South Africa: Upstream linkages—Fighting inequality by promoting local procurement

This case study examines South Africa's use of demand-side and supply-side policy options to promote local procurement in the mining sector, specifically focusing on reducing inequality through the empowerment of historically disadvantaged South Africans.

• South Africa defines "local" procurement based on ownership by historically disadvantaged South Africans (HDSAs), as determined by the Broad Based Black Economic Empowerment (B-BBEE) Act and its associated scorecard, rather than using geographic or value-addition criteria.
• The Mining Charter utilizes a scorecard system to incentivize procurement from B-BBEE businesses. Mining companies' own scores are negatively impacted if they procure from low-score suppliers, and non-compliance can lead to fines or the revocation of mining and exploration licences by the Department of Mineral Resources.
• The Mining Charter established specific B-BBEE procurement targets for 2014, with higher proposed targets for 2019. For 2014, the required percentages were 40% for capital goods, 50% for consumable goods, and 70% for services. The proposed 2019 targets for locally based B-BBEEs are 60%, 70%, and 80% respectively.
• Mining companies must publish a Social and Labour Plan (SLP) for each mine site to obtain a mining licence. These plans, approved by the Minister of Mineral Resources, require details on mine community economic development, including social and economic baselines, infrastructure projects, and measures for housing and living conditions.
• The Small Enterprise Development Agency (Seda), established in 2004 under the Department of Small Business Development, provides non-financial support to small and medium-sized enterprises. Its services include mentorship, coaching, business advisory services, and tools like the FinFind online tool to help enterprises prepare for financing.

APA

Nickerson, E., & Geipel, J. (2018). South Africa: Upstream linkages—Fighting inequality by promoting local procurement. International Institute for Sustainable Development. https://www.iisd.org/sites/default/files/publications/case-study-south-africa-upstream-linkages.pdf

Chicago

Nickerson, Emily, and Jeff Geipel. South Africa: Upstream linkages—Fighting inequality by promoting local procurement. International Institute for Sustainable Development, 2018. https://www.iisd.org/sites/default/files/publications/case-study-south-africa-upstream-linkages.pdf.

Wikipedia

{{cite report |last1=Nickerson |first1=Emily |last2=Geipel |first2=Jeff |title=South Africa: Upstream linkages—Fighting inequality by promoting local procurement |publisher=International Institute for Sustainable Development |date=2018 |url=https://www.iisd.org/sites/default/files/publications/case-study-south-africa-upstream-linkages.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{nickerson2018south, author = {Nickerson, Emily and Geipel, Jeff}, title = {{South Africa: Upstream linkages—Fighting inequality by promoting local procurement}}, institution = {International Institute for Sustainable Development}, year = {2018}, url = {https://www.iisd.org/sites/default/files/publications/case-study-south-africa-upstream-linkages.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }