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BBBEE Verification

By zianda19 Feb 27, 2014 938 Words
BBBEE is a program that was introduced by the South African governemtn solely for the benefitial of black people. It came about to promote equality and encourage previously disadvantages black people to take part in the economy of the country. The BBBEE seeks to better the lives of the previously disadvantaged groups. Due to Apartheid, the South African economy is divided into two streams, which are the main stream and second economy, blacks belong to the second stream, and the BBBEE’s main target is to close the gap by increasing level of participation of blacks in the mainstream, increase the market size and also increase income. BBBEE was introducted as a simply BEE, in 1994 when it emrged, then later was changed to BBBEE and the COGP were also introduced. The BBBEE is not only supported by the COGP, but also by the In 2007 Codes of Good Practice was first introduced by the governemtn, which included the following elements, Ownership, Management, Employment equity, Skills Development, Preferential Procurement, Economic Development and Sociio-Economic Development.

BBBEE is defined as "an integrated and coherent political process. It is located within the context of the country's nation transformation programme, namely the RDP (Reconstruction and Development Programme). It is aimed at change the imbalances of the past by seeking to substantially transfer and confer ownership, management and control of South Africa's financial and economic resources to the majority of the citizens. It seeks to ensure broader and meaningful participation in the economy by black people to achieve sustainable development and prosperity." BEE Commission Report, pg. 2

The BBBEE COGP’s objection is to act as a framework for the BBBEE Act which will guide and monitor the measurement of the BBBEE. On this paper, my focus will be on what I believe are the shortcomings of the BBBEE Act and its COGP, I will then further discuss how these can be improved and how the code’s objective could be achieved.


The Act was launched to create a framework which will be useful in promoting the BEE by allowing for the development of COGP. The objective of the act are to make sure that the BBBEE promotes participation of black people in the economy, change ownership and management structure of well established and new entities, increase access for the black people to skills training, economic activities and infrastructure, promote investment, empower rural and local communities and promote access to finance.

The COGP are a standard framework for measuring the BBBEE in all industries of the economy.

The shortcomings of the Act

1. Different interpretations

There are a number of sectors which make up the economy of the country and all of them are accounted for differently in the implementation of BEE. Sectors were most of the time in meetings discussing the issues around BEE. Strategies were discussed as to which would be fair and not fair which then led to long meetings and uncertainties this then delayed the implementation of the BEE. 2. Fronting

Fronting refers to an instance in which a black designated individual is appointed to be a director and shareholder of a company which the black person does not enjoy the benefits of the entity. Some black people are not aware what part to play in an entity that they are directors to and their salaries are not market related. Because white owned entities score less on BEE, they appoint black individuals to be a part of senior management, which they do not even play their roles and get paid less than other senior managements that are white. Most of the time whites tend to lie and say that their gardeners, secretaries and drivers are directors of their entities.

3. Substance over form
4. Lack of transformation with the management levels
5. Lack of access for every black person
6. Unclear
7. Lack of awareness
8. Funds not fairly distributed
The government introduced programs that would assist black aspiring businesses to achieve grants that would assist with 9. Unequality in the workforce
10. Skills shortage
Due to BEE Act, many qualified white males are now unemployed due to the fact that all companies now are hiring employees based on color rather than qualification, skills and recommendation. Most white males are now fleeing the country and go to countries which they will not be discriminated against.

12. Lack of dedication from black people
People may critically depend too much on BEE. South Africa is overpopulated with millions of black unemployed citizens and unskilled because of being previously disadvantaged. Most of the people are waiting for opportunities to present themselves on them instead of trying to make something out of their live. South Africans demand opportunities while they a sitting down not creating opportunities for them to better their lives, instead they complain about how the country is unfair and only assist those that are already rich. For example when the RDP projects was introduced a family was allocated a house which they leased out to other people so that they would get rentals from and moved back to the shacks they lived in before 1994, and 10 years later they still live there increasing the number of homeless people. Though the BEE was introduced to help South Africans live better, they still chose to be homeless and increase the number.

13. Reduction of productivity
BEE reduces productivity which leads to limited funds and tax, bringing the economy down, causing most of highly qualified South Africans which are non-black to relocate from SA like Doctors, Accountants, Lawyers and Engineers. This on its own creates a stigma about the country and may end up reducing the level of development in tourism.

528b kd building… Inyameko Trading 74

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