Black Economic Empowerment

BEE codes of Good Practice

Ownership: Measures effective ownership of enterprises by black people.
Management Control: Measures effective control of enterprises by black people.
Employment Equity: Measures initiatives intended to achieve equity in the workplace.
Skills Development: Measures the extent that employers carry out initiatives designed to develop the competencies of black employees.
Preferential Procurement: Measures the extent that enterprises buy goods and services from BEE compliant suppliers as well as black owned entities.
Enterprise Development: Measures the extent to which enterprises carry out initiatives contributing to enterprise development.
Socio-Economic Development: Measures the extent to which enterprises carry initiatives contributing to socio-economic development.
Qualifying Small Enterprises: Measures the extent to which enterprises carry out contributions made by qualifying small enterprises.

For more information on BEE codes open the documents below.

Government Gazette No 29617 (1) - 9 February 2007 (1296 KB)

Government Gazette No 29617 (2) - 9 February 2007 (990 KB)

Government Gazette No 29617 (3) - 9 February 2007 (1299 KB)

What is BEE?

Black Economic Empowerment (BEE) is the process by which previously disadvantaged South Africans are being empowered through the transfer of ownership, management and financial control of companies; the multi-level transference of skills and the widespread creation of jobs. Its purpose is to bring the majority of South Africans into the mainstream economy and it is the key to the future prosperity of the country.

IDC and the BEE

Balanced, sustainable economic growth can only be achieved through the participation of all its citizens. We fully support the Government’s BEE policies and increased focus on broad-based, value creating empowerment and have incorporated them into all our activities. Emerging entrepreneurs have a key role to play in the development of the economy. We have adjusted the way we work in order to give these new business people the extra support they need to establish businesses that are sustainable in the long term.

As a South African organisation we:

Support Government projects at local, provincial and national levels
Proactively encourage our clients to comply with our BEE policies
Seek communication with identified BEE stakeholders
Maintain links with BEE activities
Encourage the private sector to co-finance BEE transactions

As a development finance institution we view BEE in the broadest possible context. When considering funding applications, we assess each project’s ability to meet some or all of the following requirements:

Job creation
Rural development
Urban renewal
Poverty alleviation
The empowerment of women
Skills development
Education
Access to finance for the purpose of creating wealth

Through our recent financing activities 23 211 new job opportunities have been created, SA export earnings have increased by R5, 7 million, and we are currently preparing to launch a R10 billion fund to finance BEE business opportunities.

Our approach

We give priority to projects which promise broad-based outcomes and/or which benefit the community as a whole.

To date our empowerment funding has included projects within the following sectors:

Manufacturing
Agriculture
Agro processing
Chemicals and related products
Wood, paper and printing
Transport, storage and communications

Achievements

IDC won the following awards at the 2007 BusinessMap Business Report BEE Awards:

The IDC was once again acknowledged as the best DFI in the Empowerment arena.
Three IDC clients were finalists for the category Top Black Business, Ntuso Holdings and Sobengwe achieved joint second place and Razco Plastics was the winner in this category. Congratulations to Wood and Paper and Chemtex SBUs.
In the category of Top BEE Deal the Ayavuna and Imbewu deals with Tongaat-Hulett and Hulamin was a finalist. The IDC has significant shareholding in Hulamin.
The IDC won the award for Development Financier of the year for the 4th year running. This year the award was not based on number of value of deals but rather based on evaluating selected projects on the seven criteria of the balanced scorecard of the BEE Codes of Good Practice, which is in line with IDC strategic direction.

Economic transformation

Small and Medium Enterprises are a crucial element in a developing economy
Most emerging entrepreneurs are involved with SMEs
SMEs constitute the majority of our clients
In 2004, 73% of all the funding applications we approved, were for SMEs
The SMEs we financed created 6,65 jobs per R1 million investment
Non-SMEs we financed, created 2,74 jobs per R1 million investment

Community Foundations and Workers’ Trusts

Community foundations incorporate:

Community Foundations are supported by the IDC Foundation Fund (R50 million/established 2003).
The Black Association of the Wine and Spirits Industry (BAWSI) Trust was launched in Stellenbosch, Western Cape in February 2005.
Five other Community Foundations which are in the process of being established; three in the Western Cape, two in KwaZulu-Natal and one in Mpumalanga

The purposes of workers’ trust is to:

Ensure that historically disadvantaged, low income South African workers have a meaningful stake in the economy.
Workers’ Trusts are funded by the IDC Development Fund (R100 million/established for broad-based empowerment projects).
There are currently 15 workers’ trusts established.

The IDC Foundation Fund and IDC Development Fund

These funds:

Participate in our normal investment activities but with lower return requirements
Enable community foundations and workers to become shareholders in IDC projects.

Who to contact

For more information on the Black Economic Empowerment, please call us on 086 069 3888. Alternatively, email our call centre at callcentre@idc.co.za.