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Broad-Based Black Economic Empowerment Act, 2003 (Act No. 53 of 2003)

Sector Codes

Defence Sector Code

1. Preamble


Colonialist and apartheid policies and practices in South Africa excluded Black People from the economy and deprived them of equal educational opportunities and equal access to the economy of the country. This resulted in a myriad of socio-economic problems which have resulted in high levels of poverty and inequality, significant shortage of skills, the reliance of the economy on a small number of people and the continued exclusion of Black People from the South African economy, resulting in an economy that performs below its potential.


To help deal with the inherited problems, South Africa adopted a Constitution which aimed to establish a society based on democratic values, social justice and fundamental human rights, improve the quality of life of all citizens and free the potential of each person, build a united and democratic South Africa able to take its rightful place as a sovereign state in the family of nations; and to promote the achievement of equality through legislative and other measures designed to protect or advance persons, or categories of persons, disadvantaged by unfair discrimination.


Section 9 of the Bill of Rights as set out in Chapter 2 of the Constitution states:

“Equality includes the full and equal enjoyment of all rights and freedoms.”

This right to equality includes the right of all South Africans to participate fully in the economy of the country. The Broad – Based Black Economic Empowerment Act no 53 of 2003 and the amended Codes of Good Practice seek to give effect to this right. The South African Defence Industry, like other industries in South Africa, is negatively affected by problems of the past and needs a framework which finds solutions that will address the negative impact of past racially skewed rule and development and which will grow the Defence Industry in order for it to make a sustainable and meaningful contribution to the economy. A strong economy in which all citizens have an equal opportunity to participate, will contribute towards the strengthening of South Africa as a democratic developmental state. In this regard, the need for effective and significant economic transformation is essential. Such transformation must include access to economic opportunities and productive resources for previously excluded groups, the promotion of local businesses and entrepreneurship, manufacturing, the development of skills for a knowledge-based economy and the development of innovative indigenous technology and Intellectual Property.


The Defence Sector Code aims, within the South African Defence Industry, to give effect to the constitutionally enshrined right to equality by addressing the effects of systemic past exclusion of Black people from participating in the economy, which remain firmly in place.