Search Results

Ciaran Ryan | 14 July 2025 Business organisations say government’s new race and gender targets are procedurally flawed and unconstitutional. Sakeliga and the National Employers Association of SA (Neasa) filed an urgent Gauteng High Court application this week challenging race and gender targets under the Employment Equity Amendment Act (EEAA), which became law in January 2025. The act sets hiring quotas for 18 economic sectors, from agriculture and mining to transport and construction. “The application challenges the legality and constitutionality of the newly introduced employment equity framework, which introduces rigid race and gender quotas across 18 economic sectors on the top four occupational levels,” according to a statement by the business organisations. These quotas, formally published in April 2025, require employers with 50 or more employees to restructure their entire workforce to reflect the national gender and racial demographics of the country, or face dire consequences. The EEA defines ‘designated groups’ as blacks, women and people with disabilities, and is intended to increase their representation in the workplace. The challenge involves two steps: The first asks the court for a judicial review of the “procedurally flawed” manner in which the minister went about setting the quotas; and The second part, yet to be launched, attacks the constitutionality of the quotas under the relevant parts of the EEA. Neasa and Sakeliga argue that Minister of Employment and Labour Nomakhosazana Meth skirted the Promotion of Administrative Justice Act (Paja) by not applying the relevant sections of the EEA in arriving at the race quotas. The policing of the act and its associated regulations will require 10 000 labour inspectors by the Department of Employment and Labour. The act has received pushback from business, the DA and trade union Solidarity. “When the legislation was passed, we informed the government that we would bring an urgent application to set it aside as they had not done proper consultation, as required by law,” says Gerhard Papenfus, chief executive of Neasa. “They then started consulting, but with whom? “They chose 18 industries. The act says you must first determine what these industries are. You can’t just decide this on your own,” he says. “On top of that, the consultations took place over seven days. They scheduled for each and every consultation for one and a half hours, allowing just 15 minutes for questions. That’s not consultation.” Neasa also criticises the way industries were demarcated. For example, manufacturing – including steel, plastics, agro-processing, clothing and chemicals and other sub-sectors – was treated as a single industry. Substantive flaws The court papers highlight what appear to be substantive procedural flaws in the setting of race quotas. Failure to identify and gazette economic sectors : The identification of 18 national economic sectors for purposes of setting quotas was not carried out as required under the EEA, which meant there were no sectors existing in law with whom the minister could consult. It further resulted in different sub-sectors with different characteristics being lumped together under a one-size-fits-all quota. Improper consultation : Inadequate notice was given for online consultations and these were limited to 1 000 attendees, with just 15 minutes allocated to questions. The minister neglected to consult with employees in the economic sectors who will be severely affected by the quotas. No lawful publication : The two business organisations say the final 2025 quotas differ radically from the earlier draft quotas published in 2023 and 2024, and were never published for renewed public comment as required under the act. This is a legal requirement and failure to adhere to it renders the quotas invalid. Quotas are arbitrary : The minister set irrational and arbitrary quotas that do not take into account the nature, circumstances and challenges of each sector. No consideration was given to the pool of skills available in each sector, the natural gender disparity in certain sectors, or the difference in racial demographics across provinces in SA. No socio-economic impact assessment performed : The regulations are ultimately aimed at compelling the workforce of every single designated employer in SA, in every sector, on every occupational level, to conform to the racial and gender demographic profile of the country’s economically active population. This cannot be rationally introduced as a legal requirement without a proper assessment of its socio-economic impacts. Violation of The Constitution : The quotas disregard South Africa’s constitutional stipulations on non-racialism, equality before the law, and administrative justice. Businesses will be forced to spend vast amounts of time and resources complying with these employment equity quotas, say Neasa and Sakeliga in a statement. “Individuals will be employed or not employed, and promoted or not promoted, based on unlawful quotas. Employers will restructure and make other permanent changes to their workforce and corporate structuring, employ new employees and forego opportunities and take on the expense that this involves, all based on unlawful quotas. “This [court] filing marks the next important step in preventing these impossible, irrational, and harmful employment quotas for the benefit of employers, employees, and all communities across the country.” Papenfus was part of a delegation of Afrikaner leaders to visit the US White House in June, during which the US administration set out a number of preconditions for normalising relations with SA, including exempting US businesses from BEE requirements , classifying farm attacks as a priority crime, no land expropriation without compensation and an unequivocal condemnation by the ANC of the ‘Kill the boer, kill the farmer’ slogan. Law firm Norton Rose Fulbright has filed a separate court challenge to the Legal Sector Code – which sets firm-level targets of 50% black ownership, voting rights and executive management positions within five years – arguing that these targets are unrealistic given that blacks made up just 38% of the profession in 2023. It argues that the introduction of the code was arbitrary, unlawful and procedurally flawed. ‘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.writersroom.co.za/urgent-court-action-aims-to-halt-employment-equity-quotas/

