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82-743: Transnet SOC Ltd is a large South African rail, port and pipeline company, headquartered in the Carlton Centre in Johannesburg . It was formed as a limited company on 1 April 1990. A majority of the company's stock is owned by the Department of Public Enterprises, or DPE, of the South African government. The company was formed by restructuring into business units the operations of South African Railways and Harbours and other existing operations and products. As of August 2024,

164-455: A sustainable procurement approach, whereby government procurement is used to advance social policy objectives. So-called "BEE deals" – transactions aiming to increase black ownership of large businesses – have been conducted on a large scale, with BEE transactions concluded between 1994 and 2005 valued at between R150 billion and R285 billion. The government has subscribed to an explicit policy of black economic empowerment since 1994, but BEE

246-531: A broad definition of BEE: It is an integrated and coherent socio-economic process. It is located within the context of the country’s national transformation programme, namely the RDP. It is aimed at redressing the imbalances of the past by seeking to substantially and equitably transfer and confer the ownership, management and control of South Africa’s financial and economic resources to the majority of its citizens. It seeks to ensure broader and meaningful participation in

328-466: A broader and deeper scope than mere black ownership of business. BEE was seen as proceeding along three main lines: in addition to "direct empowerment" (now including managerial as well as ownership control), BEE would also explicitly encompass human resource development ( employment equity and skills development) and "indirect empowerment" (procurement policies, enterprise development, and socioeconomic development ). Codes of Good Practice to complement

410-517: A condition of those contracts. Finally, in some sectors, the award by government of operating licenses and concessions (such as concessions to export) is conditional on the licensed entity meeting certain BBBEE criteria – for example, in terms of the Mineral and Petroleum Resources Development Act , entities are eligible for mining licenses only if they are 26% black-owned. The generic BBBEE scorecard

492-531: A different, more lenient scorecard. Moreover, Exempted Micro-Enterprises (including businesses with total annual revenue below R10 million and all start-ups in their first year) are automatically given Level 4 BBBEE status. And, at the same time, primarily black-owned entities falling into either of these two categories automatically qualify for Level 1 (100% black-owned) or Level 2 (>51% black-owned) status. The BBBEE Act defines black persons as " Africans , Coloureds and Indians ," who, as of an amendment to

574-404: A form of tokenism whereby entities improve their BEE status by appointing black directors, managers, employees, or suppliers, who are, in practice, discouraged or inhibited from substantially participating in or benefitting from the enterprise. Several large companies have been investigated for BEE fronting, including Netcare and MTN . The BBBEE Commission has increasingly raised concern about

656-609: A form of unjust or unconstitutional racial discrimination or " reverse racism " against whites. Some critics argue that BEE deters investment in South Africa. Although BEE is not technically compulsory (unless the business wishes to seek certain contracts or benefits, or to be listed on the JSE ), critics argue that BEE compliance increases the cost of doing business in South Africa, among other reasons because businesses may hire consultants and lawyers to help them navigate

738-559: A further 18 locomotives that are waiting to be shipped to South Africa. Transnet subsequently terminated its contracts with Brian Molefe and his successor Siyabonga Gama. A forensic report states Molefe misled the Transnet board into approving costs. Molefe and three others increased the locomotive deal by at least R16 billion to R54 billion. By late 2018, both were under criminal investigation. The organisation fired Gama in October 2018 on

820-462: A major cause of political corruption in South Africa , with government contracts improperly awarded, at inflated prices, to politically connected " tenderpreneurs ," sometimes to the detriment of quality and service delivery. These concerns have received increased attention following revelations of state capture during the presidency of Jacob Zuma . There were, for example, allegations that BEE-related corruption had taken place at Bosasa and in

902-661: A public objective. For that reason, SOEs primarily operate in the domain of infrastructure (e.g., railway companies), strategic goods and services (e.g., postal services, arms manufacturing and procurement), natural resources and energy (e.g., nuclear facilities, alternative energy delivery), politically sensitive business, broadcasting, banking, demerit goods (e.g., alcoholic beverages ), and merit goods (healthcare). SOEs can also help foster industries that are "considered economically desirable and that would otherwise not be developed through private investments". When nascent or 'infant' industries have difficulty getting investments from

