Outsourcing as a black economic empowerment tool

M.Comm.Broad Based Black Economic Empowerment (BBBEE) is almost ten years old. The objective of the BBBEE is to increase the participation of Black people and Black women in the South African economy and also to bridge the income inequality which was brought about systematically before South Africa became a democratic country. The BBBEE Act, through the Codes of Good Practice has identified seven key elements which if addressed will help to achieve the objectives of the Act. These elements are ownership, management control, employment equity, skills development, preferential procurement, enterprise development and socio economic development. Minimum targets have been set which need to be achieved within ten years. The primary objective of the study was to investigate if Sappi one of the two dominant pulp and paper companies in South Africa, could utilize outsourcing as a Black Economic Empowerment Tool. The secondary objectives were twofold: • To identify key barriers to complying with the seven elements of the Codes of Good Practice; and • To establish measures or incentives that will lead to Sappi Forests’ outsourced activities complying with the Codes of Good Practice hence utilizing outsourced activities as a Black Economic Empowerment tool. The research findings indicate that Sappi could utilize outsourcing as a Black Economic Empowerment tool. According to survey results, significant progress has been achieved in implementing BBBEE Act despite the lack of a systematic approach. Progress towards the implementation of the Act as measured against the seven elements contained in the Codes of Good Practice, is commendable. Should the recommendations such as incentives and rewards that are mentioned in the findings be adopted, the implementation of the BBBEE Act which leads to empowerment could be enhanced in forests’ outsourced activities