Ed Stoddard | 18 August 2025 The mining industry is arming itself with facts before what may be a long slog as it pushes for changes in the draft Mineral Resources Development Bill. South Africa’s mining sector is digging in for lengthy talks with the Department of Mineral Resources and Energy over the contentious draft Mineral Resources Development Bill (MRDP). The Minerals Council SA, the main umbrella group for the industry, maintains that the bill has many shortcomings that will discourage investment and job creation. The council lodged an extensive submission on the draft bill before the 13 August 2025 deadline. “It is of fundamental importance for the Minerals Council that the bill creates certainty, predictability and a competitive regulatory environment, while eliminating ambiguity in what will become the act to ensure we build on the successes we have had to date,” the council said in a statement on Monday, 18 August 2025.  At a media briefing, Mzila Mthenjane, the CEO of the Minerals Council, said the industry would be engaging with the department on the bill in what was expected to be a marathon rather than a sprint. “We will not negotiate the bill in public… It will take time. It will be a lengthy process,” he said. “We will take it one step at a time, but from the progress we have seen so far in submitting our detailed submission I think there’s a possibility that we can avoid seeing ourselves in court.” Not negotiating in public means that the council is keeping its specific concerns under wraps for now, though when the bill was first flagged in May it did raise alarms over the failure to exclude BEE requirements for exploration. That has since been amended.  “The Minerals Council’s overarching concern with the bill is that in its current form it does not encourage investment in the industry for growth. Its reliance on regulations that have yet to be published for public scrutiny make it impossible to fully engage the department in detail on key elements of the bill,” the council said.  Like a miner without a headlamp, this means that the industry is groping in the dark.  What this means for the industry Regulatory clarity is crucial for investment in the mining sector. Without investment, there is no mining and no transformation in the sector. A lengthy engagement where both sides display compromise would be the best outcome. Otherwise it will probably end up in court — and the regulator usually loses on that front. In a presentation, the council said key areas of broad focus and contention included transformation and empowerment — subjects that have long been bones of contention in post-apartheid South Africa.  On that front, the Minerals Council produced a new factsheet to burnish its transformation credentials. Historically disadvantaged South Africans now have a 39% ownership stake in the mining sector, far above the 26% target. Much of this stems from pension funds.  “In 2023, a study on employment equity and human resource development showed women now make up 19% of the full-time workforce, with ongoing efforts to improve representation and safety,” the factsheet reads.  “Through Social and Labour Plans (SLPs), the mining sector invests more than R3-billion annually in community development — far exceeding the 1% Net Profit After Tax benchmark in other sectors — funding schools, roads, clinics, water and sanitation projects, and much more.”  In the presentation, one chart showed that monthly per capita earnings for miners have soared about six-fold the past 20 years to more than R30,000.  The industry is arming itself with facts before what may be a long slog. ‘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.dailymaverick.co.za/article/2025-08-18-sa-mining-sector-burnishes-transformation-credentials-as-battle-looms-over-draft-bill/?dm_source=dm_block_grid&dm_medium=card_link&dm_campaign=business-maverick

Dr Anthea Jeffery | 18 June 2025 Explore the Controversial 2025 Mining Bill, threatening investment The Mineral Resources Development Bill of 2025 has been roundly rejected by most commentators on the struggling mining industry. Mining analyst Peter Major says the bill lacks even “one redeeming feature to attract any investment, local or foreign”. Mining lawyer Lili Nupen of NSDV LAW Inc warns that the bill, if enacted in its current form, will effectively put an end to the industry because large mining companies will divest and junior miners will find it harder still to raise capital.  The bill was gazetted on 20 May 2025 for public comment by 13 August 2025. Though bad drafting often makes it hard to understand, its wording is nevertheless clear enough to make the mining industry even more “uninvestable”. A host of valid and telling criticisms of the draft law have thus already been raised. However, these comments fail to acknowledge just how destructive the bill’s provisions on black economic empowerment (BEE) could be – especially when combined with a largely overlooked definition of “expropriation” in the new Expropriation Act of 2024. Stricter BEE obligations for mining rights Though the bill seeks numerous amendments, this analysis focuses on four key changes to BEE requirements for mining rights. First, empowerment obligations are to be more closely aligned with those contained in the Broad-Based Black Economic Empowerment Act of 2003 (the BEE Act). Second, the mining minister will be required to “impose” relevant BEE requirements in granting applications for new mining rights. Third, the minister will be empowered to “repeal or amend” the empowerment obligations resting on companies with existing mining rights. Fourth, the minister will have the power to make new empowerment rules by regulation. A shift to “black persons” and the BEE Act The existing law – the Mineral and Petroleum Resources Development Act (MPRDA) – aims its empowerment benefits at “historically disadvantaged South Africans” or HDSAs, whereas the Bill requires a shift to “black persons”, as defined in the BEE Act. It also defines broad-based economic empowerment as “having the meaning assigned to it” in the BEE Act. In keeping with this change, the draft law goes on to delete the Act’s current definition of HDSAs. Confusingly, however, it nevertheless retains a reference to HDSAs in an unchanged sub-section 100(2) of the MPRDA. This provision requires the minister, within “six months” of the Act’s taking effect, to “develop a broad-based socio-economic empowerment Charter” providing for the “active participation of historically disadvantaged South Africans” in the mining industry and allowing them to “benefit” from it. The bill does not say whether HDSAs are in future to be equated with “black persons”. Nor does it clarify what its changes might mean for existing HSDA ownership deals that might include white women. This creates uncertainty. However, this problem is far outweighed by the other BEE provisions in the draft legislation. “Imposing” BEE obligations on applicants for mining rights The bill seeks to insert a new sub-section 100(3), under which the mining minister “must”, in granting applications for mining rights, “impose” the “broad-based socio-economic empowerment prescribed elements of [BEE] ownership, inclusive procurement, supplier and enterprise development, human resources development, employment equity and mining community development”. These BEE elements generally echo those contained in the mining charter gazetted in September 2018. Will the law thereby empower the mining minister to demand compliance with all the key clauses of the 2018 charter from companies seeking new mining rights? This is doubtful, for three reasons. First, some clauses in the 2018 charter were struck down by the Pretoria high court in September 2021, after the Minerals Council South Africa had challenged their validity. One such clause required 30% HDSA ownership on the transfer or renewal of existing mining rights. Another demanded compliance with extraordinarily onerous preferential procurement rules. A third required 100% compliance with HDSA ownership obligations, failing which companies could have their mining rights suspended or cancelled under the MPRDA. These three clauses are invalid and cannot be restored by the bill’s becoming law. Second, the 2021 high court judgment made it clear that the mining minister has no law-making power under the MPRDA. The 2018 Charter