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984-495: A regular enterprise, state-owned enterprises are typically expected to be less efficient due to political interference, but unlike profit-driven enterprises they are more likely to focus on government objectives. In Eastern Europe and Western Europe , there was a massive nationalization throughout the 20th century, especially after World War II . In the Eastern Bloc , countries adopted very similar policies and models to

1066-709: Is a policy of the South African government which aims to facilitate broader participation in the economy by black people. A form of affirmative action , it is intended especially to redress the inequalities created by apartheid . The policy provides incentives – especially preferential treatment in government procurement processes – to businesses which contribute to black economic empowerment according to several measurable criteria, including through partial or majority black ownership, hiring black employees, and contracting with black-owned suppliers. The preferential procurement aspect of BEE has been viewed as paradigmatic of

1148-562: Is a viable argument for SOEs is debated. SOEs are also frequently employed in areas where the government wants to levy user fees , but finds it politically difficult to introduce new taxation. Next, SOEs can be used to improve efficiency of public service delivery or as a step towards (partial) privatization or hybridization. SOEs can also be a means to alleviate fiscal stress, as SOEs may not count towards states' budgets. Compared to government bureaucracy, state owned enterprises might be beneficial because they reduce politicians' influence over

1230-764: Is approximately 70% of total employment. State-owned enterprises are thus a major factor behind Belarus's high employment rate and a source of stable employment. In most OPEC countries, the governments own the oil companies operating on their soil. A notable example is the Saudi Arabian national oil company , Saudi Aramco , which the Saudi government bought in 1988, changing its name from Arabian American Oil Company to Saudi Arabian Oil Company. The Saudi government also owns and operates Saudi Arabian Airlines , and owns 70% of SABIC as well as many other companies. China's state-owned enterprises are owned and managed by

1312-572: Is as follows: The most recent versions of the codes identify ownership, skills development, and supplier development as priority elements. There are sector-specific codes defining targets specifically applicable to the agriculture, finance, defence, ICT, transport, property, forestry, construction, tourism, and media, advertising and communication sectors. The legislation's requirements for small businesses are less onerous. For example, Qualifying Small Enterprises (businesses with total annual revenue between R10 million and R50 million) are scored on

1394-515: Is black empowerment when it seems to benefit not the vast majority but an elite that tends to be recycled?" He also warned that, combined with widespread "dehumanising poverty," the system could build popular resentment against the ruling classes and between different sections of society. Pieter Groenewald , leader of opposition party the Freedom Front Plus , has called BEE an acronym for "black elite enrichment"; and John Steenhuisen ,

1476-469: Is contestable under what circumstances a SOE qualifies as "owned" by a state (SOEs can be fully owned or partially owned; it is difficult to determine categorically what level of state ownership would qualify an entity to be considered as state-owned since governments can also own regular stock , without implying any special interference). Finally, the term "enterprise" is challenged, as it implies statutes in private law which may not always be present, and so

1558-617: Is highlighted in the predominant local terminology, with SOEs in Canada referred to as a " Crown corporation ", and in New Zealand as a " Crown entity ". The term " government-linked company " (GLC) is sometimes used, for example in Malaysia , to refer to private or public (listed on a stock exchange) corporate entities in which the government acquires a stake using a holding company . The two main definitions of GLCs are dependent on

1640-725: Is that the policy has been co-opted by members of South Africa's political elite, mostly within the governing ANC, for the purpose of self-enrichment. From an early stage of BEE, analysts, extrapolating from the concept of a "patriotic black bourgeoisie," noted the likely contribution of BEE to the growth of a black capitalist class with close links to the ANC. Perhaps most prominently, several politically connected ANC stalwarts – notably Saki Macozoma , Tokyo Sexwale , Cyril Ramaphosa , and Patrice Motsepe – gained substantial wealth and influence in key sectors such as mining and finance through BEE deals. More broadly, BEE has been thought to increase

