is not new and has been in existence for a decade. It is firmly embedded in our laws and is not an attempt to “water down” B-BBEE. Secondly, there are stringent requirements for multinationals to participate. All EEIP initiatives must be aligned to government’s economic policies and strategic goals. There is firm government-backed oversight over EEIP programmes that must be broad-based in terms of impact. Since its inception, the EEIP has encompassed a broad range of sectors and onboarded some of the world’s leading multinational firms such as Hewlett-Packard, Samsung Electronics, JPMorgan, Amazon and IBM as well as automotive firms such as BMW, Volkswagen, Nissan and Toyota. By way of example, last year IT giant Microsoft announced a R1.3-billion investment over 10 years in skills, supplier development and research & development – under the EEIP. These firms have leveraged the EEIP to direct investment into local development, to incubate black, youth and women-owned businesses, and to fund skills development. This has in turn assisted government in achieving several policy and infrastructure goals. Equity equivalents have been proven to be a practical B-BBEE compliance tool for multinationals operating in South Africa, and we will continue to leverage them in pursuit of economic growth and job creation. Shift the mindset Not only do we have to move away from the perception that we must make a choice between growth and transformation – we also must shift the mindset that compliance with B-BBEE is punitive or burdensome. By supporting firms with compliance, they can embrace empowerment as a meaningful investment in South Africa’s long-term economic stability. This is a sound strategy that recognises that a transformed South African economy is one in which their investments are safe and guaranteed. Just as our economy has evolved since our B-BBEE laws were first conceptualised, so has the playing field. The emergence of new industries, whether it is digital technology, advanced manufacturing, AI or renewable energy, means South Africa must actively position itself to attract greater foreign and domestic investment in these sectors or risk being left behind. As a country we have had to adapt and evolve in response to these economic trends, and continue to do so. We are clear that our empowerment laws remain central to our goal of economic transformation in South Africa and are here to stay. Our focus going forward must remain creating an enabling policy environment, driving key structural reforms, supporting innovation and reducing regulatory barriers to harness the potential of emerging industries and support existing ones. Beyond the spirited and often heated debates currently under way around B-BBEE and the EEIP, the pursuit of inclusive economic growth that creates jobs and improves people’s lives remains our overriding goal. ‘Disclaimer - The views and opinions expressed in this article are those of the author(s) and not necessarily those of the BEE CHAMBER’. https://techcentral.co.za/ramaphosa-defends-equity-alternatives-bee/265977/