A critical analysis of broad-based black economic empowerment in the mining sector
Author(s)De Klerk, Stanley Sydney
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Broad Based Black Economic Empowerment (B-BBEE) is arguably the most talked about issue in the South African business environment today. This study critically examines this contentious multifaceted phenomenon with particular reference to how it manifests in the mining sector and what its impact on the mining industry has been. The study is located within a qualitative (phenomenological) paradigm that makes use of a case study approach to explore descriptive, illustrative and explanatory dimensions of the B-BBEE phenomenon. The study employs a research methodology that utilizes sampling, data collection and data analysis methods that are aligned to both the research objectives and theoretical underpinnings of the research paradigm. Primary data was collected from a small but highly selective sample of prominent individuals representing organisations that have a national footprint in the mining sector. The data was collected by utilizing semi-structured interviews. These interviews were based on an interview guide consisting of predominantly open-ended questions. Secondary data was collected through a literature review that tapped into the most current information on B-BBEE. Data was analysed by using an innovative yet pragmatic combination of the cognitive mapping and general inductive method processes linked to the presentation of information on specially adapted insight slides. A number of important findings emerged from the study. The study found that B-BBEE implementation was still not progressing as well as initially anticipated. Reasons for the slow pace of implementation included nefarious practices such as fronting, nepotism and corruption as well as the wide scale utilization of inappropriate funding structures such as Special Purpose Vehicles (SPV’s) to fund B-BBEE transactions. The study also highlighted the hegemonic perception in the mining sector that the legislative and policy framework, within which the B-BBEE is located, is adequate and that greater emphasis must rather be placed on the actual implementation of the B-BBEE process.