is thus a mere “instrument of policy” and has no binding legal force. This will remain the case after the bill is enacted. Third, a different Pretoria high court judgment – one handed down in April 2018 – casts doubt on the validity of both the 2010 and 2018 mining charters. The wording of sub-section100(2) of the MPRDA is crucial here, for it empowers the minister to develop  a  socio-economic empowerment charter  within six months  of the Act’s coming into operation. Since the MPRDA took effect on 1 May 2004, the single charter it envisaged had to be developed before 31 October 2004. Any charter developed thereafter is clearly  ultra vires  (beyond the powers) given to the minister. This second judgment also prevents the minister from overriding a key clause in the 2004 charter. This clause requires that the “continuing consequences of all previous deals” be taken into account, even after HDSA investors have exited. This bars the minister from demanding “top-up” ownership deals by mining companies which have previously met the 26% ownership requirement. One of the main purposes of the bill is to circumvent these two judgments and give the minister the law-making powers he currently lacks. This is also what mining officials have long wanted to achieve. In November 2021, two months after the September 2021 ruling, some of these officials told the relevant parliamentary portfolio committee that no appeal would be lodged against the judgment so as to avoid any risk of becoming “bogged down in the courts”. Instead, the MPRDA would be amended to “incorporate the transformation objectives the judgment had overturned” and make “compliance obligatory”. Empowering the minister to “repeal or amend” an empowerment charter In keeping with this aim, the draft law introduces a new sub-section 100(4) which gives the minister the power, “as and when the need arises”, to “amend or repeal…the broad-based socio-economic empowerment prescribed elements of [BEE] ownership, inclusive procurement, supplier and enterprise development” and the like, as earlier listed. Once the bill is enacted, the minister could use these powers to “amend” the 2004 charter (the only one that is undoubtedly valid) by repealing its present clauses and inserting instead, say, all the clauses in the 2018 mining charter. This would restore the clauses struck down in 2021. It would also end the “continuing consequences” principle and require all mining companies to do top-up deals when black investors sell out. The minister could also go beyond the 2018 rules and include higher targets for BEE ownership (and other elements) in his amendments, as outlined below. Adding new empowerment targets by regulation The bill also gives the minister additional regulatory powers on empowerment. Under a new subsection 107(1)(jD), the minister will be able, by notice in the  Gazette , to make regulations “regarding…the promotion of transformative elements of BEE ownership, inclusive procurement, supplier and enterprise development” and the like (again, as earlier listed). Such regulations could again either mirror the rules in the 2018 charter or introduce higher BEE ownership (and other) targets. What higher BEE ownership targets might the minister introduce? The 2018 charter sets a 30% ownership requirement for new mining rights, but generally retains a 26% target for companies with existing mining rights. However, the ANC has long wanted a 51% ownership target for the mining industry – and may well see this legislation as the vehicle to achieve this. The 51% ownership goal for all mines was evident back in 2002, when an early version of the mining charter was leaked to the media. The news caused a stock market panic, in which the value of mining shares fell by some R55bn and the ANC was compelled to draw back. By contrast, little attention has been paid to a May 2025 draft BEE sector code for the transport sector, which proposes a 51% BEE ownership target for companies needing permits from the government or wanting to enter into procurement contracts with the state. Under this draft code, a 51% BEE ownership requirement could be imposed for procurement contracts with Transnet aimed at restoring parts of the crumbling rail network. This could significantly erode private-sector willingness to partner with the parastatal in this way – even though private sector expertise and financial resources are urgently needed to return rail tonnages to earlier norms, boost exports, and increase economic growth. The proposed 51% BEE ownership target in the draft sector code has nevertheless passed largely unremarked. The relative silence here could encourage the ANC to use the Bill to enforce a 51% BEE ownership target in the mining sector too. The potential impact of the Expropriation Act Until now, many mining companies have largely shouldered the costs of the 26% BEE ownership requirement. However, if the Bill in time ushers in a 51% BEE ownership requirement for all mining rights, the costs would be enormous. They would be yet more unaffordable if the “continuing consequences” principle was repealed and top-up deals were demanded whenever black investors exited (as the draft transport sector code in fact envisages there). In this situation, mining companies might want to claim compensation for compulsory ownership deals that amount to regulatory or indirect expropriations – and would merit compensation under virtually all bilateral investment treaties (BITs) and other investment agreements. A regulatory expropriation takes place when the state’s rules deprive owners of many of the usual powers and benefits of ownership without fully stripping them of title. Most BITs see such interventions as having effects “equivalent” to direct expropriations, in which ownership passes to the state itself. Most BITs thus require the payment of compensation for both direct and indirect expropriations. In South Africa, however, the new Expropriation Act of 2024 – already signed into law but not yet operative – is intended to preclude compensation for indirect expropriations. This is to be done under a new definition of expropriation which confines the meaning of the term to expropriations of the direct kind. According to the Act, expropriation means the “compulsory acquisition” of property by the state. A compulsory 51% BEE ownership deal will not satisfy this definition because the relevant shareholding will be transferred – probably at a steeply discounted price and with the help of vendor financing that may not be repaid – to politically connected ANC cadres, rather than the state or its mining company. There will therefore be no acquisition of ownership by the state and hence no expropriation within the meaning of the Expropriation Act. Also important here are constitutional provisions requiring compensation for “expropriation” but not for other “deprivations”. The combined effect is that mining companies are likely to be denied any compensation for compulsory 51% ownership deals, regardless of the magnitude of their resulting financial losses. An adverse precedent has also already been set. In 2004, when the MPRDA came into effect, it vested all mineral resources in the “custodianship” of the state. Though two thirds of these resources had previously been privately owned, no compensation was paid for the loss of these valuable assets. This was primarily because of a flawed judgment of the