1722-570: Is the biggest division of Transnet. It is a heavy haul freight rail company that specializes in the transportation of freight. It is the biggest outside United States and excluding India that is not a company but a Government Department. Transnet Engineering is dedicated to in-service maintenance, repair, upgrade, conversion and manufacture of freight wagons, mainline and suburban coaches, diesel and electric locomotives as well as wheels, rotating machines, rolling stock equipment, castings auxiliary equipment and services. Railways were first developed in

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1804-619: The African National Congress (ANC) came to power in 1994 , the new government's priorities included redressing apartheid 's legacy of economic exclusion. Under apartheid, legislation and practice had restricted the access of non-Whites to job opportunities, capital , business and property ownership, and other forms of economic advancement, leaving vast racial inequalities in wealth and income. The new Constitution , finalised in 1996, emphasised protections against unfair discrimination and against disadvantage arising from

1886-715: The State-owned Asset Supervision and Administration Commission (SASAC) . China's state-owned enterprises generally own and operate public services, resource extraction or defense. As of 2017 , China has more SOEs than any other country, and the most SOEs among large national companies. China's SOEs perform functions such as: contributing to central and local governments revenues through dividends and taxes, supporting urban employment, keeping key input prices low, channeling capital towards targeted industries and technologies, supporting sub-national redistribution to poorer interior and western provinces, and aiding

1968-480: The ANC in 1997 agreed that: Though such instances may be an exception to the norm, experience in other countries has taught us that, without vigilance, elements of these new capitalist classes can become witting or unwitting tools of monopoly interests, or parasites who thrive on corruption in public office. However, in the overall, the rising black bourgeoisie and middle strata are objectively important motive forces of transformation whose interests coincide with at least

2050-496: The BBBEE Act were gazetted in two phases in 2005, setting out standardised criteria for measuring compliance with BBBEE indicators on a "scorecard"; the codes have been amended occasionally since then. At the centre of the implementation of the BBBEE Act is the "scorecard" according to which the compliance of individual businesses is measured. The Codes of Good Practice set out specific criteria (known as "targets") under each of

2132-538: The Mining Charter in 2002, both given regulatory status under the Mineral and Petroleum Resources Development Act . The Mining Charter, in particular, embraced principles later codified under BBBEE, identifying seven "pillars" of BEE (only one of which was ownership) and setting out a BEE "scorecard" for businesses. At the 51st National Conference of the ANC in December 2002, President Thabo Mbeki committed

2214-882: The Minister of Finance II, the Minister in the Prime Minister's Department in charge of the Economic Planning Unit, the Chief Secretary to the Government, Secretary General of Treasury and the heads of each of the GLICs (the Employees Provident Fund, Khazanah Nasional Berhad , Lembaga Tabung Angkatan Tentera (the armed forces pension fund), Lembaga Tabung Haji and Permodalan Nasional Berhad . Khazanah Nasional Berhad provided

2296-663: The SIU to investigate allegations of maladministration related to Siyabonga Gama's reinstatement as CEO of Transnet Freight Rail in February 2011. On 22 July 2021, Transnet experienced "an act of cyberattack , security intrusion and sabotage ," that caused it to declare force majeure at several key container terminals , including its Durban , Ngqura , Port Elizabeth and Cape Town harbors . The Durban port handles 60% of South African container traffic. As of 26 July most computer systems had been restored, but Transnet's investigation into

2378-748: The South African Government is the sole shareholder. Transnet is currently made up of: In December 2013, Transnet appointed nine black-owned companies to supply it with fuel over the following five years in a $ 1.5 billion deal aimed at promoting the South African government's black economic empowerment drive. On 17 March 2014, Transnet's CEO, Brian Molefe, announced contracts of R50 billion with four international manufacturing companies to build 1,064 locomotives (465 diesel and 599 electric). GE would supply 233 diesel locomotives, CNR 232 diesel locomotives, Bombardier Transportation 240 electric locomotives and CSR 359 electric locomotives. Of

