british american tobacco p.l.c. sustainability report 2009 - Broad-Based Black Economic Empowerment in South Africa


In 2003, the South African Government released a strategy for Broad-Based Black Economic Empowerment (B-BBEE) defined as “an integrated and coherent socio-economic process that directly contributes to the economic transformation of South Africa and brings about significant increases in the number of black people that manage, own and control the country’s economy, as well as significant decreases in income inequalities.”

The B-BBEE Codes of Good Practice are binding for all public departments, but they are not binding for companies. However, British American Tobacco South Africa aims to comply with the Codes as part of its commitment to the transformation of the South African economy.

In 2008, British American Tobacco South Africa set a target for 2009 to achieve Level 8 B-BBEE status during its first audit by a B-BBEE verification agency and to reach the higher Level 4 by 2014.

The company addressed system and process shortcomings and as part of its work, partnered with Accelerate Cape Town, a business forum, to host dialogue sessions to discuss the apparent challenge that Cape Town has in attracting and retaining professional black talent, which is defined in the legislation to include people of “African, Indian and Coloured domain”.

The transformation agenda that B-BBEE tries to address is a sensitive topic and British American Tobacco South Africa acknowledges that it is very important to engage its employees. A key area of focus has been helping employees to understand their role and responsibilities in the B-BBEE strategy in order to support it and help ensure its sustainability. A further challenge has been engaging with key stakeholders outside South Africa, as global procurement strategies will not necessary take B-BBEE requirements into consideration.

However, the company exceeded its Level 8 target and managed to reach Level 7 in 2009. The audit also confirmed that British American Tobacco South Africa is classified as a ‘Value-Adding Supplier’, enabling its customers to further increase their scores against the B-BBEE requirements. British American Tobacco South Africa now aims to rise to Level 6 in 2011.