Constitutional Court, in the  Agri SA  case in 2013, in which Chief Justice Mogoeng Mogoeng ruled that expropriation requires the acquisition of ownership by the state. Since the “assumption of custodianship” was different from this, no expropriation had taken place and no compensation was due. The ANC has long wanted to turn this flawed judgment – based on the particular facts of a particular case – into a general principle of law. The Expropriation Act is intended to achieve this. Once the Act with its narrow definition of expropriation has been brought into force, the ANC may be inclined to push ahead with new rules requiring 51% BEE ownership deals in mining, transport, and elsewhere. In the mining sector, the bill will provide the mechanism to achieve this aim. What, then, is to be done? Faced with the prospect of what amounts to expropriation without compensation, many mining companies may look for legal weaknesses in the ANC’s likely arguments. Such weaknesses can be found in the doctrine of the separation of powers, for example, which gives law-making powers to Parliament and not to the executive. They can also be found in the many errors in the  Agri SA  judgment, as well as the doubtful constitutional validity of both the expropriation definition and the entire Expropriation Act. To help win any legal battle, the mining industry needs also to speak out strongly against the harm that the MPRDA has already done and the bill will greatly worsen. True transformation requires vastly increased investment, very much faster economic growth and an upsurge in jobs for the 12 million South Africans now unemployed. That in turn demands cast iron protection for property rights as the minimum foundation for economic expansion and rising prosperity. BEE in mining has greatly enriched a small elite, but badly hurt the great majority of South Africans. The BEE elements in the Bill should at minimum be scrapped. So too should the entire BEE policy, which needs to be replaced by a non-racial alternative along the lines of the IRR’s Economic Empowerment for the Disadvantaged (EED) idea. In the mining sector, companies would then earn voluntary EED points for all investments made, all jobs provided, all taxes paid, and all additions made to export earnings, skills and innovation. These are the most important contributions that business can make to growing the economy and creating jobs, so that millions more South Africans can climb the ladder to cherished middle-class status. An EED system would also reach right down to the grassroots by providing the poor (identified by income, not race) with tax-funded vouchers for the competitive schooling, housing and healthcare of their choice. Little could be more effective in truly empowering the great majority – or in breaking the ANC’s stranglehold on a struggling mining industry and beleaguered economy. ‘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.biznews.com/thought-leaders/mining-bill-concerns-expanded-bee-mandates

Andile Ntingi | 23 January 2023 It remains to be seen whether it is too early to start writing the obituary of BEE, says the writer. Picture: 123RF If staunch supporters of BEE policy have not yet hit the panic button over the legal and regulatory setbacks suffered by the policy, they had better do so now. There is a concerted pushback under way against BEE, not just to roll it back but to end it. Resistance to BEE is gaining momentum despite the failure of the policy to alter the ownership patterns of the SA economy, which is still overwhelmingly dominated by white-owned businesses, foreign multinationals and state-owned enterprises (SOEs) nearly 30 years after the end of apartheid. In response to calls for BEE to be scrapped or drastically amended, which grew louder in November, President Cyril Ramaphosa defended the policy, arguing that the fate of black people cannot be left to the markets and that a policy intervention such as BEE is still needed to bring black people into the mainstream economy. While Ramaphosa did his best to allay fears over the policy being abandoned, there is no denying that BEE is losing credibility in the eyes of many South Africans because of its unintended consequences and its failure to uplift the majority of intended beneficiaries. The pushback against BEE happens at a time when there is a rise of organised extortion groups that are demanding to be given contracts or paid bribes in various sectors of the economy, including mining, construction and transport, under the guise of enforcing BEE compliance in those industries. These extortionist groups, which in some instances use violence and threats to achieve their goals, are a clear impediment to economic activity and attracting investment, risking SA’s economic prosperity. First setback The first major setback BEE suffered was in 2018 when the high court in Pretoria ruled in favour of the Chamber of Mines and against the department of mineral resources & energy in a matter concerning the “once empowered, always empowered” principle. The chamber, which is now called the Minerals Council SA, was seeking a declaratory order to have the “once empowered, always empowered” principle adopted as law ahead of the implementation of Mining Charter III, also known as the Broad-based Socio-economic Empowerment Charter for the Mining & Metals Industry. This court judgment in effect recognised the continuing consequences of previous BEE ownership transactions, implying that mining companies were not obliged to perpetually replace black investment partners in the event the original partners sold their shares. The ruling also meant mining companies could retain their black ownership status and mining licences after the exit of black shareholders. This court victory bolstered resistance to BEE in other heavily regulated sectors such as financial services, where there was a push for the adoption of the “once, empowered, always empowered” principle. There has been a dearth of major BEE deals since before the 2008 global economic crisis due to companies resisting having to redo BEE transactions. Second setback After BEE deals dried up as a source of wealth accumulation after the 2009 global economic crisis, prominent black people who could no longer lean on their political connections to acquire stakes in large, white-controlled companies had to find an alternative source of generating wealth. Their next target was procurement, where they took advantage of preferential procurement regulations to access lucrative government tenders. Many of these politically connected people became wealthy middlemen, selling goods to the state at huge markups, something that would have been impossible to achieve if these goods were purchased directly from the manufacturers or retailers. In 2017 the National Treasury introduced preferential procurement regulations that disqualified BEE-noncompliant suppliers from bidding for government tenders. This action resulted in business group Sakeliga launching a lawsuit to challenge the enforcement of the regulations on the basis that they were unlawful and did not promote “value for money” procurement of goods and services by the government. The litigation by Sakeliga resulted in BEE suffering its second major setback when the Constitutional Court ruled in favour of the business group in January last year. This judgment forced the National Treasury to gazette new procurement