2460-600: The South African Transport Services Act, 1989" transformed the South African Transport Services from a government department into a public company. On 1 April 1990, after 80 years of government and parliamentary control, SATS received company status. On 1 April 1990, a new company representing a vast transportation network was born, and appropriately named TRANSNET . Transnet Limited is a public company of which

2542-1019: The USSR. Governments in Western Europe, both left and right of centre, saw state intervention as necessary to rebuild economies shattered by war. Government control over natural monopolies like industry was the norm. Typical sectors included telephones , electric power , fossil fuels , iron ore , railways , airlines , media , postal services , banks , and water . Many large industrial corporations were also nationalized or created as government corporations, including, among many others: British Steel Corporation , Equinor , and Águas de Portugal . A state-run enterprise may operate differently from an ordinary limited liability corporation. For example, in Finland, state-run enterprises ( liikelaitos ) are governed by separate laws. Even though responsible for their own finances, they cannot be declared bankrupt ;

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2624-600: The absence of organised sources of capital, many of the black participants relied on highly-geared financing structures and special-purpose vehicles . Several BEE deals thus collapsed during the Asian financial crisis of the late-1990s. According to estimates, Black control of business had risen to about 10% of shares on the Johannesburg Stock Exchange by 1998, but, following the financial crisis, fell dramatically to between 1% and 3.8% by 2000. Meanwhile,

2706-469: The act in 2013, are South African citizens by birth or descent or were naturalised as South African citizens prior to 27 April 1994 (or would have been eligible for naturalisation prior to that date). This definition excluded ethnically Chinese citizens from becoming beneficiaries of the legislation. The government argued that, although Chinese people had been subject to discrimination under apartheid, that discrimination had been applied inconsistently and

2788-463: The act, promulgated in 2001, outlined a point system by which preference is allocated in the evaluation of public tenders – in addition to the competitiveness of a bid's price, "points" were given for the bidder's contribution to black economic empowerment. Shortly after the passage of the act, the first industry-specific BEE charters were published – the Petroleum and Liquid Fuels Charter in 2000 and

2870-471: The apartheid era with little capital and limited access to the same – may, by increasing the indebtedness of BEE beneficiaries, "encourage a willingness to cut legal corners and lapse into criminality." Detractors argue, therefore, not only that BEE beneficiaries are a small elite, but also that they tend to be a politically connected elite, comprising especially the friends and family of government and ANC officials. Critics also argue that BEE has thus become

2952-624: The area surrounding Cape Town and later in Durban around the 1840s. The first line opened in Durban on 27 June 1860. The initial network was created to serve the agricultural production area between Cape Town and Wellington. The news that there were gold deposits in the Transvaal Republic moved the Cape Colony Government (supported by British Government) to link Kimberley as soon as possible by rail to Cape Town as part of

3034-541: The attack's severity continued. A group of 66,000 pensioners have instituted a civil claim to recover about US$ 6.5 billion they claim Transnet plundered from their pension funds. The group has accused Transnet of stripping the Transnet Pension Fund and Transnet Second Defined Benefit Fund of its assets and mismanaging them to such an extent that the funds were unable to meet their obligations to members. They have also accused Transnet of attempting to dissolve

3116-712: The basis that it required a trustworthy CEO. In June 2020 it was reported in the Daily Maverick that three senior executives (Nonkululeko Sishi, Lenny Moodley and Shulami Qalinge) implicated in facilitating state capture had been dismissed. On 27 May 2022, Gama, along with four other executives, was arrested by the National Prosecuting Authority on charges of corruption, fraud and money laundering, and granted bail ahead of another court hearing in July 2022. In September 2024 President Cyril Ramaphosa

3198-488: The central concerns leading to the reform of BEE as a "broad-based" programme in the early 2000s – remains one of the major criticisms levied against the policy. At the advent of the policy, and especially during the Mbeki presidency, the ANC was explicitly committed to promoting the development of a "patriotic black bourgeoisie " whose rise could initiate broader transformation in the economy. The 50th National Conference of

