Black Economic Empowerment

The South African approach

Inequality and unemployment still largely occurs along racial lines in South Africa, despite the end of apartheid. The government is addressing this by promoting Black Economic Empowerment throughout the economy.Pro-poor tourism is part of this.

Black Economic Empowerment (BEE) is a strategy for transforming the economy through supporting black business development, black 'empowerment' (ownership) of white businesses and developing human resources. Since 1994, South Africa's democratic government has introduced several measures to advance BEE.

The Tourism BEE Charter and Scorecard

One such initiative is the Tourism BEE Charter and Scorecard, launched in May 2005 by the South African tourism industry. This aims to change the 'lily white' complexion of tourism and sets BEE status targets for tourism firms to achieve by 2009 and 2013. BEE status is scored according to performance of firms in seven areas:

• the percentage of ownership of the firm by black people
• strategic representation: black representation at board level and senior directorships
• employment equity, including fair staffing and employment practices
• a firm's spending on goods and services from black businesses
• support to enterprise development
• investment in skills development
• investment in social development and other industry specific actions (such as community tourism).

Tourism companies with good BEE ratings have a greater chance of receiving public sector business and contracts from major corporations. These corporations will want to improve their own BEE score and will therefore seek suppliers who are BEE compliant. This creates momentum throughout the tourism sector and establishes a business case for BEE.

Challenges facing BEE

Critics are concerned that, to date, some BEE deals have only benefited a small elite group of black people because of their emphasis on the ownership dimension, rather than the more developmental dimensions. This has prompted a shift towards more pro-poor BEE, which targets poor employees, communities and small suppliers as beneficiaries.

BEE is a new policy direction for South Africa's tourism sector. There is not yet enough evidence to say whether it will achieve all of its objectives. However, the government's active role in increasing black involvement in tourism, without resorting to enforcement, is a creative response to the need to share benefits more equally. If successful, BEE will ensure that pro-poor development is entrenched throughout South Africa s tourism sector.

Kate Rivett-Carnac
Tourism, Trade and Investment South Africa, the Department of Trade and Industry, Private Bag X84, Pretoria, 0001, South Africa
T +27 12 394 1185
F +27 12 394 2185
katec@thedti.gov.za

For more information on BEE see:

The Department of Trade and Industry
www.thedti.gov.za

The Department of Environmental Affairs and Tourism
www.environment.gov.za

Tourism Business Council of South Africa
www.tbcsa.org.za

Views expressed on these pages are not necessarily those of DFID, IDS, id21 or other contributing institutions. Copyright remains with the original authors but (unless stated otherwise) any article may be copied or quoted without restriction, provided both source (id21, insights) and authors are properly acknowledged and informed. Copyright © 2006 id21. All rights reserved.