Abstracts

21 inequality of opportunity between white and nonwhite South Africans. It was not until the 1970s that the apartheid state began to reform due to pressure from international powers and the recognition of a growing black middle class (Ratuva, 2013, p. 221). During the 1980s and early 1990s, relationships between political elites and business leaders resulted in mutually beneficial transfers of equity ownership to black stakeholders. These initial forms of empowerment were a way for companies to adapt to changes in South Africa’s political economy (Lindsay, 2015, Section 4.5). Despite these improvements, white supremacy and class inequality continued to entrap the majority of nonwhite South Africans. Since the legislative facets of apartheid institutionalized racial segregation, in-depth reform and structural change were required for reparation. In February of 1990, the ANC was instrumental in the institutionalization of BEE (Lindsay, 2015, Section 4.5.4). With the dawn of a new South Africa in 1994, the ANC government was able to commit itself to the principle of equality put forth in the Freedom Charter of 1955. 1 The government enacted several transformation initiatives, such as the Reconstruction and Development Programme and the Employment Equity Bill (Ratuva, 2013, p. 225). The Reconstruction and Development Programme instituted numerous affirmative action-based policies including, but not limited to, access to housing, education, health, and electricity. The aggregate of the policies immediately put forth by the new government can be considered the initial institutionalization of BEE. The policies aimed to benefit African, Indian, and colored ethnic groups, which commonly are referred to as black or historically disadvantaged South Africans (HDSAs), with written policy and legislation. In 1998, the ANC established the BEE Commission to analyze the successes and inefficiencies of the BEE agenda at the time. The BEE Commission consisted of black business leaders and was chaired by Cyril Ramaphosa, 1 The Freedom Charter is a set of core principles put forth by the Congress of the People in 1955, which states that South Africa belongs to all who live in it (Congress of the People, 1955). who currently serves as the President of South Africa. The BEE Commission Report of 2001 defined BEE as a socioeconomic process “seeking to substantially and equitably transfer and confer the ownership, management, and control of South Africa’s financial and economic resources to the majority of its citizens,” and it judged that “the private sector’s participation in BEE has been inadequate and in some instances self-serving” and went on to suggest that the government institute a BEE Act to provide a framework for a more functional transformation process (BEE Commission, 2001, pp. 2, 35; Lindsay, 2015, Section 7.2). These critiques influenced the ANC to reform BEE to benefit the majority of black South Africans rather than a select group of elites. Changes came in the form of the BBBEE Act of 2003, accompanied by the Codes of Good Practice in 2004. Parliament passed BBBEE Act 53 of 2003 and established the BEE Advisory Council under the purview of the Department of Trade and Industry (DTI) (Republic of South Africa [RSA], 2004). The Codes emphasized ownership, management and control, employment equity, skills development, preferential procurement, enterprise development, socioeconomic development, and qualifying small enterprises (RSA, 2013). The codes are accompanied by scorecards designed to award a score to companies based on their compliance to the various pillars of BBBEE. In the government contracting and tender process, companies with higher scores are given preferential treatment and are more likely to be selected or awarded contracts. BBBEE’s benefits are designed to extend beyond government contracted portions of the economy via inclusion of supplier relations as a scorecard metric. Ten years after the Act of 2003, Parliament passed BBBEE Act 46 of 2013 to clarify interpretation, promote compliance by public entities, and establish the BBBEE Commission to orchestrate and increase compliance (RSA, 2014). Since the inception of BEE and related BBBEE Acts, there have been various schools of thought on their effectiveness and place in the South African economy. BEE’s ability to yield positive transformation has been marred by its unfortunate tendency to perpetuate