Chapter 14: Black economic empowerment

Question 1

Through its BEE policy, the government aims to achieve the following objectives:

Answer 1

• Empower more black people to own and manage enterprises. Enterprises are regarded as black-owned if 51% of the enterprise is owned by black people and black people have substantial management control of the business.
• Achieve a substantial change in the racial composition of ownership and management structures and in the skilled occupations of existing and new enterprises.
• Promote access to finance for black economic empowerment.
• Empower rural and local communities by enabling their access to economic activities, land, infrastructure, ownership and skills.
• Promote human resource development of black people through, for example, mentorships, learnerships and internships.
• Increase the extent to which communities, workers, co-operatives and other collective enterprises own and manage existing and new enterprises, and increase their access to economic activities, infrastructure and skills.
• Ensure that black-owned enterprises benefit from the government’s preferential procurement policies.
• Assist in the development of the operational and financial capacity of BEE enterprises, especially small, medium and micro enterprises (SMMEs) and black-owned enterprises.
• Increase the extent to which black women own and manage existing and new enterprises, and facilitate their access to economic activities, infrastructure and skills training.

Question 2

The Minister of Trade and Industry will establish this council to advise the President on BEE and to:

Answer 2

• Review progress in achieving BEE.
• Provide advice, in the light of experience, on new programmes and instruments to achieve the agreed objectives of BEE.
• Promote partnerships to enhance the implementation of BEE.
• Advise on sector and enterprise charters.
• Advise on codes of practice and guidelines.

Question 3

3. Preferential Procurement Policy Framework Act

Answer 3

This Act, passed in 2000 and subsequently amended, provides the policy framework for preferential procurement, as described in the Constitution of South Africa. The idea is to integrate BBBEE status into tender award decision-making, along with other factors such as price and quality.

Question 4

The FSC applies to any natural or juristic person conducting a business, trade or profession in the South African financial sector including, but not limited to, the following:

Answer 4

1. Banking
2. Long-term insurance
3. Short-term insurance
4. Re-insurance
5. Retirement fund administration
6. The management of collective investment scheme assets
7. Financial services intermediation and brokerage
8. Public entities involved in the financial sector, for example, DBSA, Land Bank
9. Asset management, consulting and administration
10. Private equity, venture capitalist and impact investors
11. Management of investments on behalf of the public, including, but not limited to, private equity, members of any exchange licensed to trade equities or financial instruments in South Africa and entities listed as part of the financial index of a licensed exchange
12. Underwriting management agents.

Question 5

5. Financial Sector Code

Answer 5

The Financial Sector Code (FSC) is based on a harmonisation of the Department of Trade and Industry Amended Codes of Good Practice (CoGP) and the Financial Sector Code published in the Government Gazette in terms of Section 9 (1) of the Act on 26 November 2012. The Financial Sector Charter (the Charter) came into effect in January 2004 as a result of a voluntary offer to develop an industry transformation Charter by the financial sector at the National Economic Development and Labour Council (Nedlac) Financial Sector Summit.