While empowerment efforts have not changed in motive, new approaches signal a changing era. White males still dominate business leadership in South Africa 17 years after the end of apartheid. However, revisions to empowerment policies aim to broaden transformation by placing greater emphasis on skills development, small business support, and preferential procurement. If successfully implemented, these new approaches could help address past failures and more equitably distribute economic opportunities.

1. | 017 |
State of empowerment
While the motive for
empowerment may not
have changed, a number
of innovative approaches
are signalling a new era
ByLouiseBrougham-Cook
of things
The shape

2. State of empowermentState of empowerment
| 018 | | 019 |
If the state of empowerment was bleak
a year ago – mainly due to the slow
pace of transformation and a failure to reach
the bulk of the previously disadvantaged –
conditions a year on are not much changed.
However, a range of new approaches, yet to
be implemented, are set to transform the
economy more equitably.
Although the BBBEE Advisory Council
to the presidency stated in April that there
has been an overemphasis on diversity of
ownership and senior management, all indi-
cations are that white males still dominate
the business environment in SA, 17 years
into the new democracy.
Business Unity South Africa (Busa)
found in a survey last year that of 269 CEO
positions, no less than 91% were occupied
by whites, and of 219 CFO positions, 92%
also went to white occupants. With regards
to gender, men were most dominant, making
up 97% of the CEO positions and 93% of the
CFO jobs.
The Employment Equity Commission’s
latest research shows that due to the fact
that whites still occupy most top and senior
management positions in listed companies,
there is a self-perpetuating effect on skills
training which ends up benefiting mostly
the white population and further alienating
previously disadvantaged groups from any
real and meaningful participation in the
mainstream economy.
‘The representation of the other designa-
ted groups at the various occupational levels
would have been much more equitable if
only employers made a concerted effort to
capitalise on recruitment and promotion
opportunities by proportionally distributing
them according to population size or econo-
mically active population,’ the commission
stated in its report.
the popular uprisings in North Africa and the
Middle East, the selective and slow nature of
economic transformation could be a scenario
begging to be exploited.
In a veiled threat, National Youth Devel-
opment Agency Chairman Andile Lungisa
referred on national TV to the uprisings in
the north saying the agency would be at the
forefront of addressing youth unemployment.
This was echoed by Mpho Nkeli, acting
chairperson of the Employment Equity
Commission, when she said in the com-
mission’s latest annual report that the lack
of progress ‘could contribute to polarising
our society and potentially create a volatile
situation where the educated unemployed
youth revolt against the slow pace of
transformation’.
Some positive developments did, how-
ever, take place in mining with the demise
of the questionable BEE company, Aurora
Empowerment Systems, one of the main
examples of transformation benefiting only
a narrow political elite.
Although a terrible saga, in which the
empowered company crushed some 4 000
jobs (among other alleged misdemeanours),
it’s encouraging that parliament intervened in
a private-sector company to protect the rights
According to Fred Gona, Parliamentary
Portfolio Committee chairperson, communities
in Carletonville were keen that all mines be
nationalised to remedy environmental and
social concerns that affect them. He went
as far as to suggest that the charter could
be incorporated into law to ensure that it
is enforced. In terms of the charter, 26% of
mines need to be black-owned by 2014.
A meeting of the BBBEE Advisory Council
recently concluded that empowerment was
not just about big business deals for a few
individuals in society, but needed to be
about the real empowerment of ordinary
people. President Zuma singled out fronting
as a ‘heinous practice’ that insulted the dignity
of the poor and said tender abuse was another
major failure in the system.
A progress report tabled at the meeting
showed that in 2010, among other highlights,
government had created 2 159 permanent
jobs in black-owned co-operatives as well
as 745 temporary job opportunities. A total
of 224 new SMMEs were created and support
was given to several others.
