- Significant Matters
The South African Government’s transformation (local content) strategy is structured around broad-based black economic empowerment (B-BBEE). B-BBEE is an important consideration for any company conducting business in South Africa, whether with Government, organs of state or private sector customers.
We have extensive experience in advising and acting for a wide range of clients across a number of sectors and have been involved in several ground-breaking B-BBEE transactions. Our specialist lawyers are up to date with the most recent developments in B-BBEE including the amendments to and interpretations and nuances arising in the context of the Codes of Good Practice and the various sector-specific codes. We regularly engage – both independently and behalf of our clients – with the B-BBEE Commission, the Department of Trade and Industry, and various B-BBEE verification agencies.
Our extensive knowledge, experience and wide range of key contacts places us in a unique and distinctive position to provide comprehensive advice and strategies for the development and implementation of lasting and sustainable transformation.
- Formulating tailor-made B-BBEE strategiesfor businesses, with a detailed understanding of each business as well as its position in the market, applicable sector regulation, its competitors, and its current and aspirational customer base.
- Advising on and project managing all aspects of B-BBEE transactions, including providing advice on B-BBEE structuring and assisting with all M&A aspects, funding arrangements, tax arrangements, and engagements with the B-BBEE Commission and B-BBEE verification agencies (if required) in relation to the transaction.
- Advising on the viability of various B-BBEE ownership structuresfor a particular business, including the treatment of broad-based ownership schemes, employee share ownership plans, private equity funds, equity equivalent investment programmes and sales of assets under the general Codes and relevant sector codes, as well as applicable tax implications.
- Advising on the measurement and interpretation of the other elements contained under the Codes of Good Practice (further to the ownership element), including management control, skills development, enterprise and supplier development, socio-economic development, as well as various unique elements set out under relevant sector codes. We also advise on the implications for procurement decisions under both the B-BBEE legislation and the Preferential Procurement Policy Framework Act 5 of 2000.
- Engaging with the B-BBEE Commissionon behalf of our clients (and, where required, independently) to obtain non-binding opinions on certain B-BBEE structures and/or to register major B-BBEE transactions. We also engage with the B-BBEE Commission in relation to certain findings and queries raised by the B-BBEE Commission in the context of various ownership structures and/or transaction documents, or in relation to other complaints and/or investigations conducted by the B-BBEE Commission.
- Conducting B-BBEE due diligence investigations, usually as part of a broader M&A transaction.
- Conducting B-BBEE investigationsrelating to fronting and other abuses of the B-BBEE regulatory framework.
- BBBEE Guide 1: An overview of B-BBEE in South Africa
- BBBEE Guide 2: Practical steps
- BBBEE Guide 3: Ownership
- BBBEE Guide 4: Monitoring by the BEE Commission
- Africa Guide – Local Ownership and Empowerment
Local Content Regulation
A growing trend across Africa is greater intervention by national authorities, particularly in the development and introduction of local content regulation, either holistically or in certain sectors – such as, for example, in the mining and the oil and gas sectors.
Often local content regulation focuses on ensuring local ownership and the local operation of assets in the sector, increased local employment in the sector, local transfer of skills and technology, and increased procurement of goods and services from local businesses. Minimum local ownership thresholds may be set – either as a required or an aspirational target – and foreign investments may be restricted. As a result, local content issues increasingly are a threshold issue and key consideration for African M&A transactions.
Our experienced lawyers are well-placed in key African jurisdictions to provide strategic advice to major local and international commercial and industrial corporations, mining houses, banks and private equity funds in many areas of economic activity across the African continent.
Our specialist team is up to date with the most recent developments in local content regulation, understanding both the legal framework and the political and policy contexts, and regularly engaging with key regulators on local content matters.
Our extensive knowledge, experience and wide range of key contacts places us in a unique position to provide effective and holistic advice and strategies for the development and implementation of lasting and sustainable local content compliance. We pride ourselves on giving our clients the best options to deliver on their goals and to safeguard them from possible risks.