The B-BBEE ICT Sector Council has launched a formal review of the 2016 ICT sector code and published an updated framework governing equity equivalent investment programmes (EEIPs) – the very mechanism at the heart of the political storm over Elon Musk’s Starlink and its attempts to enter the South African market.
In a statement on Wednesday, the council, established under section 9 of the Broad-Based Black Economic Empowerment Act as the statutory body responsible for overseeing the implementation of B-BBEE in the ICT sector, invited the public to submit written comments on the existing code by 20 May 2026. The review notice, signed by deputy chair Katharina Pillay, formally opened the first round of public consultation on 1 April. A second phase of hybrid stakeholder engagement will follow, with dates still to be confirmed.
The more immediately consequential development, however, is the council’s updated EEIP framework, which sets out clearer guidance on application requirements, defined processes and timelines, provisions for confidential information, and new provisions for ongoing compliance monitoring.
EEIPs allow multinationals that refuse to dilute local ownership to meet empowerment obligations through investment in skills, enterprise development or infrastructure instead. They have been a feature of other sectors of the economy for years, but their application in ICT has been contested, most notably through communications regulator Icasa’s licensing rules.
The framework spells out the two measurement options available to multinationals seeking ownership recognition under statement 103 of the ICT sector code: contributions equivalent to 30% of the value of the applicant’s South African operations (using a standard valuation method), or 4% of annual turnover over the agreed measurement period. The framework notes that ICT targets are “traditionally more stringent than the generic codes to reflect the sector’s strategic importance” – a point that may prove contentious as the code review gets under way.
EEIP framework
Applicants will also be required to produce an affidavit from the global head of the entity – and, in some instances, independent auditor verification – confirming the multinational’s worldwide policy of not diluting local equity. In Starlink’s case, that would mean a sworn declaration from parent SpaceX, whose CEO is Musk.
A striking feature of the new framework, however, is the weight it places on administrative law compliance. It devotes substantial sections to the Promotion of Administrative Justice Act (Paja), setting out detailed procedural fairness requirements, conflict-of-interest and recusal rules, the applicant’s right to written reasons for any adverse decision, and the grounds on which an EEIP decision could be taken on judicial review.
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The document states explicitly that “the legal defensibility of the EEIP framework depends on the council’s ability to demonstrate that every application was subjected to an evaluative process that was thorough, impartial and based on the facts presented”.
That emphasis is unlikely to be accidental. Malatsi’s policy directive has already drawn threats of court action from the MK Party, and the council appears to be building its procedural armour in advance – ensuring that any future recommendation it makes on a Starlink (or other multinational) EEIP application can withstand legal challenge.
The framework also sets clear limits on the council’s own discretion. It describes the council’s role as “advisory and facilitative in nature, unless otherwise expressly authorised by law”, and states that the council “must not impose mandatory conditions that are not supported by the act, the code, or a lawful delegation or directive”. In other words, the council is signalling that it will not freelance on transformation terms beyond what the law permits – a likely comfort to multinational applicants wary of moving goalposts.
The framework’s emphasis on monitoring and transparency addresses a longstanding industry complaint.
Speaking to TechCentral in December, Association of Comms & Technology CEO Nomvuyiso Batyi warned that EEIPs in other sectors have lacked transparency, with multinationals touting big investment numbers without clarity on how the funds are spent or whether the programmes actually deliver. Batyi said she had “never seen” an annual report from the ICT Sector Council setting out who was doing what under EEIPs, despite the council’s mandate to produce one.
The updated framework, which promises to build a “robust evidence base to support meaningful and sustainable transformation”, appears to be a direct response to those criticisms.
It also lands at a politically charged moment. In December, communications minister Solly Malatsi issued a final policy directive asking Icasa to align its ownership regulations with the ICT sector code and to recognise EEIPs as an alternative to the regulator’s strict 30% black equity requirement. The move was seen as clearing a potential path for Starlink, which has repeatedly said it will not sell equity in any of its local subsidiaries, though Malatsi has repeatedly said the decision is not aimed specifically at Starlink but at encouraging greater foreign investment.
The directive triggered fierce political backlash from the ANC, MK Party and EFF, with the latter two accusing Malatsi of using policy to hand Starlink a “soft landing” and threatening to take the fight to the courts.
Draft
President Cyril Ramaphosa has backed the minister, a senior member of the DA, with his spokesman, Vincent Magwenya, noting that “four or five” satellite operators beyond Starlink have expressed interest in the South African market.
Following the 20 May deadline and the hybrid stakeholder engagement, the ICT Sector Council will develop a draft amended code, which will then be published for a further round of public comment before being finalised.
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The council’s tightened EEIP framework – and its review of the underlying sector code – could prove consequential in shaping how, and whether, transformation obligations are met by foreign entrants into the market. – (c) 2026 NewsCentral Media
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