The council pointed out that a much
stronger focus on the broad-based elements
of BBBEE was necessary, such as ownership
by communities and workers, increased skills
Broadening transformation
The failure of the BBBEE scorecard system
to address not only white dominance of the
economy but to reach the broader black
population and the unemployed youth, is
currently perhaps the most pressing issue
facing government and the private sector.
In light of this, the entire BBBEE regime
is under review with the BBBEE Advisory
Council and the DTI at the helm of anticipated
changes. These would see the BBBEE Codes
of Good Practice revamped to place greater
emphasis on enterprise development, skills
training and preferential procurement. The
DTI is also working to standardise verification
agencies to enable certain auditors to issue
verification certificates.
But Nomonde Mesatywa, chief director
of BBBEE at the DTI, says this is only the
fourth year that the codes have been in
force and there has been some progress.
‘We are working on addressing the more
indirect elements of the scorecard. BBBEE
is becoming a key component in corporate
SA and more companies are being measured
for compliance,’ says Mesatywa.
‘This cannot be downplayed because
of perceptions that we are not moving
fast enough – transformation is a journey,
not an event. But yes, there are still a lot
of interventions needed and now is an
opportune time to measure what the actual
impact has been since the gazetting of the
codes in 2007/08.’
BBBEE has also been identified as
a critical driver of economic growth and
job creation as part of government’s New
Growth Path which saw R9 billion being
pumped into the economy for job creation.
The slew of jobs lost last year due to the
global recession did nothing to alleviate SA’s
ongoing unemployment and, coupled with
development and career-pathing, support
for small enterprises and co-operatives as
well as a renewed procurement from local
producers to boost jobs creation.
In a move designed to address past
failures, the DTI is revising several pieces
of legislation as well as the codes to pro-
mote employment creation, investment in
small business, broad-based ownership
and employment equity. Government has
also identified BEE as a key driver of
economic growth envisaged by its New
Growth Plan drawn up by the National
Planning Commission.
To enforce compliance by the private
sector, the Commission for Employment
Equity has recommended that irrespective
of the size of the organisation, both the
employment equity and skills development
scorecards become compulsory elements
of the codes and said a process was needed
to ‘certify’ employment equity so that this
becomes a condition when government
awards tenders.
‘The disproportionate representation of the
various groups in the different occupational
levels has impacted negatively on training as
well. As whites dominate the high-earning
occupational levels, employers tend to
All indications are that white males still
dominate the business environment
in SA, some 17 years into the
new democracy
of workers and hold
the company
accountable.
In a further step
to broaden trans-
formation in mining,
parliament started
a series of public
meetings with mining
communities some
months after the
revised charter saw
the light last year.

3. State of empowermentState of empowerment
| 020 | | 021 |
photography:Masterfile
tested at the top in terms of ownership and
shareholding.
‘I’m not saying there shouldn’t have
been any transformation until the education
system was transformed. But both should’ve
been done concurrently, with greater co-
ordination. In many instances a mismatch
exists between available skills and skills
required to meet transformation targets. This
has put enormous pressure on businesses.’
Rau says there’s no doubt that business
is committed to economic transformation
and sees it as an imperative, if for no other
reason than to avoid eventual social upheaval,
but says Sacci is concerned about the seeming
failure of a business ethic and an acceptable
value system in doing business.
In the farming
sector – one of the
industries identified
by government as
a key driver of job
creation and rural
development – an
Agricultural Business
Chamber survey
among 30 large
agribusinesses
in processing,
handling and
marketing, found
that about half of the
However, the chamber is upbeat about
prospects for enterprise development in
the agricultural sector and says this can
be done ‘relatively quickly’.
Preferential procurement on the other
hand proved to be more complex due to
a heavy administrative burden and the fact
that the DTI has not made a comprehensive
database of scorecards freely or easily
accessible available.
The way forward
With the new emphasis on enterprise
development in terms of which companies
will be rewarded for helping and mentoring
BEE businesses, stakeholders are hoping
that a new era has dawned on economic
transformation in SA that will be more
inclusive of the broader society.