rules in November, which exempt government entities from being legally obliged to comply with BEE and local content regulations when purchasing goods or contracting service providers, if that noncompliance makes commercial sense. The biggest implication of this judgment is that local and black suppliers must compete on price and quality to access tenders. The ruling will also result in the state minimising wastage when procuring goods and services. In 2016, former chief procurement officer Kenneth Brown revealed that 40% of the government’s R600bn annual spending on goods and services was eaten up by fraud, which manifested in grossly inflated prices charged by suppliers. The new regulations came into effect on January 16. Recommendations But do these setbacks mean BEE is in its sunset or termination phase? There are people who believe the policy’s days are numbered, and I agree that it cannot carry on in its current form. It must be reformed to inculcate a culture of entrepreneurship in black communities and contribute to employment creation and economic growth. I believe the following interventions can make BEE more effective: There must be a concerted effort to position development finance institutions such as the National Empowerment Fund and Industrial Development Corporation to help black entrepreneurs acquire businesses in industries they have operational experience in. During the apartheid era an institution known as the Bantu Investment Corporation funded the acquisition and transfer of white-owned businesses to black entrepreneurs. The government must consider introducing tender set-asides that ring fence at least 20%-30% of the procurement of goods and services to be sourced from black suppliers that are the primary producers of those goods and services. Tender set-asides have been successfully implemented in Malaysia and the US. In the US set-asides are used to empower ethnic minorities such as African Americans, indigenous tribes and Hispanics, while in Malaysia set-asides are used to benefit the Bumiputeras (ethnic Malays), who make up 67.4% of that country’s population. Like SA, the US economy is dominated by white capitalists, while the Malaysian economy is largely controlled by ethnic Chinese. African American scholar Bessie House-Soremekun concluded in a research paper that entrepreneurs who benefited from set-asides in the US were more successful than those who didn’t. The private sector must embrace the elements of BEE that encourage the development of skills and small businesses. Key pillars of BEE such as skills development, and enterprise and supplier development must be retained in an amended BEE policy. The enterprise and supplier development element, which encourages large corporates to fund black businesses or procure from 51% black-owned companies with revenues not exceeding R50m, is critical in developing small, medium and micro enterprises. As a country we cannot do away with it. It remains to be seen whether it is too early to start writing the obituary of BEE. Will those seeking to kill the policy prevail over those defending it, or can it be successfully reformed? One thing is clear to me: BEE cannot survive in its current form. • Ntingi is the founder of GetBiz. ‘Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER’. https://www.businesslive.co.za/bd/opinion/2023-01-23-andile-ntingi-is-bee-here-to-stay-or-is-it-facing-its-demise/

Phryne Williams | 6 May 2024 It has been a year since President Cyril Ramaphosa signed the Employment Equity Amendment Act into law which has empowered Thulas Nxesi, the Minister of Employment and Labour to update thresholds for employment equity for each of the country’s national economic sectors. The minister republished these five-year targets on February 1, giving 90 days for interested parties to make submissions by May 2, 2024. The broad aim of the amendment is enhanced focus on moving towards improved demographic representation in top and senior management, as well as in professionally qualified and skilled levels. The targets will apply to all South African companies with 50 or more employees. The proposed Black Economic Equity (BEE) targets for financial services businesses include that 46% of top management comprised of employees from the three newly defined designated groups with a split of 26% males and 20% female. At senior management level the target is a total of 48% from designated groups with an equal gender split of 24%. In the professionally qualified band, the proposed target is 64% of employees from designated groups, of which 30% must be male and 34% female. At the skilled and technical level, 88.2% of employees must be representative of the designated groups; 47.4% male and 40.8% female. Across the board, the goal is to have 2% of the national workforce represented by people with disabilities, and in this regard, there is no gender split. Alongside the recent memorandum of understanding signed between the Financial Sector Conduct Authority (FSCA) and the Broad-Based Black Economic Empowerment Commission (B-BBEE Commission), the sector is coming under increasing pressure in its commitments to diversity, equity, and inclusion (DEI). While the numbers may be tweaked following submissions, the proposed targets are a fair indication of the alignment that banks, insurers, asset managers and others will need to focus on when it comes to hiring, retention and succession planning over the next five years. We expect these regulatory forces to shape recruitment processes and motivate more strategic approaches to attracting talent in a market encumbered by skills shortages. In the intensified search for top-level BEE talent, retained executive search will come to the fore, and progressive tools such as market and talent mapping will support firms in connecting and building relationships with key next generation talent. We must keep in mind that while new regulations bring demands, there are distinct advantages for companies improving their BEE scorecards. Greater diversity at management level set in a constructive, inclusive culture has been shown to improve decision-making, boost innovation and financial performance. In essence, the BEE targets can be viewed as drivers of DEI that will help South African financial services companies become future fit in a fast-changing world. The new working relationship between FSCA and the B-BBEE Commission, announced March 5, 2024, aims to address concerns around the submissions of B-BBEE compliance reports by the financial sector and the gaps that exist in the collection of the industry’s B-BBEE data. Both parties have highlighted the critical roles that the financial sector in particular plays in economic development and empowerment, enterprise development and poverty reduction. In addition, the finalisation of the Conduct of Financial Institutions (COFI) Bill is pending, and this will bestow greater powers on the FSCA when it comes to transformation. We can’t lose sight of the fact that our financial sector has made important gains when it comes to DEI. A 2022 Deloitte’s Global Report on advancing gender praised South Africa’s financial service industry for its progress in working towards gender parity, especially in next generation and senior leadership roles. The latest Alexforbes 2023 Manager Watch Survey of Retirement Funds Investment Managers noted a dramatic increase in the number of strategies driven by BEE mandates. It’s going to be critical over the next five years to escalate successes like these. As new regulations come into force, there needs to be a sharper focus on executive search and other more strategic approaches to identifying, engaging with, retaining and developing key financial services talent, especially those fit for top and senior management levels. ‘Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER’. https://www.iol.co.za/business-report/economy/sa-financial-sector-transformation-in-the-spotlight-eb724ead-1a73-4bd6-878f-df3f975beac3

