3.6 Broad-Based Black Economic Empowerment
This Ninth National Congress notes:

1. Racial differences in income, wealth and opportunities remain unacceptably high.
2. The reluctance of the private sector in some quarters to transform and especially to engage with all stakeholders, including labour, in negotiating sector charters developed to deal with sector-specific issues of empowerment and development.
3. The failure of narrow versions of BEE to include skills development, employment equity, broad-based ownership, employment creation and support for co-ops as key elements in effective empowerment for the majority of South Africans.
4. The state passed the Broad-Based BEE Act in 2003. The Act provided that all government procurement and licensing must take into account, as far as possible, the score and enterprise gets on a Broad-Based BEE scorecard.
5. Since the Act was passed, the dti has gazetted and engaged at NEDLAC on draft Codes of Good Practice that give details on the scorecard. The Codes will probably only be finalised toward the end of 2006 or early 2007.
6. Under current proposals, points on the scorecard (indicated in brackets below) would be awarded for:

a. The share of black people, and particularly black women, in ownership and executive management. The main target was to achieve 25%, 1% black ownership, which would give the black shareholder an effective voice on the board. (30% of the total points)
b. The achievements of targets for employment equity and skills development, with most of the points going to representivity and training for professionals and managers. (30% of the total)
c. Support given to black-owned enterprise through financial and technical assistance as well as targeted procurement. (30% of the total)
d. Other socially responsible investment and activities. (10% of the total)

7. Micro enterprises, which are too small to register for VAT, would be entirely exempted from the scorecard.
8. The Act also provides that stakeholders in a sector, explicitly including labour and community groups, may agree on a Sector Charter that could diverge from the scorecard in order to take into account sectoral needs. The dti must gazette such a Charter under the Act,

a. It would have to be accepted by all stakeholders, including labour, which gives unions something very like a veto.
b. Parties to a Charter would have to justify deviations from the scorecard.

9. Currently, sector charters are under discussion in mining, finance, health, construction, property, ICT, agriculture and legal services. But they cannot begin the gazetting process until the Codes of Good Practice are finalised, and even then the gazetting process may take some months.

Therefore this Ninth National Congress resolves:

1. To concretely campaign for truly Broad Based Black Economic Empowerment in which mass empowerment of the young, women and rural people are key defining feature and in which elite enrichment of the few is condemned.
2. To campaign for a BBBEE that results in mass empowerment. To actively promote a BBBEE strategy as encompassed by the Act and the Codes of Good Practice which seeks to radically empower all previously disadvantaged communities by opening up access to economic opportunities and permanently alleviating poverty.
3. To campaign against a narrow, self-interested interpretation of BBBEE centred on ownership and the enrichment of a few. This strategy must redistribute wealth among all disadvantaged communities and serve as a tool to eradicate not only racial and class, but also gender inequalities.
4. Broad-based BEE must include payment of a living wage. All companies including the BEE companies should sign

a Charter of Worker Rights in which they commit to supporting at least the following rights of workers.
a. Payment of a living wage.
b. Full and comprehensive trade-union rights.
c. Advanced health and safety practices.

4. In all sectors and industries the BEE charters must be outcomes of stakeholder negotiations. To call for and ensure that the empowerment charter process takes place in all sectors and that industry engages effectively with other stakeholders, specifically labour, on empowerment issues.
5. To campaign and call on government to design special legislation facilitates access to finance for SMMEs and co-operatives, especially those with job-creation potential.
6. To give our support to other initiatives such as the Financial Sector Charter and the related SACP campaign, which aim to provide previously disadvantaged individuals with access to economic opportunities.
7. The BBBEE Codes must provide no exemption particularly for multinational corporations (MNC).
8. To call for other empowerment vehicles which fall outside the codes of good practice such as land and agrarian reform, public works programmes and the re-nationalisation of state owned assets and enterprises.
9. To implement mass training programmes for workers and the unemployed with regards to addressing skills development and employment equity issues, etc.
10. COSATU, together with partners such as the Dora Tamana Institute, must develop clear guidelines on the establishment of co-operatives. Co-ops must be used as model for mass-based empowerment.
11. The Alliance must define who previously disadvantaged people are.
12. The entire BBBEE process does not adequately emphasise employment, including through support for local procurement and strong ties to sector strategies.
13. The ownership requirements should do more to incentives collective ownership, for instance by community trusts, worker ownership and pension funds. In response to COSATU’s demands at NEDLAC, some incentives are provided for collective ownership, but they remain weak and it is not clear if retirement funds would qualify.
14. The employment equity and skills development targets undermine the relevant legislation by focusing primarily on managers and professionals. Yet a central aim of the original acts, which were passed by Parliament (unlike the broad-based BEE Codes), was to ensure advancement for lower-level workers.
15. In many sectors, such as health and finance, the services and products provided may be important in empowering the poor and their communities. More weight should be given to these issues.