Implementation of Broad-Based Black Economic Empowerment in construction: A South African metropolitan area study

Abstract

The institution of Broad-Based Black Economic Empowerment (BBBEE) has had an impact on the economy in South Africa. Due to its extensive reliance on government procurement, BBBEE has had a substantial influence on the construction industry in terms of transformation imperatives. Although much has been achieved in the transformation of the sector, its empowerment initiatives are generally deemed to be less effective. This argument can be attributed to the impediments encountered by industry stakeholders, when implementing BBBEE. The central subject examined in this study pertains to the BBBEE implementation challenges in South African construction. In order to get to the depth of the identified issues in the reviewed literature, the qualitative method was employed for primary data collection. Eleven interviews were conducted with management representatives of major construction firms in the Nelson Mandela Bay Metropolis, through the use of a brief questionnaire and an interview protocol. The empirical findings that emanated from the study show that most of the respondents were aware of the challenges associated with BBBEE implementation in the construction sector. However, very few are presently addressing the difficulties. This lack of action frequently promotes the exploitation of BBBEE by concerned parties. This exploitation leads to unethical procurement practices in the form of ‘fronting’. Based on the literature reviewed and the data that were collected, it appears that deterrents must be addressed before the implementation of the BBBEE initiative can begin to yield the desired benefits for all concerned parties in South African construction.