On 6 January 2004 Government passed into law the Broad-Based Black Economic Empowerment Act, No. 53, 2003. The final BBBEE Codes of Good Practice are now operational as of the date of publication in the Government Gazette, No. 29617, on 9 February 2007.
Although there are no direct financial penalties that could be applied to non BEE compliant businesses, the system ensures that Procurement managers and Buyers will favour businesses that are compliant since that enhances their own BEE Scorecard under the Preferential Procurement element provisions.