BEE was designed to level South Africa’s economic playing field, enabling black-owned businesses to participate meaningfully in sectors historically dominated by established players. Yet despite decades of implementation, structural weaknesses in oversight and enforcement continue to leave black enterprises vulnerable to exploitation, marginalisation and financial harm.
Recent cases — from All Blue Technologies (ABT) to Thebe Holdings, Rainbow Construction and Balimi-Hlabula — highlight a disturbing pattern. These are not isolated incidents; they demonstrate recurring governance failures that undermine the very purpose of BEE.
ABT, a 100% black-owned rail engineering company with three decades of experience in overhead traction equipment construction and maintenance, partnered with Grindrod Rail Construction and Ikusasa Rail (a WBHO subsidiary) to execute a R103m Transnet contract.
Despite delivering successfully, ABT alleges systematic undermining by its partners: financial records were obstructed, costs were inflated and over R37m was unlawfully withheld, they say. Governance decisions were often taken without ABT’s consent, the company asserts, leaving it exposed and marginalised.
High-profile cases such as Thebe Holdings’ dispute with Shell further illustrate the magnitude of the problem. Thebe’s 28% stake in Shell’s South African downstream operations became the subject of arbitration, with multibillion-rand stakes at play.
While the matter was ultimately settled, it underscored how even large, well-capitalised BEE partnerships can be contested, with black partners at risk of undervaluation or unfair treatment.
Similarly, Rainbow Construction’s joint venture with WBHO and the Balimi-Hlabula partnership reveals recurring issues of marginalisation, opaque financial practices and limited recourse for black stakeholders.
When enforcement is weak, BEE risks becoming a symbolic exercise rather than a tool for genuine economic transformation.
The impact of such failures extends far beyond corporate disputes. Black-owned businesses are financially strained, skilled employees lose jobs and the communities they serve are disadvantaged. When enforcement is weak, BEE risks becoming a symbolic exercise rather than a tool for genuine economic transformation.
Addressing these challenges requires a shift in focus — from establishing structures that already exist to ensuring accountability, prioritisation, and enforcement. This is where a dedicated BEE ombudsman, working closely with the transformation and competition unit of the department of trade, industry & competition (DTIC), could make a transformative difference.
A BEE ombudsman, empowered to investigate complaints, mediate disputes and enforce compliance, would provide black-owned businesses with a credible and accessible avenue to resolve grievances. Coupled with the DTIC’s transformation and competition unit, this office could ensure that systemic abuses are addressed promptly, transparently and effectively, preventing prolonged disputes that threaten the viability of black partners.
Prioritising such mechanisms sends a clear message: exploitation and marginalisation in BEE partnerships will no longer be tolerated. Black-owned businesses — historically facing disproportionate barriers to entry — must be protected so they can contribute meaningfully to the economy without fear of manipulation or obstruction.
The experiences of ABT, Thebe, Rainbow Construction, Balimi-Hlabula, among others, serve as a wake-up call. This is not about individual grievances — it is a clarion call for systemic reform. Accountability, enforcement and timely resolution of disputes must become central to BEE implementation. Only then can BEE fulfil its transformative promise.
South Africa cannot afford transformation initiatives remaining symbolic or merely performative. High-profile disputes, involving billions of rands, highlight the urgent need for robust mechanisms that protect black partners, ensure fairness and maintain public confidence in the BEE framework. Establishing a strong ombudsman function, with oversight and enforcement support from the DTIC’s transformation and competition unit, is a crucial step in that direction.
BEE is intended to empower, not expose, black-owned businesses. It is time to ensure that accountability, transparency and enforcement are no longer optional but central to the policy’s implementation. The future of economic transformation — and the sustainability of black-owned enterprises —depends on it.
• Pila is CEO and chair of All Blue Technologies (ABT)
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