Broad-based black economic empowerment has been a central part of the South African government’s economic transformation strategy. The main purpose of BEE is to increase the number of black people that manage, own, and control the country’s economy, and as a result, to reduce income inequalities and to contribute to economic transformation in South Africa. During apartheid in South Africa, the government procurement system favoured large, established businesses and made it difficult for newly established businesses to participate in the procurement system. This chapter gives an overview of the Black Economic Empowerment policy as a means to achieve socio-economic transformation in South Africa by providing preferences for Historically Disadvantaged Individuals (HDIs) and small businesses, when making procurement decisions. It also examines how procurement is used as a policy tool by government while simultaneously ensuring that it does not contradict the constitutional right to equality. The chapter also explores the implications of the Preferential Public Procurement Framework Act (Act 5 of 2000) and the latest procurement regulations. Finally, it discusses the use of ICT and the vital role it plays in preferential procurement in South Africa.
The Price of Corporate Social Responsibility: The Case of Black Economic Empowerment Transactions in South Africa
