Revisiting Broad-Based Black Economic Empowerment

Inducting a cohort of newly certified black-owned suppliers

Last summer the focus of my final paper for my Global Hunger and Food Security course was the impact of fair trade certification and Broad-Based Black Economic Empowerment legislation (B-BBEE) on the South African agricultural sector. Based on my research and experience visiting numerous fair trade certified producer organizations in the Western Cape I was highly critical of B-BBEE legislation, left with minimal evidence that its impact yielded socioeconomic improvements of the black population, particularly with regards to economic empowerment. 

Who would have known that a year later I'd be moving to South Africa to work for an Adviser of a nonprofit that uses B-BBEE compliance as a vehicle for economic development? While I'm still skeptical of B-BBEE policies, I obviously can't give up yet, as I'm dedicated to a yearlong position that that requires us to work within the government's B-BBEE policies in order to achieve success.

SASDC headquarters in Rivonia

The overarching goal of B-BBEEE is to undo the socioeconomic imbalances resulting from the Apartheid, but not solely on moral justifications. It is a South African economic growth strategy that identifies the only way the country's economic potential will be reached is by ensuring the black majority is incorporated into the economic mainstream. Think affirmative action, a policy many of us Californians remember during college applications, where ticking a minority race box was a not-so-silent preferential factor in preferred admission over the white competitor given all other qualifications equal. Every company in South Africa has a BEE scorecard, displaying a rating from 1-8 where the lower the number, the higher the company's BEE compliance. These scorecards are transparently displayed at the front of the business, similar to an "A", "B" or "C" Department of Health Safety rating in the window of any New York restaurant.

My daily route to work via the Gautrain bus

According to a recent survey, “three-quarters of South Africa’s medium-sized companies are not concerned or are neutral about their suppliers’ empowerment profiles” while “over a third do not feel empowerment is an issue when it comes to wining a business”. Why is this an issue? B-BBEE creates a ceiling. Companies will "comply" with these codes to obtain a certain rating, yet aren't passionate about what the second "E" in B-BBEE stands for - empowerment. The success of B-BBEE must ultimately be driven by the private sector, but there is obvious struggle to achieve momentum of corporate leadership. 

The private sector has yet to reach a point where black-owned SMME’s are regarded on the same skill playing field as other qualified SME’s. All it takes is for one large company to report a high failure rate with small businesses, particularly small black businesses to form a negative generalized perception against any black business seeking a chance.  This is typically what happens.

Another problem facing this country is an evident skills shortage. I've heard crazy stories about how some private sector construction companies for example, will import 5,000 welders from countries in Europe and South Asia for short-term projects because we have a shortage of welders in South Africa - 5,000! Coupled with a ridiculously high unemployment rate of 25 percent, it seems unbelievable that either the government or private sectors don't invest in technical skill building. You'd figure the private sector can drive economic growth through BEE compliance and reduce unemployment through the creation of jobs by provisioning technical vocational programs for township communities, for example. This way companies can meet their technical skill labor needs and contribute to broad based economic growth.

Dusty shoes on my first day of work

About a week ago the Department of Trade and Industry held the first National B-BBEE Summit, celebrating 10 years of empowerment after the codes were implemented in 2004. I was fortunate enough to attend the conference, feeling as if I was a participant in history in the making. Main outcomes of the conference? Overall, B-BBEE is a success and according to recent studies, empowerment is spreading - or whatever that means. It's no surprise empowerment is one of the main objectives of BEE, yet I believe it is one of the most difficult achievements to measure.  I'm interested to see their indicators for "empowerment"... as I obviously have my reservations. B-BBEE has potential to transform South African’s local social economy, but needs stricter government-led implementation regulations.

So how does this relate to the South African Supplier Diversity Council and my role in the organization?

For the past month I have been in Johannesburg as a selected fellow of the Emerging Markets Development Advisers Program (EMDAP). EMDAP is a USAID-funded program administered by the Institute of International Education, most popularly known for administering the Fullbright Program. This 12-month fellowship is probably the most exciting and ideal opportunity I've been granted thus far in terms of an opportunity for professional growth. In fact, I almost didn't apply to the EMDAP because I was intimidated by the application process and competitive nature of the program, but let’s just say I'm obviously glad I did.

Enhancing our visibility at conferences

I've been added to the team as a Communications and Business Strategy Adviser for the SASDC, a corporate-led nonprofit promoting and facilitating supplier diversity in South Africa, drawing its membership from and funded by corporations based or operating in the country. The SASDC is modelled after the US National Minority Supplier Development Council Inc (NMSDC), except integrates specifically marginalized black suppliers into corporate supply chains using targeted procurement and enterprise development. The hope is that the SASDC will give black-owned businesses greater opportunity and participation into their nation’s local economy, granting them with economic empowerment.

As an EMDAP Adviser I’ll be developing strategy to increase the SASDC’s corporate membership through brand awareness and targeted outreach. Founded in 2011 the SASDC is a relatively new and struggles with buy-in from potential new corporate members.

Greatest challenges so far? Definitely cultural. Coming here I was able to identify the "New Yorker" in my personality. Transitioning from a New York pace of life to the easy-going work culture in Johannesburg has been a tough transition. Correction, transitioning from the graduate student mentality that "it is acceptable to work until 3am" to normal 8-5pm work hours has been tough. Maybe the issue is that I'm a workaholic, or maybe I'm just passionate about my work. Either way, my brain isn't trained to shut down at 5pm. Someone once described New York as "transactional", and I think they were correct. I've been brainwashed to always staying alert and in networking mode. In short, it's been difficult to slow down - although I know this is good for me (and my Mommy would agree)!