3280-792: The colonial dream. In the Union of South Africa (31 May 1910 – 31 May 1961), consisting of the four earlier colonies: the Cape of Good Hope, Natal, Orange Free State and Transvaal; all railways in South Africa finally became unified as a state-owned railway system in 1910 when the Central South African Railways, the Cape Government Railways and the Natal Government Railways were all fused by an Act of Parliament (South Africa Act 1909). Thus

3362-417: The company has an accumulated debt of R121 billion. Transnet vs APM: Court hears 'heavens won't fall' if R12bn Durban port deal is delayed. The business units of Transnet include: The National Ports Authority provides port infrastructure and marine services at the eight commercial seaports in South Africa. Transnet port terminals was established in 2000, when Transnet's then single port division, Portnet,

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3444-584: The complexity of the codes and other regulations. In 2018, for example, as a condition for increasing investment in South Africa, the European Union requested a relaxation of BEE ownership rules, calling the targets unfairly onerous. Like the rest of South Africa's affirmative action policies, BEE – and the fact that all white citizens "feel marginalised" by it – has been linked to a brain drain of qualified workers from South Africa. However, one study notes that corporate brain drain from South Africa

3526-505: The controversial Vrede Dairy Project . At the Zondo Commission , former Bosasa executive Angelo Agrizzi implicated BEE verification agency Empowerdex in corruption, and it was later confirmed that Gupta -owned companies, implicated in substantial corruption, had secured Eskom contracts using fraudulent BEE certificates. Minister of Finance Enoch Godongwana said in 2022 that increased corruption in government procurement

3608-474: The earlier ANC RDP policy framework, on which the government policy was based. The ANC document viewed BEE initiatives as a means to "deracialise business ownership and control." As suggested by this phrase, early stages of BEE focused on promoting black ownership of large businesses. So-called BEE transactions aimed to diversify the demographics of company shareholders. However, White-owned companies entered into these transactions only voluntarily. Moreover, in

3690-469: The economy by black people to achieve sustainable development and prosperity. The Commission also proposed the passage of focused BEE legislation and the adoption of an integrated national strategy on BEE, comprising a set of simplified and coordinated guidelines and regulations applicable across the economy, to be implemented by an oversight body reporting to the cabinet. On some views, the Commission

3772-517: The economy. The notion of a BEE elite adds to this the further accusation that BEE ownership transactions themselves disproportionately involve one small group of black businessmen, with insufficient opportunities afforded to the black population at large. Anthea Jeffrey of the Institute of Race Relations has claimed that the group of beneficiaries amounts to about 15% of the black population. The shift to broad-based BEE has led to an increase in

3854-449: The extent of the practice. In 2021, Commissioner Zodwa Ntuli said that fronting was so widespread that improved measured performance against BEE objectives might not correlate with actual improvement in the economic situation of black people. She also called for a more stringent government response to those found guilty of fronting, which is punishable by fines, blacklisting, and up to ten years' imprisonment. A notable criticism of BBBEE

3936-507: The form of Public Sector Undertakings (PSUs). The Malaysian government launched a GLC Transformation Programme for its linked companies and linked investment companies ("GLICs") on 29 July 2005, aiming over a ten-year period to transform these businesses "into high-performing entities". The Putrajaya Committee on GLC High Performance ("PCG"), which oversaw this programme, was chaired by the Prime Minister , and membership included

4018-584: The government to drawing up a "Transformation Charter" involving a consolidated and clarified strategy on BEE. The BBBEE Act passed in 2003, under the custodianship of the Department of Trade and Industry , and commenced in 2004. The Act's stated objectives were to facilitate broad-based black economic empowerment by: During this period, under President Mbeki, the government's approach to BEE became "increasingly focused and assertive," and it became unambiguously committed to maximalist or broad-based BEE, with