Gugu Lourie | 18 August 2025 Elon Musk’s SpaceX’s satellite internet venture, Starlink, has formally endorsed South Africa’s proposed Broad-Based Black Economic Empowerment (B-BBEE) policy reforms, advocating for Equity Equivalent Investment Programmes (EEIPs) as an alternative to the mandatory 30% black ownership requirement for telecom license holders. In an exclusive written response obtained by TechFinancials, Ryan Goodnight, Senior Director of Starlink Market Access, stated: “SpaceX commends the Department for this timely policy direction and welcomes the opportunity to discuss our response with the Department at your earliest convenience.” The statement follows SpaceX’s submission to the Independent Communications Authority of South Africa (ICASA) regarding its Proposed Policy Direction on B-BBEE alignment in the ICT sector, published on 23 May 2025. The policy seeks to harmonise ICASA’s Ownership Regulations with the ICT Sector Code, which permits EEIPs, a model that allows foreign companies to contribute to economic transformation without relinquishing direct equity. Why Starlink supports Equity Equivalents over 30% ownership 1. Regulatory clarity and foreign investment Starlink argues that misalignment between ICASA’s regulations and the ICT Sector Code creates uncertainty for investors. Currently, ICASA requires telecom license applicants to: Be South African-registered entities (SA Requirement). Achieve at least Level 4 B-BBEE contributor status (BBBEE Requirement). Have 30% equity owned by historically disadvantaged individuals (Ownership Requirement). However, the ICT Sector Code, governed by the B-BBEE Act, recognises EEIPs as an alternative for multinational corporations that cannot transfer ownership. Goodnight emphasized: “Harmonising the regulations with the ICT Sector Code will provide clarity regardingthe obligations that apply to both emerging market participants and existing operators. “This harmonization encompasses the acknowledgment of equity equivalent investment programmes, which play a vital role in incentivising investment in South Africa by international operators, while also recognising transactions and structures that have shown success under the ICT Sector Code.” The company added that for clarity – SpaceX supports (and does not seek any amendments to) the South Africa requirement or the BBBEE requirement. 2. Global precedent for Equity Equivalents EEIPs are not new in South Africa. Major firms like Microsoft, Google, and Cisco have previously used this model to comply with B-BBEE without diluting ownership. These programmes typically fund: Skills development (training, scholarships). Enterprise growth (supporting black-owned SMEs). Digital inclusion initiatives (low-cost internet access). Starlink contends that this approach is more practical for global operators, as forcing foreign firms to sell 30% equity could deter investment in critical broadband infrastructure. “The Policy Direction appropriately directs ICASA to urgently consider alignment of its Ownership Regulations with the ICT Sector Code,” Goodnight contends in a written response. “This alignment is both legally required and practically necessary to achieve South Africa’s broadband and empowerment objectives. “This alignment, and in particular the recognition of equity equivalent investment programmes, will provide much-needed regulatory certainty and foster investment in infrastructure essential for bridging the digital divide. “This approach is consistent with the global nature of multinational corporations’ operations and provides an avenue for alternative ways to impact South Africa’s socio-economic development.” 3. Economic Benefits of Broadband Expansion The policy direction cites World Bank research showing that a 10% increase in broadband penetration correlates with a 1.21% GDP growth in middle-income countries like South Africa. Despite this, South Africa ranks: 52nd globally for mobile internet speeds. 100th for fixed broadband speeds. Starlink’s low-orbit satellite technology could help close this gap, particularly in rural and underserved areas, where traditional ISPs struggle to deploy infrastructure. Legal and political controversy EFF opposition and sovereignty concerns The Economic Freedom Fighters (EFF) have vowed to challenge the policy in court, arguing that exemptions for Starlink undermine B-BBEE’s transformative goals. In a statement issued in May, the EFF said: “Granting special exemptions to billionaires like Elon Musk compromises South Africa’s sovereignty and economic empowerment agenda.” Legal basis for Equity Equivalents Starlink’s submission highlights that: The Electronic Communications Act (ECA) allows ICASA to impose alternative empowerment mechanisms (Section 9(2)(b)). The B-BBEE Act (Section 10) mandates that sector codes (like the ICT Sector Code) take precedence over conflicting regulations. ICASA’s strict 30% rule may contravene these laws by ignoring EEIPs. What This Means for South Africa’s Digital Future 1. Faster Internet Rollout If approved, the policy could accelerate Starlink’s entry into South Africa, providing: Affordable satellite broadband in remote regions. Competition to dominant ISPs like MTN, Vodacom, and Telkom. Could allow other satellite operators across the world to set up shop in South Africa. 2. Balancing Empowerment and Investment The debate reflects a broader tension in South Africa’s policy: Strict ownership rules may deter foreign investors. Flexible EEIPs could attract capital while still advancing B-BBEE goals. 3. Potential for Legal Challenges If ICASA adopts the policy, the EFF or other groups may seek judicial review, arguing that it weakens transformation efforts. Starlink’s push for regulatory alignment emphasises the challenges of balancing economic empowerment with foreign investment. The proposed policy direction could: Unlock billions in broadband investment. Expand internet access to underserved communities. Set a precedent for how South Africa regulates global tech firms. As the government finalises its decision, the outcome will shape not just Starlink’s future in South Africa—but the entire digital transformation of the country. All rules have their exceptions — in other words, it is the exception that proves the rule. This basic principle explains why SA’s rigid insistence on enforcing BEE compliance for Starlink amounts to economic self-sabotage. While Elon Musk’s dismissal of BEE as racial bias is misguided, the government’s refusal to grant operational flexibility to a transformative digital provider ignores SA’s deepening crisis, which includes stagnant GDP growth, mass unemployment and more than half of the population living in poverty. ‘Disclaimer - The views and opinions expressed in this article are those of the author(s) and not necessarily those of the BEE CHAMBER’. https://techfinancials.co.za/2025/08/18/elon-musks-starlink-backs-bee-equity-equivalents-not-30-ownership/

