The Coding of Black Economic Empowerment and Redistribution Policy Failure in Post-Apartheid South Africa

Abstract

This study sought to interrogate and provide a critical analysis of the stated aim of the Broad-Based Black Economic Empowerment (BBBEE) policy (2003) to redress the racialised distribution and resultant economic inequities of the apartheid past by advancing Black ownership of and control over the economy. The study also sought to provide a critical analysis of the contested legal meanings and conceptualisations of redistribution in the BBBEE policy in order to provide insights on why the BBBEE policy has not achieved its redistributive objectives in a democratic South Africa. At the core of this study has been the assertion that when law – an authoritative policy instrument – is enacted for the specific purpose of being a catalyst for economic transformation, and when redistribution proves ineffective, it is important to enquire if its legal conceptualisations of a deracialised economy through redistribution are consistent with those found in policy. The study, furthermore, sought to critically assess whether the concepts of redistribution adopted in policy and law make clear provision for the deracialisation of the economy in ways that allow for meaningful socio-economic change in the long term, rather than limited reformism that reproduces racialised inequality in the democratic era. In order to arrive at this understanding, the study interrogated and analysed the conceptions of redistribution in the BBBEE policy and their legal codification in the BBBEE Act (Act 53 of 2003) at the formalisation of the policy during the period of 1994 to 2003. Furthermore, the research analysed if the conceptions of redistribution in the Act were consistent with those identified in the policy. The findings of this study reveal that the BBBEE policy emerged out of a highly contested legal process that started many years before the policy was conceptualised. Ideas or policies regarding matters of redistribution and socio-economic justice were debated and, arguably, settled even before the democratic state of South Africa was declared in 1994. The power contestations that took place during the political negotiations for freedom influenced what economic system would be adopted in the country, what legal system would be put in place, what political institutions would be V in place and what powers they would have, as well as what could or could not be done about the injustices of the past. Because of these power contestations, the study found that the BBBEE policy of 2003 had conceptual challenges that prevented it from attaining its objective to deracialise the economy in ways that allow for meaningful socio-economic change in the long term. The study also found that the conceptual challenges in the BBBEE policy were transferred to the BBBEE Act and in the process rendered the Act ineffective as an authoritative legal instrument of the BBBEE policy. Whilst the study acknowledges that the Act cannot be singled out as the primary determinant of BBBEE redistribution policy failure, it demonstrates that it was weakened by the concepts of redistribution used in it and could not play its role to provide authority in the regulation, implementation, monitoring, evaluation and enforcement of the BBBEE policy. Importantly, the study found that the absence of any reference to the necessity of justice in both the BBBEE policy and Act points to a critical flaw in the conceptualisation of the policy and its redistributive intent. The defining of BBBEE outside the imperative of justice, as the study established, demonstrates that the policy was not conceived for redistribution. In the result, the BBBEE policy framework did not place race at the centre of its redistribution intent; it did not introduce measures aimed at empowering the general Black population as opposed to a small Black business class; and failed to give the state the power to intervene in the economy for redistribution in favour of the Black population. In the final analysis, the study found that any amendment made to the BBBEE policy framework to improve its effectiveness that does not correct the conceptual foundations of the BBBEE policy to ground it on justice will not realise meaningful redistribution and the effective participation of Black people in the economy.