4100-568: The immediate interests of the majority. They are, in this sense and in this phase, part of the motive forces of fundamental change. However, critics contend that, over two decades later, the beneficiaries of BEE, and of most BEE transactions, still comprise only a very small elite of South African society, with the vast majority of black South Africans receiving few benefits from the policy, and indeed with little progress in reducing overall poverty and inequality levels in South Africa in general. Archbishop Desmond Tutu expressed this view, asking, "What

4182-437: The importance or perceived importance of political connections to gaining state contracts and other business incentives, with the extent of inter-linkages between the state and business providing "the conditions for the possible emergence of a corrupt and nepotistic governance system." Moreover, some have suggested that the highly leveraged arrangements used to finance many BEE endeavours – necessary because most black people left

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4264-439: The leader of the opposition Democratic Alliance , has argued that BEE encourages the development of oligarchy at the expense of economic equality. A common accusation is that, despite the shift to BBBEE, BEE remains primarily geared towards ownership transactions, increasing black shareholding and directorships – and the wealth of their holders – without necessarily increasing the substantive control of black South Africans over

4346-412: The leading application of the incomplete contract theory to the issue of state-owned enterprises. These authors compare a situation in which the government is in control of a firm to a situation in which a private manager is in control. The manager can invest to come up with cost-reducing and quality-enhancing innovations. The government and the manager bargain over the implementation of the innovations. If

4428-592: The negotiations fail, the owner can decide about the implementation. It turns out that when cost-reducing innovations do not harm quality significantly, then private firms are to be preferred. Yet, when cost-reductions may strongly reduce quality, state-owned enterprises are superior. Hoppe and Schmitz (2010) have extended this theory in order to allow for a richer set of governance structures, including different forms of public-private partnerships . SOEs are common with natural monopolies , because they allow capturing economies of scale while they can simultaneously achieve

4510-530: The new deepwater Port of Ngqura was commissioned just 7 km outside of Port Elizabeth. Port Terminals not only handle cargo but also perform logistics management for container, bulk, break-bulk (multi-purpose) and car terminal operations. Transnet Pipelines , formerly known as Petronet, the guardian of the country's pipeline assets and is currently servicing two key industries (fuel and gas) by transporting petroleum and gas products over changeable distances. Transnet Freight Rail formerly known as Spoornet,

4592-430: The number of BEE deals involving large black-owned consortia , which some commentators have suggested may have increased the scope of beneficiaries under those deals. However, with little detailed public information available about the composition of the relevant consortia, this claim has been difficult to verify. On other, non-ownership metrics, there has been positive transformation since 1994, but critics argue that

4674-556: The pace of change has been inadequate. The Institute of Race Relations found that the number of black South Africans employed as managers had increased by 176.3% between 2001 and 2017 (compared to 32.1% population growth in that group over the same period). Yet in 2021, the Commission for Employment Equity found that white people remained dramatically over-represented in the top levels of the private sector: they filled 67.8% of top management positions, 58% of senior management positions, and 43.2% of all professionally qualified positions. As of

4756-506: The pension fund. Increases to pensions have been limited to 2% for close to the past decade, reducing most of the pensioners to poverty. State-owned company The terminology around the term state-owned enterprise is murky. All three words in the term are challenged and subject to interpretation. First, it is debatable what the term "state" implies (e.g., it is unclear whether municipally owned corporations and enterprises held by regional public bodies are considered state-owned). Next, it

4838-399: The private sector (perhaps because the good that is being produced requires very risky investments, when patenting is difficult, or when spillover effects exist), the government can help these industries get on the market with positive economic effects. However, the government cannot necessarily predict which industries would qualify as such 'infant industries', and so the extent to which this

4920-452: The process was a change in the name and image of the organization, which would reflect its new mission as a state business enterprise. In April 1981, the country's railway, harbour, road transport, aviation and pipeline operations became known as South African Transport Services (SATS). At the same time, the enterprise was restructured into units and divisions with strong emphasis placed on localized management. The "Legal Succession to

