Weak links in the BEE chain? Procurement, skills and employment equity in the metals and engineering industries

The Department of Trade and Industry's 2003 strategy identifies 'Black Economic Empowerment' (BEE) as being broad-based, inclusive, and part of a sustainable long-term growth and development strategy. In this, it is consistent with the 2001 Black Economic Empowerment Commission report, the ANC 2002 conference resolution and ultimately the ANC's Reconstruction and Development Programme of 1994. We use firm-level information in the metals and engineering industries to examine the actual nature and extent of BEE across the dimensions of ownership, procurement, employment equity and training. Its aim is to examine the relationships between BEE concepts and provisions and the responses that firms took in practice. Direct pressure for BEE in metals and engineering firms arises from legislation and regulatory provisions governing employment equity, skills development and procurement. It also follows from procurement provisions applying to large companies that buy from metals and engineering firms, as well as to mining firms and State-Owned Enterprises such as Eskom and Transnet.