The DTI has recently undertaken its
second research study on BBBEE, three
years after the first when the codes were
first introduced and which Mesatywa
concedes ‘did not look so good’.
The results of the research should be a key
indicator of whether or not transformation is
going according to plan. Says Matabane: ‘We
provide them with more training opportu-
nities at these levels. The disproportionate
representation of training opportunities for
blacks impacts negatively on employment
equity,’ the commission reported.
Pace of transformation
Neren Rau, CEO of the SA Chamber of
Commerce and Industry (Sacci), says it’s
possible that expectations about transfor-
mation were pitched too high from the start
due to an education system that fails to
facilitate faster change in the workplace.
A survey conducted by Sacci in December
last year, found that a third of the around 150
business leaders surveyed chose education
as the government function that needed
‘This is a worldwide phenomenon,
but in SA the trend can derail transfor-
mation and scupper the whole process.’
Kganki Matabane, executive director
of Transformation at Busa, says the pace
of transformation must be speeded up,
adding that it is encouraging that there’s
now a commitment to broad-based em-
powerment rather than a narrow approach.
‘The critical issue is that the business
sector upholds the law in a manner that
goes beyond a mere tick-box approach
towards meeting the underlying objectives
of substance. We’re sitting on a time bomb
if we do not find sustainable solutions that
will ensure that the majority of citizens play
a meaningful role in the economy.’
are positive that the amendments to the
codes will bring about the creation of
sustainable black enterprises and jobs.’
But the outcome of the new plans will
depend on how fast and effectively they are
implemented with government seemingly
maintaining its wariness about private-sector
commitment and having increased its moni-
toring capacity within the Commission for
Employment Equity in the past year.
This figure indicates that the percentage of individuals being trained at this level is far too small for the country to
achieve an equitable workforce.
professionally Qualified
Source: Commission of Employment Equity
AM CM IM WM AF CF IF WF
All employers 16.8% 7.4% 6.3% 35.0% 10.1% 4.5% 3.1% 16.7%
All government 27.9% 12.8% 3.1% 15.6% 19.8% 8.4% 1.5% 9.9%
All private 12.8% 5.5% 7.5% 42.0% 6.6% 2.8% 3.7% 19.2%
Percentage
35
30
25
20
15
10
5
0
The BBBEE Advisory Council recently
concluded that empowerment was not
just about big business deals for a few
individuals, but needed to be about the
real empowerment of ordinary people
the most urgent
attention.
Rau says that if
the BEE regime had
taken cognisance
of the need for
transformation
of the education
system as a key
requirement to shift
the economy, fewer
mistakes may have
been made and
targets may have
been staggered
across the different
management and
ownership levels
of companies.
He agrees that
the biggest number
of graduates were
from designated
groups, but says
companies were
companies had a measure of black ownership
of up to 37%.
A major constraint in speeding up trans-
formation in this sector, according to the
survey, is that only active producers can
qualify for ownership of co-operatives and
producer-owned companies.
According to Theo de Jager, deputy
president of AgriSA, formal BBBEE strategies
had a failure rate of 90% due to communal
farming that doesn’t work properly. ‘There
is no involvement of farmers’ associations,
even on recapitalisation.’
However, AgriSA says it’s driving an
informal process in terms of which it has
committed R200 million over a five-year
period to set up equity schemes in the
Western, Eastern and Northern Cape to
create 73 commodity-driven projects
to empower designated groups.
The Agribusiness Chamber has also
released data on similar existing schemes,
saying that one of the key constraints in
upscaling the projects was a lack of deve-
lopment finance; an obstacle it reckons can
be addressed if the Land Bank repositions
itself to become a Land Development Bank.
AM African male, CM coloured male, IM Indian male, WM white male, AF African female, CF coloured female,
IF Indian female, WF white female