5002-524: The promotion of black empowerment in areas other than ownership was pursued piecemeal, especially through a series of laws including the 1998 Skills Development Act and 1998 Employment Equity Act. Amid dissatisfaction with the progress of existing initiatives, in May 1998 the Black Business Council appointed future President Cyril Ramaphosa to chair a BEE Commission. The Commission proposed

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5084-428: The proportion of the corporate entity a government owns. One definition purports that a company is classified as a GLC if a government owns an effective controlling interest (more than 50%), while the second definition suggests that any corporate entity that has a government as a shareholder is a GLC. The act of turning a part of government bureaucracy into a SOE is called corporatization . In economic theory ,

5166-706: The purposes of the BBBEE Act, as well as the Employment Equity Act. Some criticisms of BEE – particularly those about its economic effects – are difficult to disentangle from broader criticisms of South Africa's broader employment equity or affirmative action programme. This is because BEE is closely tied with that broader programme, implying affirmative action both explicitly and insofar as it provides private-sector entities with strong incentives to pursue affirmative action internally. General criticisms of affirmative action are therefore also relevant. The "narrow base of empowerment" effected by BEE – one of

5248-451: The question of whether a firm should be owned by the state or by the private sector is studied in the theory of incomplete contracts developed by Oliver Hart and his co-authors. In a world in which complete contracts were feasible, ownership would not matter because the same incentive structure that prevails under one ownership structure could be replicated under the other ownership structure. Hart, Shleifer, and Vishny (1997) have developed

5330-422: The same time, in business between private entities, it is often attractive for entities to contract with entities which themselves have high BBBEE ratings, because this may boost their own BBBEE score (in the preferential procurement category of the scorecard). Entities which have won state contracts (or mining licenses) are also often required to meet certain BBBEE obligations in selecting their private suppliers, as

5412-467: The same. This was complemented by a 1997 Green Paper on Public Procurement Reform, which called for affirmative action measures in government procurement processes. The central socioeconomic policy framework of Nelson Mandela 's government was the Reconstruction and Development Programme (RDP), which did not specifically refer to "black economic empowerment". However, the term was used in

5494-419: The second quarter of 2021, the unemployment rate for white South Africans, at 8.6%, remained significantly lower than that for blacks (38.2%), coloureds (28.5%), and Indians and Asians (19.5%). The government defines "BEE fronting" as occurring whenever entities deliberately misrepresent facts about their BEE compliance. However, the phrase is most commonly used in reference to so-called "window-dressing,"

5576-533: The secretariat to the PCG and managed the implementation of the programme, which was completed in 2015. As of 2024, Philippines Amusement and Gaming Corporation (PAGCOR) is the most profitable state-owned enterprise in the Philippines. It is the third largest contributor to government revenues, following taxes and customs. Broad-Based Black Economic Empowerment Black Economic Empowerment ( BEE )

5658-469: The service. Conversely, they might be detrimental because they reduce oversight and increase transaction costs (such as monitoring costs, i.e., it is more difficult and costly to govern and regulate an autonomous SOE than it is the public bureaucracy). Evidence suggests that existing SOEs are typically more efficient than government bureaucracy, but that this benefit diminishes as services get more technical and have less overt public objectives. Compared to

5740-416: The seven elements or pillars of BBBEE, which correspond to the seven categories on the scorecard. Each entity is measured against the scorecard to determine its BBBEE score (out of 105), which in turn is used to determine its BBBEE level. The level is published in a BBBEE certificate issued to the entity and valid for one year. BBBEE certificates are essential to securing certain incentives or contracts with

5822-465: The state answers for the liabilities. Stocks of the corporation are not sold and loans have to be government-approved, as they are government liabilities. State-owned enterprises are a major component of the economy of Belarus . The Belarusian state-owned economy includes enterprises that are fully state-owned, as well as others which are joint-stock companies with partial ownership by the state. Employment in state-owned or state-controlled enterprises

