lexisnexis | March 24, 2025
Over 20 years, enthusiasm among business leaders for economic empowerment laws could decline, but 2025 is projected to be a year in which the government will be asked to ask new questions and bring new results to those with no answers.
Famous political economist Morezzi Mbeki recently called on the New Government of National Unity (GNU) to abolish the controversial Black Economic Empowerment (BBBEE) policy in support of exploring alternatives to address the country's unsustainable levels of black unemployment and inequality. Law enforcement is projected to be more severe in 2025.
Tshediso Matona, head of the broad Black Economic Empowerment Committee, shows that there are plans to introduce additional incentives and potential fines to improve corporate participation in B-BBEE. A proposal strongly supported by President Cyril Ramaphosa.
Critics have argued that B-Bbee is ineffective in dealing with the country's dire economic inclusion state, and in some cases have served as an enabler of corrupt practices that ultimately created opportunities for a small number of well-connected individuals.
South African companies listed must disclose their empowerment status of black people in their annual reports under Section 13G of the B-BBEE Act, but fewer each year.
In 2022, only 141 of the approximately 400 listed companies officially submitted their reports (only 35% of JSE). There is inadequate participation for the government, and their stated plans are to show the benefits of regulations, but to become much more serious when it comes to penalties for non-compliance.
In a statement given to Reuters in September 2024, Matna suggested that the amendment would “not be too engrossed in ownership of existing businesses” as it could focus on increasing awareness of skills and companies investing in enterprise development.
Publicly “naming and embarrassment” companies that failed to submit their annual reports have also been proposed as a Matona remedy.
Modified Employment Stock Act
In November 2024, the 2024 Declaration Notice 231 was issued in connection with the launch of the Employment Equity Act No. 4 of 2022.
“Some of the amendments to be implemented from 2025 include removing some of the definitions of “designated employers,” amending the definition of “disability,” clarifying the obligation to consult with representative trade unions, and clarifying the ability to identify the economic sectors of the country and to set numerical targets for the implementation of such sectors. of employment and labor. ”
Skill development, job creation and comprehensive sourcing practices are all part of a clear policy shift that is seen as a transition from transaction to change.
How will this shift affect business compliance with this law?
At even more risk, it is important for companies to review employment equity changes applied to them and their sectors and set up a process to improve their B-BBEE scores in 2025 while achieving overall compliance.
To better understand the applicable changes, the latest practice areas added to the LexisNexis Practical Guidance (Legal Research and Workflow Tools available to Lexis Library and Lexis+ subscribers) are designed to provide practical, step-by-step guidance to legal professionals. Development, socioeconomic development, law.
Sector Code
Guidance from LexisNexis is conveniently provided in a variety of sector codes. In particular, it details how to measure and validate an entity based on which sector codes apply.
Sector code guidance is provided for entities belonging to transportation, tourism, forestry, property, construction, defense, marketing, advertising, communications, IT, finance and agriculture industries.
The moment you sharpen your x
Everything that has happened over the last 20 years may not be as up to date as many organizations should be on the B-Bbee frontline. Now that the February audit season has arrived for us, it's the perfect time to understand which parts of your business can apply and where your score can improve dramatically for your profits. Using the right tools will make the process easier and less confusing.
Business will undoubtedly play a key role in the ongoing transformation of South African society. The path to a country we all know can be created is to create more growth and prosperity for everyone in the country.
Now is the moment to actively participate in the transformation process by updating your commitment to B-BBEE compliance.
“Disclaimer – the views and opinions expressed in this article are the views of the author and are not necessarily those of the Bee Room.”