Staff Writer | 4 September 2024 Business group Sakeliga has claimed victory in one of three major issues facing property practitioners in South Africa, reporting that the Property Practitioners Regulatory Authority (PPRA) has reversed a decision to enforce high-level BEE requirements. The group said that the PPRA had written to industry body Rebosa walking back on a change communicated since April. The issue relates to a new policy that  came into effect in April 2024 , where Fidelity Fund Certificates (FFCs)—required for property practitioners to operate—would be denied if applicants did not meet BEE requirements. The need for a BEE certificate has been part of the Property Practitioners Act since it was enacted in 2022; however, until April 2024, FFCs were issued based on the requirement of having a BEE certificate, not necessarily being BEE compliant. In April, the PPSA reminded practitioners that BEE compliance was required and that FFCs would not be issued unless they met the “accepted level of compliance” of 40 points or more (BEE Level 8). “You will not be issued a BEE certificate if you score below 40 (making your BEE certificate non-compliant),” it said at the time. The PPRA described the policy as “non-negotiable”. “It is imperative to underscore that compliance with regulations such as those set forth by the PPSA is non-negotiable,” it said. Now, Sakeliga said, the PPRA has received legal advice that the initial interpretation may be correct. “The letter relayed that the PPRA had sought legal advice and would no longer be requiring level 8 B-BBEE certificates with new FFC applications. “Its counsel had confirmed what our legal team had spelt out in letters of demand to the PPRA: that the Act’s reference in section 50(a)(x) to a valid BEE certificate cannot be construed to mean a certificate of BEE compliance – not at level 8 nor at any other level,” Sakeliga said. The group noted that the PPRA has not a public statement about the policy shifts, which could fuel confusion. Before the apparent turn, property practitioners who failed to renew their FFCs by the specified deadline of 31 October of the relevant year, while still actively practising, faced penalties. The apparent shift in policy was met with immediate backlash by the sector, with property groups raising concern over the impact on small businesses, sole proprietorships, and “one-man” or “mom-and-pop” operations. While industry bodies like the Real Estate Business Owners of South Africa (Rebosa) opted to consult with the PPRA over the policy, others, like Sakeliga, pursued the legal route. Sakeliga said that, even though the most urgent aspect of the regulations has been walked back “for now”, two other problems remain: First, there is the Act’s requirement that not only estate agents, but all property practitioners must have a fidelity fund certificate. The group said this should be reversed as it gives the PPRA reach over thousands of businesses. Second, the Act still stipulates that fidelity fund certificates may only be issued to applicants with a valid B-BBEE certificate. “At least for now, the PPRA is reverting back to accepting that ‘valid’ cannot be taken to mean ‘compliant’ with B-BBEE, yet the certification demand is itself an unjustified, costly, and harmful infringement on the freedom to do business and serve society. “The certificate requirement serves no legitimate government purpose, since there is no relationship between fulfilling the inherent requirements for a fidelity fund certificate and having a B-BBEE certificate or not,” the group said. PPRA responds The PPRA is registering and issuing FFCs to all sectors of the property industry within its regulatory scope, and the BEE certificate required from all property practitioners when applying for an FFC is required to be valid but not necessarily compliant in terms of the applicable legislation. “In order to give effect to our transformation mandate, the PPRA will launch compliance programmes in terms of section 20(1) and 20(3) of the Property Practitioners Act,” it said. The group said that there is “no policy to withdraw” or put on hold, as it were, given that it has not yet taken an official stance on how to interpret legislation. “The interpretation of the use of the word “valid” and whether it should be interpreted in the narrow sense of ‘properly issued’ or in the wider sense of ‘compliant’, is the legal question which is being addressed and which will found the PPRA’s policy on implementing section 50(a)(x),” it said. However, this does contradict the communication to Rebosa in April, where the group specified the level 8 BEE compliance was necessary for certificates to be issued. The PPRA confirmed that no certificates have been denied so far on the basis of this requirement. ‘Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER’. https://businesstech.co.za/news/property/789518/big-turn-for-bee-in-south-africas-property-sector/?utm_source=everlytic&utm_medium=newsletter&utm_campaign=businesstech

Government Communications | 21 October Government reaffirms that Broad-Based Black Economic Empowerment (B-BBEE) remains a key policy instrument of the State. The policy remains central to South Africa’s economic transformation and forms part of South Africa’s long-term strategy to redress historic injustices, broaden economic participation, and build a truly inclusive economy. The B-BBEE Act followed all the prescribed requirements from the drafting by the Department of Trade, Industry and Competition, through parliamentary procedures, public consultations, presidential assent, and publication. This Act is, therefore, a product of democratic processes. If any person requires a change of policy or law, then the appropriate channels and processes should be followed. As part of the Government of National Unity (GNU), all parties within this collective administration share a responsibility to advance policies that contribute to economic transformation and sustainable development. B-BBEE, therefore, is not prejudiced rather it is a constitutional and moral imperative rooted in South Africa’s commitment to equality, fairness, and redress the imbalances of the past. Despite the progress made over the past three decades, the disparities in ownership, management, and income distribution remain stark. The policy continues to serve as a mechanism through which government works to level the playing field, ensuring that the previously disadvantaged and discriminated South Africans, especially women, youth, and persons with disabilities are meaningfully included in the mainstream economy. Importantly, the ongoing refinement of empowerment policies is part of government’s effort to ensure that implementation is effective, transparent, and aligned with national development priorities. The success of any economy rests with wider inclusion and participation of the masses of the population. The Government remains steadfast in advancing an inclusive economy that works for all South Africans. The B-BBEE framework continues to be a central pillar in achieving this goal, addressing the inequalities of the past while unlocking the potential of every citizen to contribute to South Africa’s growth and prosperity. ‘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.gcis.gov.za/newsroom/media-releases/b-bbee-policy-critical-policy-government