5904-522: The state or with other private entities. Bids by private entities for government procurement contracts are typically evaluated in terms of a 90/10 or 80/20 point system: the competitiveness of the price of the bid is evaluated 90 or 80 points, while the remaining 10 or 20 points are awarded for the bidder's BBBEE rating. A BBBEE rating can therefore determine the outcome of closely contested bids. Some state entities also set out minimum BBBEE criteria which entities must meet in order to qualify to submit bids. At

5986-497: The state's response to natural disasters, financial crises and social instability. China's SOEs are at the forefront of global seaport-building, and most new ports constructed by them are done within the auspices of the Belt and Road Initiative . As of at least 2024, an Ethiopian SOE is Africa's largest and most profitable airline, as well as Ethiopia's largest earner of foreign exchange. In India , government enterprises exist in

6068-542: The term "corporations" is frequently used instead. Thus, SOEs are known under many other terms: state-owned company, state-owned entity, state enterprise, publicly owned corporation, government business enterprise, government-owned company, government controlled company, government controlled enterprise, government-owned corporation, government-sponsored enterprise , commercial government agency, state-privatised industry public sector undertaking, or parastatal, among others. In some Commonwealth realms , ownership by The Crown

6150-480: The total of 1,064 locomotives, 70 would be imported complete and the rest would be built locally by Transnet Engineering in Pretoria and Durban. The alternators of the first two diesel locomotives delivered to Transnet by China's state-owned CRRC Corporation, posed serious problems soon after they arrived in South Africa the previous year, rendering the locomotives unable to operate. Transnet is now refusing to accept

6232-697: Was born the South African Railways and Harbours (SAR&H). On 31 May 1961 the Union became the Republic of South Africa. By 1981 government decided that the SAR&;H should restructure itself along business lines in order to evolve from a state-owned corporation towards privatization. Later, when commercial aviation started, the South African Airways also became a part of this huge land, sea and air transport system. Integral to

6314-474: Was divided into operations and landlord businesses namely, SAPO (Transnet port terminals) and National Port Authority (TNPA). Since its setting up, Transnet port terminals has played a part in supporting the South African government's export-led growth strategy. Most Southern African import and export commodities are handled through South Africa's six largest ports: Richards Bay , Durban , Saldanha , Cape Town , Port Elizabeth and East London . In October 2009

6396-412: Was influential in bolstering support for the broader approach ultimately taken by the government to BEE. This is what sociologist Roger Southall called the "maximalist" (now the "broad-based") approach to BEE, envisaging a more dramatic transformation of the South African economy, with redistributive objectives going beyond black ownership. According to Southall, a major force behind this shift in strategy

6478-693: Was less clearcut than that experienced by other non-white groups. For example, although Chinese people were treated as coloured under some legislation, from 1984 they were exempt from the discriminatory provisions of the Group Areas Act . In 2008, arbitrating a legal challenge by the Chinese Association of South Africa, the Pretoria High Court ruled that the South African Chinese community were "black" for

6560-420: Was one of the most significant challenges facing BEE. Critics have questioned the appropriateness and fairness of the policy's use of racial classifications , themselves inherited from the apartheid era. This broad family of criticisms encompasses a range of views, including that using race markers further entrenches their power; that race is a suboptimal proxy for economic disadvantage; and that BEE constitutes

6642-625: Was relaunched as the more comprehensive, and less ownership-focused, Broad-Based Black Economic Empowerment ( BBBEE ) programme around the time of the passage of the BBBEE legislation in 2003. However, although earlier initiatives were governed by different legislation and sets of arrangements, the underlying principles and policy are very similar, and BBBEE is often still referred to as "BEE" in common parlance. In June 2021, President Cyril Ramaphosa announced that South Africa's BEE strategy and legislation would be reviewed, especially to ensure that they are not exploited for corrupt purposes. When

6724-534: Was the growing popular perception that BEE had thus far worked to benefit only a tiny black elite, a criticism prominently voiced by the influential Congress of South African Trade Unions . The stage for the expanded BBBEE strategy was set by the Preferential Procurement Act of 2000, which sanctioned preferential treatment for historically disadvantaged groups in the distribution of state procurement contracts. The regulations accompanying

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