Government's controversial move to ease black empowerment laws for Elon Musk's Starlink

In a dramatic policy shift likely to stir controversy at home, the South African government is proposing to relax its flagship black empowerment regulations — but only for foreign satellite giants like Elon Musk’s Starlink. The move, quietly published in a new government gazette, follows diplomatic overtures to Washington and mounting pressure from Musk, who has openly labelled South Africa’s BEE laws “racist and improper.”

Minister of Communications and Digital Technologies, Solly Malatsi, stated the objectives of the policy are “to encourage investment, including strategic infrastructure investment, and innovation in the communications sector,” and to “promote competition within the ICT sector,” while harmonising legislation affecting the industry.

The Minister further emphasised the importance of “regulatory certainty and consistency” to support broadband rollout and bridge the digital divide.

The proposed policy direction clarifies the Department’s position on broad-based black economic empowerment, particularly the recognition of equity equivalent investment programmes.

These programmes “provide an avenue for factoring in alternative ways for multinational companies to make an impact on South Africa’s socio-economic development,” according to the gazette.

The move aims to accommodate multinational operators who have sought clarity on compliance, ensuring “certainty necessary to attract increased investment in ICT and accelerate universal internet access.”

Currently, the Electronic Communications Act requires licences to include a minimum 30% equity ownership by historically disadvantaged groups.

However, the gazette acknowledges that “the Regulations contradict the legal framework for broad-based black economic empowerment by prescribing equity ownership requirements” that may not fully align with the ICT Sector Code, which measures empowerment more broadly.

The policy instructs ICASA to urgently align the regulations with the Amended B-BBEE ICT Sector Code to “promote broad-based black economic empowerment, including through equity equivalent investment programmes.”

This development coincides with reports that South African authorities are offering Elon Musk and his companies tailored solutions to circumvent existing BEE rules.

Musk, who has described South Africa’s BEE regulations as “racist and improper,” was reportedly present at a recent meeting between President Cyril Ramaphosa and US President Donald Trump, aimed at resetting South Africa-US relations.

Cape Argus