Mpho Sibanyoni | 20th October 2025 An internal disciplinary hearing has found Gregory Wayne Adams, the chief executive of a government-owned sector education and training authority (Seta), guilty in relation to more than R1.2-billion in irregular expenditure. The verdict, delivered on Tuesday, comes after a marathon disciplinary process, which started when the Manufacturing, Engineering and Related Services Sector Education and Training Authority (merSeta) suspended Adams in 2022 after a forensic audit returned a raft of damning findings against him. According to the report, which Sunday World has seen, Adams was found guilty of charges two, three, four (count two) and seven. However, he was not guilty in relation to charges four (count one), five and six. The hearing, held at Afsa Chambers in Sandton, Johannesburg, was chaired by Adv Lindi Nkosi-Thomas. Charge two is related to the irregular increase in the Joint Education Trust’s (JET) discretionary grant. According to the hearing outcome document, charge two (count one) determined that between January and March/April 2019, Adams caused merSeta to conclude an addendum to the JET’s discretionary grant memorandum of agreement (MOA), thereby increasing the allocation amount from R 2 646 500 to R7 396 500. “At the time, the employee (Adams) ought to have been aware that the increase was not duly authorised in terms of merSeta’s applicable legal framework.” In relation to charge three, Adams was found to have failed to exercise adequate oversight regarding the conclusion of the JET discretionary grant. Adams allegedly caused various acting chief operating officers to irregularly conclude discretionary grant MOAs on behalf of merSeta in breach of the prevailing merSeta delegation of authority; as a result, merSeta incurred irregular expenditure of more than R1.2-billion. “The amount is inclusive of R40 362 638, which amount relates to counts two to six,” reads the document. The document further states that in March 2021 and March 2022, an employee concluded several discretionary grant MOAs without any delegated authority and without exercise of sufficient oversight. The document further alleges that a staff member concluded a discretionary grant MOA with several external companies without any delegated authority and absent the employee’s exercise of sufficient oversight to ensure that only duly authorised merSeta officials conclude the discretionary grant MOAs on behalf of merSeta. This action resulted in the state-owned entity incurring more than R40.5-million in irregular expenditure in total as a result of the MOAs. Adams is also accused of failing to declare a conflict of interest in regard to the JET transaction. Between July 2018 and March 2020, merSeta concluded various agreements to fund JET, an entity represented by an official who had a long-standing relationship with Adams from the employee’s previous employment. Adams was allegedly part of merSeta’s management that approved and concluded the JET agreements and failed to disclose his relationship with the JET official, which is in breach of the conditions of employment with merSeta. The disciplinary hearing outcomes document called upon Adams and merSeta to file their submissions in mitigation and/or aggravation of sanction with the chair by no later than close of business on October 20. ‘Disclaimer - The views and opinions expressed in this article are those of the author(s) and not necessarily those of the BEE CHAMBER’. https://sundayworld.co.za/news/merseta-ceo-found-guilty-of-causing-entity-to-incur-over-r1-2bn-in-irregular-expenditure/#goog_rewarded

Thabiso Goba | 20 October 2025 The bill is the party’s proposed policy to replace Broad-Based Black Economic Empowerment. The Democratic Alliance (DA) has proposed an economic empowerment bill that removes race as a determining factor, replacing it with a needs-based approach. The bill is the party’s proposed policy to replace Broad-Based Black Economic Empowerment (BBBEE). At a media briefing in Johannesburg on Monday, the party said BBBEE has only benefited a few politically connected individuals instead of a majority. The BEE Act was introduced in 2003 as a redress policy to deal with the racial economic inequalities caused by apartheid. Under apartheid, large parts of the economy remained in the hands of the white minority, while the black majority was excluded. DA federal chairperson, Ivan Meyer, said while this is true, affirmative action policies do not necessarily need to be race-based. “For example, if you apply for social grants, not on the basis of race, if you go and look who are the main beneficiaries - it’s black people. You don’t need to target black people, you need to target the need." “The majority of people getting support for students, look at the books, you don’t target the black colour of your screen, you target the need and by the very nature of people in SA being black, they are the main beneficiaries. It’s incorrect to say this will not empower them. They will be more empowered because BEE has a narrow focus.” The DA said it will be tabling the bill before Parliament soon. ‘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.ewn.co.za/2025/10/20/da-proposes-economic-empowerment-bill-that-removes-race-as-determining-factor

The Balanced Broad-Based Black Economic Empowerment (B-BBEE) Scorecard remains one of South Africa’s most critical levers for sustainable and inclusive economic transformation. More than a compliance tool, it represents a strategic framework that challenges corporate leaders to redefine value creation, not only in financial terms but through measurable social and economic impact.   Its impact is visible in the evolution of South Africa’s business landscape: an expanding base of Black-Owned enterprises, increasing opportunities for youth and women, and stronger linkages between big business and small suppliers. Yet, the Scorecard’s true success lies in how it influences leadership behaviour, driving accountability, ethical stewardship, and long-term investment in human capital.   For Transformation Leaders, the Balanced B-BBEE Scorecard is not merely a measurement of compliance. It is a strategic compass that guides organisations toward competitiveness through inclusivity, sustainability, and shared prosperity.   B-BBEE Strategy Services  are available for assistance with B-BBEE Strategies for Members.

An organisation may not claim the salary for an employee Bursar as part of its Bursary Programme. However, as per 2.1.1.2 of the Skills Development Scorecard under Statement 300  of the Amended General B-BBEE Codes of Good Practice , an organisation may claim a stipend for an unemployed Bursar.   2.1.1.2 refers: “Skills Development Expenditure on bursaries for ‘Black’ Students at Higher Education Institutions”.   Based on prior behaviour, this principle results in organisations giving preference to unemployed Bursaries through which they can claim a higher overall cost.   Members need to consider the return on investment as well as the B-BBEE points when developing their Bursary strategy and assess where Bursaries may fall into their Employee Value Proposition (EVP) and their Training Plan before being driven blindly by the B-BBEE points in isolation.   Skills Development Services  are available for assistance with Bursary Strategies for Members.